20060515Amendments Part I.pdf

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Pacific Power I Utah Power
Rocky Mountain Power
825 NE Multnomah, Suite 2000
Portland, Oregon 97232
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May 11 2006
VIA OVERNIGHT MAIL
Idaho Public Utility Commission
Statehouse
472 West Washington Street
Boise, Idaho 83720
Attn: Ms. Jean Jewell
Commission Secretary
PK-U -91-
Re:Case No. PAC-94-
Order No. 25443
Report of Amendments to Credit Enhancement Arrangement
Amended and Restated Standby Bond Purchase Agreement, dated as of
May 3, 2006, by and among PacifiCorp, the Banks party thereto and The
Bank of Nova Scotia, New York Agency, as Agent (the "Amended and
Restated Standby Bond Purchase Agreement"), relating to the reoffering
of certain Pollution Control Revenue Refunding Bonds (the "Bonds
Dear Commissioners:
Pursuant to the referenced Order, PacifiCorp submits to the Commission one set of verified
copies of each of the following documents relating to the referenced credit support
arrangements in support of the Bonds:
Reoffering Circular dated April 25 , 2006
Amended and Restated Standby Bond Purchase Agreement
Because PacifiCorp has not issued any new security in connection with the referenced
reoffering, no Report of Securities Issued is enclosed.
PacifiCorp entered into the Amended and Restated Standby Bond Purchase Agreement in
order to extend the maturity date of the facility and to conform certain covenants in it to those
contained in PacifiCorp s other financing agreements.
Portlnd2-4566292.50017507-00041
Under penalty of perjury, I declare that I know the contents of the enclosed documents, and
they are true, correct, and complete.
Please contact me if you have any questions about this letter or the enclosed documents.
Sincerely,
Bruce N. Williams
Treasurer
Enclosures
Portlnd2-4566292,50017507-00041
REOFFERING CIRCULAR DATED APRIL 25 2006
lI,iIOT A NEW ISSUE
The opinion of Chapman and Cutler, Bond Counsel, delivered on November 17, 1994 stated that, subject to compliance by the
Company and the Issuer with certain covenants, under then existing law (a) interest on the Bonds will not be includible in gross income
of the owners thereof for federal income tax purposes, except for interest on any Bond for any period during which such Bond is owned
by a person who is a substantial user of the Facilities or any person considered to be related to such person (within the meaning of
Section 1O3(b)(l3) of the Internal Revenue Code of 1954, as amended), and (b) interest on the Bonds will not be treated as an item of
tax preference in computing the alternative minimum tax for individuals and corporations. Such interest will be taken into account,
however, in computing the corporate alternative minimum tax. Such opinion of Bond Counsel was also to the effect that under then
existing law such interest on the Bonds will be exempt from taxes imposed by the Utah Individual Income Tax Act. Such opinion has
not been updated as of the date hereof. See "TAX EXEMPTION" herein for a more complete discussion.
$121,940,000
EMERY COUNTY, urAD
POLLUTION CONTROL REVENUE REFUNDING BONDS
(pacifiCorp Project)
Series 1994
Date ofInitial Issuance: November 17, 1994 Due: November 1,2024
The $121 940 000 Emery County, Utah Pollution Control Revenue Refunding Bonds (PacifiCorp Project), Series 1994 (the
Bonds are limited obligations of Emery County, Utah (the Issuer and, except to the extent payable from Bond proceeds and
certain other moneys pledged therefor, are payable solely from and secured by a pledge of payments to be made under that certain Loan
Agreement, dated as of November 1, 1994, entered into by the Issuer with, and secured by First Mortgage Bonds issued by,
P ACIFICORP
Simultaneously with the delivery of the Bonds, a municipal bond insurance policy insuring the payment of principal of and
interest on the Bonds when due was issued by,
Ambac
The Bonds were initially offered together with the "Carbon Bonds," the "Converse Bonds " the "Lincoln Bonds," the "Moffat
Bonds" and the "Sweetwater Bonds" (collectively, the Related Bonds
),
each as described in the Official Statement (a copy of which
is attached as APPENDIX C hereto) related to the Bonds. The Related Bonds are not being reofferedin connection with the reoffering of
the Bonds.
Through December 31, 2007 (subject to earlier termination), the Bonds will be supported by an Amended and Restated
Standby Bond Purchase Agreement, dated as of May 3, 2006 (the Replacement Standby Bond Purchase Agreement among
PacifiCorp (the Company
),
The Bank of Nova Scotia, New York Agency, as agent and the banks party thereto, initially consisting
solely of
THE BANK OF NOVA SCOTIA
The Bonds are currently supported by a Standby Bond Purchase Agreement, dated as of November 1, 1994, as heretofore
amended and supplemented (the Existing Standby Bond Purchase Agreement among the Company, The Bank of Nova Scotia, New
York Agency, as agent, and the banks parties thereto, consisting solely of The Bank of Nova Scotia, New York Agency. On April 12
2006, the Company delivered notice to J.P. Morgan Trust Company, N., as successor trustee (the Trustee
),
that on or about May 3,
2006, the Replacement Standby Bond Purchase Agreement will be delivered to the Trustee in substitution for the Existing Standby
Bond Purchase Agreement and the Bonds will not have the benefit of the Existing Standby Bond Purchase Agreement as of that date.
The Bonds will be subject to mandatory purchase on May 2, 2006. Descriptions of the Company and The Bank of Nova Scotia, New
York Agency, are attached as APPENDICES A and B, respectively, to this Reoffering Circular in lieu of the description of the Company
and the Information Regarding Banks in APPENDICES A and C, respectively, to the Official Statement.
Updated information regarding the Bond Insurer is included in this Reoffering Circular under the heading "The Bond Insurer
in lieu of the information under "Bond Insurance - The Bond Insurer" set forth in the attached Official Statement.
Price: 100%
The Bonds are reoffered, subject to prior sale and certain other conditions.
JPMORGAN
2034042.0) .O6.
0869669/RDB/mo
The information contained in this Reoffering Circular (which term, whenever used herein, shall
be deemed to include the cover, the Table of Contents, and the Appendices to this Reoffering Circular)
has been obtained from the Company and other sources deemed reliable. The Issuer has not reviewed nor
approved any information in the Reoffering Circular. No representation is made as to the accuracy or
completeness of such information and nothing contained in this Reoffering Circular is, or will be relied
upon as, a promise or representation by the Issuer or J.P. Morgan Securities Inc., as Remarketing Agent
(the Remarketing Agent
).
The Remarketing Agent has reviewed the information in this Reoffering
Circular in accordance with, and as part of, their responsibility to investors under the federal securities
laws as applied to the facts and circumstances of this transaction, but the Remarketing Agent does not
guarantee the accuracy or completeness of such information. The Trustee assumes no responsibility for
this Reoffering Circular and has not reviewed or undertaken to verify any infonnation contained herein.
The information contained in this Reoffering Circular is subject to change without notice, and the delivery
of this Reoffering Circular shall not, under any circumstances, create any implication that there have not
been changes in the affairs of the Issuer or the Company since the date of this Reoffering Circular.
No broker, dealer, salesperson or any other person has been authorized by the Issuer, the
Company, or the Remarketing Agent to give any infonnation or to make any representation other than as
contained in this Reoffering Circular in connection with the offering described in it and, if given or made,
such other information or representation must not be relied upon as having been authorized by any of the
foregoing. This Reoffering Circular does not constitute an offer or reoffering of any securities other than
those described on the cover pages, or an offer to sell or a solicitation of an offer to buy by any person in
any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale.
TABLE OF CONTENTS
PAGE
GENERAL INFORMATION .............................................................,.......................
:...........................
FIRST SUPPLEMENTAL TRUST INDENTURE.....................................................................................
THE INDENTURE............
............................................................................,... ........ .... .......................
THE REPLACEMENT STANDBY BOND PuRCHASE AGREEMENT .....................................................
THE BOND INSURER.......................................................................................................................
TAX. ExEMPTION ............................................................................,...............................................
CERTAIN LEGAL MATTERS ...........
..................................... .................... ....... ........ .....".. ................
APPENDIX A PacifiCorp
APPENDIX B The Bank of Nova Scotia
APPENDIX C Official Statement, dated November 16, 1994
THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE INDENTURE HAS NOT BEEN QUALIFIED UNDER THE TRUST INDENlURE ACT
OF 1939, AS AMENDED, IN REUANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS.
IN CONNECTION WITH THIS REOFFERING, THE REMARKETING AGENT MAY OVERALLOT
OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. 'SUCH
ST ABIUZlNG, IF COMMENCED, MAYBE DISCONTINUED AT ANYTIME.
-1-
$121,940,000
Emery County, Utah
Pollution Control Revenue Refunding Bonds
(PacifiCorp Project)
Series 1994
GENERAL INFORMATION
This Reoffering Circular, including the Appendices hereto and the documents
incorporated by reference herein, is provided to furnish certain information with respect to the
reoffering of the $121,940,000 aggregate principal amount of Emery County, Utah Pollution
Control Revenue Refunding Bonds (PacifiCorp Project) Series 1994 (the Bonds"
The Bonds were issued under a Trust Indenture, dated as of November 1 , 1994 (the
Indenture
),
between Emery County, Utah (the Issuer
),
and J.P. Morgan Trust Company,
A. (successor by merger to Bank One Trust Company, NA, formerly known as The First
National Bank of Chicago), as trustee (the Trustee
),
as amended and supplemented by that
certain First Supplemental Trust Indenture, dated as May 1, 2006, between the Issuer and the
Trustee (the First Supplemental Trust Indenture and under a resolution of the governing body
of the Issuer. Pursuant to a Loan Agreement, dated as of November 1, 1994 (the Loan
Agreement
),
between PacifiCorp (the Company and the Issuer, the proceeds from the sale
of the Bonds were used, together with certain other moneys of the Company, for the purposes set
forth in the Official Statement dated November 16, 1994 relating to the Bonds (the Official
Statement attached hereto as ApPENDIX C. The Original Indenture, as amended and
supplemented by the First Supplemental Trust Indenture, is sometimes referred to herein as the
Indenture.
The Bonds were initially offered together with the "Carbon Bonds " the "Converse
Bonds," the "Lincoln Bonds," the "Moffat Bonds" and the "Sweetwater Bonds" (collectively, the
Related Bonds described in the Official Statement. The Related Bonds are not being
reoffered in connection with the reoffering of the Bonds.
The Bonds, together with the premium, if any, and interest thereon, are limited
obligations and not general obligations of the Issuer. None of the Indenture, the Bonds or
the Loan Agreement constitutes a debt or gives rise to a general obligation or liability of the
Issuer or constitutes an indebtedness under any constitutional or statutory debt limitation.
The Bonds do not constitute or give rise to a pecuniary liability of the Issuer and will not
constitute any charge against the Issuer s ,general credit or taxing powers; nor will the
Bonds constitute an indebtedness of or a loan of credit of the Issuer. The Bonds are
payable solely from the receipts and revenues to be received from the Company as
payments under the Loan Agreement, or otherwise on the First Mortgage Bonds, and from
any other moneys pledged therefor.
The Bonds are currently supported by a Standby Bond Purchase Agreement, dated as of
November 1 , 1994, as heretofore amended and supplemented (the Existing Standby Bond
Purchase Agreement among the Company, The Bank of Nova Scotia, New York Agency, as
agent (the Agent Bank"
),
and the banks party thereto, consisting solely of The Bank of Nova
Scotia, New York Agency (the Bank"
).
Pursuant to the Indenture, the Existing Standby Bond
Purchase Agreement and the Loan Agreement, the Company, the Agent Bank and the Bank have
agreed to amend and restate the Existing Standby Bond Purchase Agreement (the Existing
Standby Bond Purchase Agreement, as so amended and restated, is referred to herein as the
Replacement Standby Bond Purchase Agreement
),
in order to, among other things, (i) extend
the stated expiration date from December 31 , 2006 to December 31 , 2007, and (ii) modify certain
provisions of the Existing Standby Bond Purchase Agreement. For purposes of the Indenture
and the Loan Agreement, the amendment and restatement of the Existing Standby Bond
Purchase Agreement is treated as a delivery of an Alternate Liquidity Facility. The Replacement
Standby Bond Purchase Agreement will be delivered to the Trustee on or about May 3, 2006,
and as of such date, the Bonds will not have the benefit of the Existing Standby Bond PurchaseAgreement.
If the Bank assigns a portion of its commitment under the Replacement Standby Bond
Purchase Agreement to one or more other banks (together, with the Bank, the Banks
),
the
obligations of the Banks to purchase unremarketed Bonds under the Replacement Standby Bond
Purchase Agreement will be several and not joint. Therefore, if one such Bank fails to fund its
portion of the commitment, the other Banks party to the Replacement Standby Bond Purchase
Agreement will have no obligation with respect to that portion of the commitment. The interest
rate and the number of days of interest coverage provided under the Replacement Standby Bond
Purchase Agreement shall initially be 12% and 62 days, respectively. The Replacement Standby
Bond Purchase Agreement will expire on December 31 , 2007 , unless extended or earlier
terminated in accordance with the terms thereof. The obligations of the Banks to purchase
unremarketed Bonds will automatically terminate in certain events, including events relating to
insolvency of the Insurer, as defined below, failure by the Insurer to make payments as required
by the Insurance Policy, as defined below, termination, cancellation or material modification of
the Insurance Policy in any material respect that is adverse to the Banks, or a judicial
determination that the Insurance Policy is not enforceable against the Insurer. The obligations of
the Banks are also subject to suspension in certain events, without notice, including a ratings
downgrade of the Insurer or if the Insurer claims or asserts, or any governmental authority finds
that the Insurance Policy is invalid or unenforceable, which events, if not cured, will also result
in termination of the obligations of the Banks. See "THE REPLACEMENT STANDBY BOND
PURCHASE AGREEMENT-Events of Default" and "Consequences of Event of Termination
herein.
All references in this Reoffering Circular and the Official Statement (unless
expressly stated otherwise) to the Standby Bond Purchase Agreement shall be deemed to
refer to the Replacement Standby Bond Purchase Agreement and not to the Existing
Standby Bond Purchase Agreement, and all references to the Bank shall be deemed to refer
to The Bank of Nova Scotia, New York Agency.
The Bonds were originally issued bearing interest at a Daily Interest Rate and the Bonds
will continue to bear interest at a Daily Interest Rate upon being reoffered, subject to the right of
the Company to cause the interest rate on Bonds to be converted to other interest rate
determination methods as described in the Official Statement. Upon the initial issuance of the
Bonds, Ambac Assurance Corporation, formerly known as AMBAC Indemnity Corporation, (the
Insurer issued a municipal bond insurance policy with respect to the Bonds (the Insurance
Policy as described in the attached Official Statement. The Insurance Policy remains in effect.
A description of the Insurer is set forth herein under The Bond Insurer.Also, upon the initial
issuance of the Bonds, the Company issued its First Mortgage Bonds (the First Mortgage
Bonds to secure its obligations under the Loan Agreement as described in the attached Official
Statement. The First Mortgage Bonds remain in full force and effect.
Certain provisions relating to the Bonds, the Insurance Policy, the Loan Agreement, the
Indenture and the First Mortgage Bonds are described in the attached Official Statement. With
regard to the description of the First Mortgage Bonds, the Company discharged the Pacific and
Utah Mortgages (as defined in the Official Statement) on August 30, 1996, and all Class A
Bonds (as defined in the Official Statement) issued thereunder have been retired. As a result, the
First Mortgage Bonds are now secured by a first mortgage lien on the properties that were
subject to the Pacific and Utah Mortgages, except for those properties released therefrom since
the issuance of the First Mortgage Bonds.
A brief description of the Bank and certain amendments to the Original Indenture and a
summary of certain provisions of the Replacement Standby Bond Purchase Agreement are
included in this Reoffering Circular, including the Appendices hereto which includes, as
ApPENDIX C, the Official Statement. Information regarding the business, properties and
financial condition of the Company is included in and incorporated by reference in ApPENDIX A
attached hereto. A brief updated description of The Bank of Nova Scotia is included in
ApPENDIX B attached hereto, which ApPENDIX B replaces the applicable description in
APPENDIX C of the Official Statement. The descriptions herein, including in ApPENDIX C, of the
Indenture, the Loan Agreement and the Replacement Standby Bond Purchase Agreement are
qualified in their entirety by reference to such documents. All such descriptions are further
qualified in their entirety by reference to laws and principles of equity relating to or affecting the
enforcement of creditors' rights generally.
FIRST SUPPLEMENTAL TRUST INDENTURE
The First Supplemental Trust Indenture amends and supplements the Original Indenture
in order to (i) amend the definition of Substitute Standby Purchase Agreement to allow for a
Standby Purchase Agreement to be modified and amended with the written consent of the Insurer
(unless an Insurer Default has occurred and is continuing), provided that the ratings on the Bonds
are not reduced, suspended or withdrawn, (ii) allow for the delivery of a Supplemental Indenture
without the consent of the Owners under certain additional circumstances and (iii) require the
consent of each Bank prior to surrendering, canceling or terminating or amending or modifying
the Insurance Policy. The amendments described in clauses (i) and (ii) above have been
incorporated in the sections entitled "THE INDENTURE - Modifications and Amendments" and
THE REPLACEMENT STANDBY BOND PURCHASE AGREEMENT - Substitute Standby Bond
Purchase Agreement," respectively. Written consent to the amendments will be obtained from
the Remarketing Agent and purchasers of the Bonds following the mandatory purchase thereof
on May 2, 2006 will be deemed to have consented to such amendments. Such amendments
apply only to the Bonds and not to the Related Bonds.
THE INDENTURE
The First Supplemental Trust Indenture amends and supplements the provisions of the
Original Indenture relating to the modification of and amendments to the Indenture without the
consent of the Owners of the Bonds. The Section in the Official Statement entitled "THE
INDENTURE - Modifications and Amendments" appearing on pages 33 and 34 of the Official
Statement is hereby replaced as follows:
MODIFICATIONS AND AMENDMENTS
The Indenture may be modified or amended by the Issuer and the Trustee by
supplemental indentures without the consent of the Owners of the Bonds for any of the following
purposes: (a) to cure any formal defect, omission, inconsistency or ambiguity in the Indenture;
(b) to add to the covenants and agreements of the Issuer contained in the Indenture or of the
Company, the Insurer or the Bank (or the Obligor on an Alternate Liquidity Facility, as the case
may be) or the Agent Bank (or the Agent Obligor on an Alternate Liquidity Facility, as the case
may be) contained in any document, other covenants or agreements thereafter to be observed, or
to assign or pledge additional security for the Bonds, or to surrender any right or power reserved
or conferred upon the Issuer or the Company which shall not materially adversely affect the
interests of Owners of tbe Bonds; (c) to confino, as further assurance, any pledge of or lien on
any property subjected or to be subjected to the lien of the Indenture; (d) to comply with the
requirements of the Trust Indenture Act of 1939, as amended; (e) to modify, alter, amend or
supplement the Indenture or any supplemental indenture in any other respect which in the
judgment of the Trustee is not materially adverse to the Owners of the Bonds; provided
however that any such modification, alteration, amendment or supplement shall not take effect
until the Insurer (unless an Insurer Default has occurred and is continuing) and the Agent Bank
or the Agent Obligor on an Alternate Liquidity Facility, as the case may be, shall have consented
in writing to such modification, alteration, amendment or supplement; (f) to implement a
conversion of the interest rate on the Bonds or to evidence or give effect to or facilitate the
delivery and administration under the Indenture of an Alternate Liquidity Facility or a Substitute
Standby Bond Purchase Agreement; (g) to provide for a depository to accept tendered bonds in
lieu of the Trustee; (h) to modify or eliminate the book-entry registration system for the Bonds;
(i) to provide for uncertificated Bonds or for the issuance of coupons and bearer Bonds or Bonds
registered only as to principal, but only to the extent that such would not adversely affect the
Tax-Exempt status of the Bonds; (j) to secure or maintain ratings for the Bonds from Moody
and/or S&P in both the highest short-term or commercial paper debt Rating Category (as defined
in the Indenture) and also in either of the two highest long-term debt Rating Categories; (k) to
provide demand purchase obligations to cause the Bonds to be authorized purchases for
investment companies; (I) to provide for any Substitute Collateral and the release of any First
Mortgage Bonds; (m) to provide for the appointment of a successor trustee, Registrar or Paying
-4-
Agent; (n) to provide the procedures required to permit any Owner to separate the right to
receive interest on the Bonds from the right to receive principal thereof and to sell or dispose of
such right as contemplated by Section 1286 of the Code; (0) to provide for any additional
procedures, covenants or agreements necessary to maintain the Tax-Exempt status of the Bonds;
(p) to modify, alter, amend or supplement the Indenture in any other respect (which in the
judgment of the Trustee is not materially adverse to the Owners), if the effective date of such
supplemental indenture or amendment is a date on which all of the Bonds affected thereby are
subject to mandatory purchase and are so purchased; (q) to provide for the replacement of the
Insurer or for an additional Insurer following the occurrence of an Insurer Default or to provide
for an additional Insurer following the withdrawal or suspension or reduction below AAA (or its
equivalent rating) by S&P and Aaa (or its equivalent rating) by Moody s of the long-term ratings
of the Insurer provided that the insurance policy provided by the replacement or additional
Insurer would result in a long-term rating on the Bonds equal to AAA (or its equivalent rating)
by S&P and Aaa (or its equivalent rating) by Moody s; (r) if the Bonds are then rated by
Moody s or S&P, to make any change which does not result in a reduction of toe rating or
ratings applicable to the Bonds; provided that such change must be approved in writing by the
Insurer (unless an Insurer Default shall have occurred and be continuing); and (s) unless an
Insurer Default shall have occurred and be continuing, to make any change approved in writing
by the Insurer; provided that if the Bonds are then rated by Moody s or S&P, such change shall
not result in a reduction of the rating or ratings applicable to the Bonds.
Before the Issuer and the Trustee shall enter into any supplemental indenture as described
above, there shall have been delivered to the Trustee, the Company, the Insurer and the Agent
Bank (or the Agent Obligor an Alternate Liquidity Facility, as the case may be) an opinion of
Bond Counsel stating that such supplemental indenture is authorized or permitted by the
Indenture and will, upon the execution and delivery thereof, be valid and binding upon the Issuer
in accordance with its terms, and will not impair the validity under the Utah Act of the Bonds or
adversely affect the Tax-Exempt status of the Bonds.
The Trustee shall provide written notice of any Supplemental Indenture to the Insurer, the
Agent Bank (or the Agent Obligor on an Alternate Liquidity Facility, as the case may be),
Moody s, S&P and the Owners of all bonds then outstanding at least 30 days prior to the
effective date of such Supplemental Indenture. Such notice shall state the effective date of such
Supplemental Indenture, shall briefly describe the nature of such Supplemental Indenture and
shall state that a copy thereof is on file at the principal office of the Trustee for inspection by the
parties mentioned in the preceding sentence.
Except for supplemental indentures entered into for the purposes described in the third
preceding paragraph, the indenture will not be modified, altered, amended, supplemented or
rescinded without the consent of the insurer (unless an Insurer Default has occurred and is
continuing), together with the Owners of not less than 60% in aggregate principal amount of
Bonds outstanding, who shall have the right to consent to and approve any supplemental
indenture; provided that, unless approved in writing by the Insurer (unless an Insurer Default has
occurred and is continuing), and the Owners of all the Bonds then affected thereby, there will not
be permitted (a) a change in the times, amounts or currency of payment of the principal of, or
premium, if any, or interest on any Bonds, a change in the terms of the purchased thereof by the
Trustee, or a reduction in the principal amount or redemption price thereof or the rate of interest
thereon, (b) the creation of a claim or lien on or a pledge of the receipts and revenues of the
Issuer under the Loan Agreement ranking prior to or on a parity with the claim, lien or pledge
created by the Indenture or (c) a reduction in the aggregate principal amount of Bonds the
consent of the Owners of which is required to approve any such supplemental indenture or which
is required to approve any amendment to the Loan Agreement. No such amendment of the
Indenture shall be effective without the prior written consent of the Company and the Agent
Bank (or the Agent Obligor on an Alternate Liquidity Facility, as the case may be).
THE REPLACEMENT ST ANDRY BOND PURCHASE AGREEMENT
References herein to the "Bank" or "Banks" include their respective successors.
Purchases of Bonds in the event and to the extent that such Bonds are not remarketed by
the Remarketing Agent or redeemed or purchased by the Company will be funded under the
Replacement Standby Bond Purchase Agreement.
The obligation of the Bank to purchase Bonds will expire at 5:00 p.m. (New York City
time) on December 31, 2007, unless extended or earlier terminated as described herein. The
terms of the Replacement Standby Bond Purchase Agreement will . permit the Trustee, in
accordance with the terms thereof, to notify the Bank of the aggregate principal amount of the
Bonds to be purchased by the Bank up to the aggregate principal amount of the Bonds (this
amount will be reduced as Bonds are paid or redeemed as described below) plus accrued interest
thereon (up to a maximum of 62 days' interest on the principal sum set forth above) at an
assumed annual interest rate of 12% to enable the Trustee to pay the purchase price of Bonds
delivered to it for purchase and not remarketed and not redeemed or purchased by the Company.
THE REPLACEMENT STANDBY BOND PURCHASE AGREEMENT IS TO FUND PURCHASES
OF BONDS WHICH ARE TENDERED BUT NOT REMARKETED BY THE REMARKETING AGENT AND
DOES NOT PROVIDE SECURITY FOR THE PAYMENT OF PRINCIPAL OF AND PREMIUM, IF ANY, AND
INTEREST ON THE BONDS AS THE SAME BECOME DUE AND PAYABLE. UNDER CERTAIN
CIRCUMST ANCES DESCRIBED HEREIN, PURCHASES WILL NOT BE MADE UNDER THE
REPLACEMENT STANDBY BOND PURCHASE AGREEMENT AND, THEREFORE, FUNDS MAY NOT
BE AVAILABLE TO PURCHASE TENDERED BONDS. IF A BANK ASSIGNS A PORTION OF ITS
COMMITMENT UNDER THE REPLACEMENT STANDBY BOND PURCHASE AGREEMENT TO ONE OR
MORE OTHER BANKS, THE OBLIGATIONS OF THE BANKS (INCLUDING ANY ASSIGNEE BANK) TO
PURCHASE BONDS UNDER THE REPLACEMENT STANDBY BOND PURCHASE AGREEMENT WILL
BE SEVERAL AND NOT JOINT. THEREFORE, IF ONE BANK FAILS TO FuND ITS PORTION OF THE
COMMITMENT, THE OTHER BANKS PARTY TO THE REPLACEMENT STANDBY BOND PuRCHASE
A GREEMENT WILL HAVE NO OBLIGATION WITH RESPECT TO THAT PDRTION OF THE
COMMITMENT .
CONDITIONS PRECEDENT TO PURCHASES OF BONDS UNDER THE REPLACEMENT STANDBY
BOND PURCHASE AGREEMENT
The obligation of the Bank to purchase Bonds, which are tendered for purchase as
described in the Official. Statement under "THE BONDS - Optional Purchase" and" - Mandatory
Purchase" but not resold by the Remarketing Agent, under the Replacement Standby Bond
Purchase Agreement will be subject to satisfaction, among others, of each of the following
conditions precedent:
(a) The Agent Bank shall have received from the Trustee the notices specified
in the Replacement Standby Bond Purchase Agreement relating to the aggregate principal
amount of unremarketed Bonds, plus accrued interest thereon, to be purchased by the
Bank, which amount shall not exceed the amount of the Bank's commitment.
(b)
continuing.
No Event of Termination (as defined below) shall have occurred and be
(c)The Bank's commitment shall not have been terminated as described
below.
The Bank will have no obligation to purchase unremarketed Bonds held by or for the
account of the Company, any affiliate of the Company or any broker-dealer holding Bonds
pursuant to an arrangement with the Company.
EVENTS OF DEFAULT
Each of the following "Events of Default" under the Replacement Standby Bond
Purchase Agreement is referred to in this Reoffering Circular as an "Event of Termination : 1
(a) The ratings assigned to the Insurer s long-term debt or financial strength
are withdrawn or are reduced below BBB- (or its equivalent rating) by S&P (as defined
in the Official Statement) and are withdrawn or reduced to below Baa3 (or its equivalent
rating) by Moody s (as defined in the Official Statement); or
(b) A "Bond Insurer Event of Insolvency," as defined in the Replacement
Standby Bond Purchase Agreement, shall have occurred; or
(c) The Insurer shall fail, wholly or partially, to make a payment of principal
or interest to the Trustee as required under the Insurance Policy; or
(d) The Insurer shall claim or assert that the Insurance Policy is invalid or
unenforceable against the Insurer or shall repudiate its obligations or deny that it has any
The list of the Events of Termination is not an exhaustive list of the Events of Default under the Replacement
Standby Bond Purchase Agreement.
further liability under the Insurance Policy or the validity or enforceability of the
Insurance Policy shall be contested directly or indirectly by the Insurer or any
governmental authority and, in the case of a person other than the Insurer, the Insurer
shall fail to defend or to assert such validity or enforceability or to appeal 'Such contest; or
(e) Any governmental authority with competent jurisdiction shall announce
find or rule that the Insurance Policy is null and void or otherwise invalid or
unenforceable against the Insurer; or
(f) The Insurance Policy is surrendered, cancelled or tenninated, or amended
or modified in any material respect that is adverse to the Banks, without each Bank'
prior written consent; or
(g) A court of competent jurisdiction enters a final nonappealable judgment
that the Insurance Policy is not valid and binding on or enforceable against the Insurer.
CONSEQUENCES OF EVENT OF TERMINATION
(a) In the case of an Event of Tennination as specified in subparagraph (d) or (e) above
under "Events of Default," the Bank's obligation to purchase unremarketed Bonds under the
Replacement Standby Bond Purchase Agreement shall be immediately suspended (but not
terminated) without notice or demand and thereafter the Bank shall be under no obligation to
purchase any unremarketed Bonds until the Bank's commitment under the Replacement Standby
Bond Purchase Agreement is reinstated as described below. Promptly upon obtaining
knowledge of such an Event of Tennination, the Agent Bank shall notify the Trustee and the
Remarketing Agent of such suspension in writing; provided, however that neither the Agent
Bank nor the Bank shall incur any liability or responsibility whatsoever by reason of the Agent
Bank's failure to give such notice and such failure shall in no way affect the suspension of the
Bank's commitment and of its obligation to purchase unremarketed Bonds pursuant to the
Replacement Standby Bond Purchase Agreement. If a court of competent jurisdiction shall
thereafter enter a final, nonappealable judgment that such Insurance Policy is not valid and
binding on the Insurer, then the commitment and the obligation of the Bank to purchase
unremarketed Bonds shall immediately terminate without notice or demand and thereafter the
Bank shall be under no obligation to purchase unremarketed Bonds. If a court with jurisdiction
to rule on the validity of the Insurance Policy shall find or rule that such Insurance Policy is valid
and binding on the Insurer, then the commitment and the obligations of the Bank under the
Replacement Standby Bond Purchase Agreement shall thereupon be reinstated (unless the
commitment period shall otherwise have expired or the commitment shall otherwise have been
terminated as provided in the Replacement Standby Bond Purchase Agreement).
Notwithstanding the foregoing, if three years after the effective date of suspension of the Bank'
commitment and obligations, the Replacement Standby Bond Purchase Agreement has not been
tenninated and litigation is still pending and a judgment regarding the validity and enforceability
of the Insurance Policy has not been obtained, then the commitment and the obligation of the
Bank to purchase unremarketed Bonds shall at such time tenninate without notice or demand and
thereafter, the Bank shall be under no obligation to purchase unremarketed Bonds.
(b) In the event of the commencement and during the continuation of an involuntary
case or other proceeding against the Insurer seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other similar law, or seeking
the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, the obligation of the Bank to purchase unremarketed Bonds shall
immediately be suspended (but not terminated) without notice or demand and shall be terminated
if such proceeding remains undismissed or unstayed for a period of 60 days. If such proceeding
is dismissed or stayed within such 60-day period, the Bank's commitment shall be reinstated.
(c) In the case of an Event of Termination as specified in subparagraph -(a) above under
Events of Default," the Bank's obligation to purchase unremarketed Bonds under the
Replacement Standby Bond Purchase Agreement shall be immediately suspended (but not
terminated) without notice or demand and the commitment of the Bank shall terminate 30 days
thereafter if such Event of Termination shall then be continuing.
(d) In the case of any Event of Termination as specified in subparagraphs (b), (c), (f)
and (g) above under - Events of Default" or in the case of any other event described above
which results in the termination of the Bank's obligation to purchase unremarketed Bonds, the
commitment and the obligation of the Bank to purchase unremarketed Bonds shall immediately
terminate without notice or demand, and thereafter the Bank shall be under no obligation to
purchase unremarketed Bonds. Promptly upon any such event, the Agent Bank shall give written
notice of the same to the Trustee and the Remarketing Agent; provided, however, that neither the
Agent Bank nor the Bank shall incur any liability or responsibility whatsoever by reason of the
Agent Bank's failure to give such notice and such failure shall in no way affect the termination
of the Bank's commitment and of its obligation to purchase unremarketed Bonds pursuant to the
Replacement Standby Bond Purchase Agreement.
In the event that the commitment of the Bank (or the Obligor (as defined in the Official
Statement) on an Alternate Liquidity Facility (as defined in the Official Statement), as the case
may be) to provide moneys to pay the purchase price of the Bonds is suspended, the Trustee shall
on the day that any such suspension is lifted, take the action specifIed in the Replacement
Standby Bond Purchase Agreement (or an Alternate Liquidity Facility, as the case may be) to
make moneys available to pay the purchase price of the Bonds that were tendered for purchase
and were not purchased during such period of suspension.
EXTENSION, REDUCTION OR TERMINATION OF THE REPLACEMENT STANDBY BOND PuRCHASE
AGREEMENT; ALTERNATE LIQUIDITY FACILITY
The obligation of the Bank to purchase Bonds under the Replacement Standby Bond
Purchase Agreement shall expire at 5:00 p.m. (New York City time) on the commitment
termination date, which is the earliest to occur of (i) December 31, 2007, unless extended for
one-year periods as provided in the Replacement Standby Bond Pur(;hase Agreement, ~ii) the
date on which the Bonds are no longer outstanding under the Indenture, (iii) the date on which an
Alternate Liquidity Facility or Substitute Standby Bond Purchase Agreement is substituted for
the Replacement Standby Bond Purchase Agreement, (iv) the date on which the Bank'
commitment to purchase Bonds is terminated due to the occurrence of certain Events of
Tennination, as described above under "Consequences of Event of Tennination," or (v) the
date of a termination by the Company pursuant to the terms of the Replacement Standby Bond
Purchase Agreement.
Upon written request of the Company to the Agent Bank not less than 45 nor more than
120 days prior to December 31 , 2007, (and not less than 45 nor more than 120 days prior to each
yearly anniversary of such date thereafter), the Bank shall use its best efforts to, within 45 days
of such request, notify the Company whether it will extend the scheduled expiration date of the
Replacement Standby Bond Purchase Agreement for a period of one year. If the Bank fails to
notify the Company of its decision, the Bank shall be deemed to have rejected such request.
, Upon any redemption, repayment or other payment of all or any portion of the principal
amount of the Bonds, the aggregate available principal commitment under the Replacement
Standby Bond Purchase Agreement may be reduced, upon written notice to the Agent Bank by
the Trustee, by the principal amount of the Bonds so redeemed, repaid or otherwise paid, as the
case may be. The available commitment shall automatically terminate on the date on which an
Alternate Liquidity Facility for the Bonds has become effective pursuant to the Indenture.
At any time (with not less than 20 days' prior written notice received by the Trustee with
copies of such notice given to the Agent Bank or the Agent Obligor on an Alternate Liquidity
Facility, as the case may be, and the Remarketing Agent) the Company may, at its option
(i) provide for the delivery to the Trustee on any Business Day of an Alternate Liquidity Facility
(including without limitation a line of credit of a commercial bank or a liquidity facility from a
financial institution, or a combination thereof) to replace the Replacement Standby Bond
Purchase Agreement or the Alternate Liquidity Facility then in effect with respect to the Bonds
as the case may be, or (ii) tenninate the Replacement Standby Bond Purchase Agreement or any
Alternate Liquidity Facility then in effect. An Alternate Liquidity Facility may have an
expiration date earlier than the maturity of the Bonds. The Company must furnish to the Trustee
on or before the date of delivery of the Alternate Liquidity Facility or before the effective date of
the tennination of the Replacement Standby Bond Purchase Agreement or Alternate Liquidity
Facility then in effect (i) an opinion of Bond Counsel stating that the delivery of such Alternate
Liquidity Facility or the tennination of the Replacement Standby Bond Purchase Agreement or
the Alternate Liquidity Facility then in effect complies with the. tenDS of the Loan Agreement
and will not adversely affect the Tax-Exempt status of the Bonds, (ii) a certificate of an
Authorized Company Representative as to whether the Bonds are then rated by either Moody
or S&P, or both, and (iii) either (A) written evidence from Moody s, if the Bonds are then rated
by Moody s, and from S&P, if the Bonds are then rated by S&P, in each case to the effect that
such rating agency has reviewed the proposed Alternate Liquidity Facility or the proposed
termination of the Replacement Standby Bond Purchase Agreement or Alternate Liquidity
Facility then in effect, as the case may be, and that the delivery of the proposed Alternate
Liquidity Facility or the proposed termination of the Replacement Standby Bond Purchase
Agreement or Alternate Liquidity Facility then in effect, as the case may be, will not, by itself,
result in a reduction, suspension or withdrawal of such rating agency s short-tenD i"ating or
ratings of the Bonds or (B) written evidence from the Insurer to the effect that the Insurer has
reviewed the proposed Alternate Liquidity Facility or the proposed termination of the
Replacement Standby Bond Purchase Agreement or Alternate Liquidity Facility then in effect, as
10-
the case may be, and finds the same to be acceptable to the Insurer. An assignment by a Bank of
its commitment or any portion thereof under a Replacement Standby Bond Purchase Agreement
to a bank or other institution that is not at the time already a Bank thereunder will be treated as
the delivery of an Alternate Liquidity Facility.
No Alternate Liquidity Facility or Substitute Standby Bond Purchase Agreement may be
provided which (a) so long as the Bonds bear interest at a Daily Interest Rate or a Weekly
Interest Rate, reduces the number of days of interest coverage to a period shorter than 35 days or
(b) so long as the Bonds bear interest at a Term Interest Rate, reduces the number of days of
interest coverage to a period less than such minimum period as may be approved by each rating
agency then maintaining a rating on the Bonds.
In the event that the Company provides for the delivery on any Business Day to the
Trustee of an Alternate Liquidity Facility or for termination of the Replacement Standby Bond
Purchase Agreement or Alternate Liquidity Facility then in effect where the above-described
evidence from Moody s or S&P or from the Insurer is not received, the Bonds are subject to
mandatory purchase unless the obligation of the Bank or the Obligor on an Alternate Liquidity
Facility then in effect, as the case may be, to purchase such Bonds is terminated or suspended, as
more fully described in the Official Statement under the caption "THE BONDs-Mandatory
Purchase. "
SUBSTITUTE STANDBY BOND PuRCHASE AGREEMENT
The Company may, at its election, but only with the written consent of the Bank or the
Obligor on an Alternate Liquidity Facility, as the case may be, at. any time provide for the
delivery to the Trustee of a Substitute Standby Bond Purchase Agreement or an extension of the
Replacement Standby Bond Purchase Agreement or Alternate Liquidity Facility then in effect, as
the case may be, for any period commencing after its then-current expiration date. Any
Substitute Standby Bond Purchase Agreement must be issued by the same Bank or Banks which
are parties to the Standby Bond Purchase Agreement in effect at the time of such substitution and
must (a) be substantially identical as to terms and conditions to the Standby Bond Purchase
Agreement being replaced, except that it may provide for an increase or decrease in the interest
coverage rate or the number of days of interest coverage or any combination of the foregoing, or
(b) contain such amendments, modifications or alterations (i) for which the Company and the
Trustee have received the written consent of the Insurer (unless an Insurer Default shall have
occurred and be continuing) and (ii) that do not result in the reduction, suspension or withdrawal
of the rating or ratings applicable to the Bonds.
THE BOND INSURER
The Insurer is a Wisconsin-domiciled stock insurance corporation regulated by the Office
of the Commissioner of Insurance of the State of Wisconsin and licensed to do business in 50
states, the District of Columbia, the Territory of Guam, the Commonwealth of Puerto Rico and
the U.S. Virgin Islands, with admitted assets of approximately $8,994 000,000 (unaudited) and
statutory capital of approximately $5,647 000 000 (unaudited) as of December 31 , 2005.
11-
Statutory capital consists of the Insurer s policyholders ' surplus and statutory contingency
reserve. Standard & Poor s Credit Market Services, a Division of The McGraw-Hill Companies
Moody s and Fitch Ratings have each assigned a triple-A financial strength rating to the Insurer.
The Insurer has obtained a ruling from the Internal Revenue Service to the effect that the
insuring of an obligation by the Insurer will not affect the treatment for federal income tax
purposes of interest on such obligation and that insurance proceeds representing maturing
interest paid by the Insurer under policy provisions substantially identical to those contained in
the Insurance Policies shall be treated for federal income tax purposes in the same manner as if
such payments were made by the Issuer of the Bonds.
The Insurer makes no representation regarding the Bonds or the advisability of investing
in the Bonds and makes no representation regarding, nor has it participated in the preparation of,
the Official Statement or this Reoffering Circular other than the infonnation supplied by the
Insurer and presented in the Official Statement under the caption "BOND INSURANCE" and in this
Reoffering Circular under the caption "THE BOND INSURER.
AVAILABLE INFORMA nON
The parent company of the Insurer, Ambac Financial Group, Inc. AFG"
),
is subject to
the infonnational requirements of the Securities Exchange Act of 1934, as amended (the
Exchange Act
),
and in accordance therewith fIles reports, proxy statements and other
information with the Securities and Exchange Commission (the Commission
).
These reports,
proxy statements and other information can be read and copied at the Commission s public
reference room at 100 F Street, N., Room 1580, Washington, D.c. 20549. Please call the
Commission at 1-800-SEC-0330 for further information on the public reference room. The
Commission maintains an internet site at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding companies that file electronically with
the Commission , including AFG. These reports , proxy,statements and other information can also
be read at the offices of the New York Stock Exchange, Inc. (the NYSE"
),
20 Broad Street,
New York, New York 10005.
Copies of the Insurer s financial statements prepared in accordance with statutory
accounting standards are available from the Insurer. The address of the Insurer s administrative
offices and its telephone number are One State Street Plaza, 19th Hoor, New York, New York
10004 and [phone].
INCORPO RA nON OF CERTAIN DOCUMENTS BY REFERENCE
The following document fIled by AFG with the Commission (File No. 1-10777) is
incorporated by reference in this Reoffering Circular:
. AFG's Annual Report on Form IO-K for the fiscal year ended December 31 2005
and filed on March 13,2006.
12-
All documents subsequently filed by AFG pursuant to the requirements of the Exchange
Act after the date of this Reoffering Circular will be available for inspection in the same manner
as described above in ..THE BOND INSURER -Available Information.
TAX EXEMPTION
The opinion of Chapman and Cutler LLP, Bond Counsel, delivered for the Bonds on
November 17, 1994, stated that, subject to compliance by the Company and the Issuer with
certain covenants made to satisfy pertinent requirements of the Internal Revenue Code of 1954
as amended (the "1954 Code
),
and the Internal Revenue Code of 1986, under then existing law
interest on the Bonds is not includible in gross income of the owners thereof for federal income
tax purposes, except for interest on any Bond for any period during which such Bond is owned
by a person who is a substantial user of the Project or the Facilities or any person considered to
be related to such person (within the meaning of Section 1O3(b)(13) of the 1954 Code), and the
interest on the Bonds will not be treated as an item of tax preference in computing the alternative
minimum tax for individuals and corporations. Bond Counsel was of the opinion that interest on
the Bonds will be taken into account, however, in computing an adjustment used in determining
the alternative minimum tax for certain corporations. As indicated in such opinion, the failure to
comply with certain of such covenants of the Issuer and the Company could cause the interest on
the Bonds to be included in gross income retroactive to the date of issuance of the Bonds.
Chapman and Cutler LLP has made no independent investigation to confmn that such covenants
have been complied with.
Chapman and Cutler LLP will deliver an opinion in connection with the delivery of the
Replacement Standby Bond Purchase Agreement to the effect that the delivery of the
Replacement Standby Bond Purchase Agreement (i) complies with the terms of the Loan
Agreement and (ii) will not adversely affect the tax-exempt status of the Bonds. Except
necessary to render the foregoing opinions, Chapman and Cutler LLP has not reviewed or
inquired as to any events occurring subsequent to the initial issuance of the Bonds.
CERTAIN LEGAL MA TIERS
In connection with the issuance of the Replacement Standby Bond Purchase Agreement
certain legal matters will be passed upon for the Company by its in-house counsel and by Stoel
Rives LLP, Portland, Oregon, and certain legal matters will be passed upon for the Bank by its
in-house counsel. Chapman and Cutler LLP, Bond Counsel, will deliver the opinion described
above under "TAX EXEMPTION.
13-
ApPENDIX A
P ACIFICORP
The following information concerning PacifiCorp (the "Company ) has been provided
by representatives of the Company and has not been independently confirmed or verified by the
Remarketing Agents, the Issuer or any other party. No representation is made herein as to the
accuracy, completeness or adequacy of such information or as to the absence of material
adverse changes in the condition of the Company or in such information after the date hereof,
that the information contained or incorporated herein by reference is correct as of any time after
the date hereof
The Company is a regulated electricity company operating in the states of Utah, Oregon,
Wyoming, Washington, Idaho and California. The Company generates electricity and conducts
its retail electric utility business as Pacific Power, Utah Power and Rocky Mountain Power and
also engages in electricity sales and purchases on a wholesale basis. The subsidiaries of the
Company support its electric utility operations by providing coal mining facilities and services
and environmental remediation.
The Company s operations are exposed to risks, including the outcome of general rate
cases and other proceedings conducted by regulatory commissions; changes in prices and
availability of wholesale electricity, natural gas and other fuel sources and other changes in
operating costs; changes in regulatory requirements or other legislation; industrial, commercial
and residential customer growth and demographic patterns in the Company s service territories;
economic trends affecting electricity usage; changes in weather conditions and other natural
events affecting supply and demand of electricity; a high degree of variance between actual and
forecasted load and prices; hydroelectric conditions, as well as natural gas and coal production
and price levels; perfonnance of the Company s generation facilities; the cost, feasibility and
eventual outcome of hydroelectric facility relicensing proceedings; environmental and
endangered species laws and regulations; the impact of new accounting pronouncements or
changes in current accounting estimates and assumptions on financial position and results of
operations; the impact of interest rates, investment performance and increases in health care costs
on pension and post-retirement expense; the impact of amendments to existing financing
arrangements; continued availability of funds to meet liquidity requirements; the impact of any
required performance under off-balance sheet arrangements; financial condition and
creditworthiness of significant customers and suppliers; the impact of financial derivatives used
to mitigate or manage interest rate risk and volume and price risk due to weather extremes;
changes in the Company s credit ratings; the impact of implementation of any re.gional
transmission entity; and completion of the Company s resource procurement process and
construction and pennitting of future generation plants and infrastructure additions. In addition
the energy business exposes the Company to the financial, liquidity, credit, volumetric and
commodity price risks associated with wholesale sales and purchases. See the Incorporated
Documents under - Incorporation of Certain Documents by Reference.
The principal executive offices of the Company are located at 825 N.E. Multnomah, Suite
2000, Portland, Oregon 97232; the telephone number is [phone].
AVAILABLE INFORMATION
The Company is subject to the infonnational requirements of the Securities Exchange Act
of 1934, as amended (the Exchange Act
),
and in accordance therewith files reports and other
infonnation with the Securities and Exchange Commission (the Commission ). Such reports
and other information (including proxy and infonnation statements) filed by the Company may
be inspected and copied at public reference rooms maintained by the Commission in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the Commission at
800-SEC-0330 for further information on the public reference rooms. The Company s filings
with the Commission are also available to the public at the website maintained by the
Commission at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant to the
Exchange Act are incorporated herein by reference:
Annual Report on Fonn IO-K for the fiscal year ended March 31 , 2005.
Quarterly Reports on Fonn IO-Q for the three months ended June 30, 2005
September 30, 2005 and December 31 , 2005.
Current Report on Form 8-, dated April 14, 2005.
Current Report on Fonn 8-K, dated May 2, 2005.
Current Report on Fonn 8-, dated June 13,2005.
Current Report on Fonn 8-K, dated July 21,2005.
Current Report on Fonn 8-, dated August 29, 2005.
Current Report on Form 8-K, dated September 5, 2005.
Current Report on Form 8-K, dated September 28 2005.
10.Current Report on Fonn 8-, dated November 29, 2005.
11.Current Report on Fonn 8-, dated December 20, 2005.
12.Current Report on Fonn 8-K, dated December 30, 2005.
13.Current Report on Form 8-, dated January 12,2006.
14.Current Report on Form 8-, dated January 27, 2006.
15.Current Report on Form 8-, dated February 13, 2006.
16.Current Report on Form 8-, dated February 21, 2006.
17.Current Report on Form 8-, dated February 28, 2006.
18.Current Report on Form 8-, dated March 17 2006.
19.All other documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15( d) of the Exchange Act after the date hereof.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the filing of the Quarterly Report on Form lO-Q for the three months ended
December 31 , 2005 and before the termination of the reoffering made by this Reoffering Circular
(the Reoffering Circular shall be deemed to be incorporated by reference in this Reoffering
Circular and to be a part hereof from the date of filing such documents (such documents and the
documents enumerated above, being hereinafter referred to as the Incorporated Documents
provided, however that the documents enumerated above and the documents subsequently filed
by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act in each year
during which the reoffering made by this Reoffering Circular is in effect before the filing of the
Company s Annual Report on Form lO-K covering such year shall not be Incorporated
Documents or be incorporated by reference in this Reoffering Circular or be a part hereof from
and after such filing of such Annual Report on Form lO-
Any statement contained in an Incorporated Document shall be deemed to be modified or
superseded for purposes hereof to the extent that a statement contained herein or in any other
subsequently filed Incorporated Document 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 hereof.
The Incorporated Documents are not presented in this Reoffering Circular or delivered
herewith. The Company hereby undertakes to provide without charge to each person to whom a
copy of this Reoffering Circular has been delivered, on the written or oral request of any such
person, a copy of any or all of the Incorporated Documents, other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference therein. Requests for
such copies should be directed to Investor Relations, PacifiCorp, 825 N .E. Multnomah,
Suite 2000 , Portland, Oregon 97232, telephone number [phone]. The information
relating to the Company contained in this Reoffering Circular does not purport to be
comprehensive and should be read together with the information contained in the Incorporated
Documents.
APPENDIX B
THE BANK OF NOVA SCOTIA
The following information concerning The Bank of Nova Scotia (the "Bank") has been
provided by representatives of the Bank and has not been independently confirmed or verified by
the Remarketing Agent, the Issuer or the Company. No representation is made herein as to the
accuracy, completeness or adequacy of such information or as to the absence of material
adverse changes in the condition of the Bank or in such information subsequent to the date
hereof, or that the information contained or incorporated herein by reference is correct as of any
time subsequent to its date.
THE BANK
As of January 31,2006, the Bank had assets in an amount equivalent to approximately
CAD$325 billion and deposits in an amount equivalent to approximately CAD$217 billion, the
Bank also possessed a total capital ratio of 12.8% as at January 31 2006. Its net income for the
fiscal year ended October 31 , 2005 was equivalent to approximately CAD$3,209 million.
The Bank maintains offices in 50 countries worldwide and is headquartered in Toronto,
Ontario, Canada. Corporate banking operations in the United States of America began in 1885,
and currently, the Bank has offices in New York, Boston, Atlanta, Chicago, Houston San
Francisco and Portland.
The Bank was founded in 1832 in Halifax, Nova Scotia, Canada, and is now one of
Canada s largest financial institutions. Common shares of the Bank are traded on the New York
Stock Exchange (ticker: BNS), Vancouver, Alberta, Winnipeg, Toronto, Montreal and London
stock exchanges. In addition to the corporate banking services provided in the United States of
America, the Bank provides corporate, investment, capital markets, commercial, and consumer
services in Canada through 1968 offices, as well as select services throughout its international
banking network.
Additional information relating to the Bank, including its annual report, may be obtained
through its website at www.scotiabank.com. The Bank's most recent annual report is
incorporated in this Reoffering Circular by reference.
ApPENDIX C
OFFICIAL STATEMENT DATED
NOVEMBER 16, 1994
SIX NEW ISSUES-BOOK-ENTRY ONLY
Subject to compliance by the Company and the Issuers with certain covenants, in the opinion of Chapman and Cutler.
Bond Counsel, under present law (a) interest on the Bonds will not be includible in gross income of the owners thereof for
federal income tax purposes. except for interest on any Bond for any period during which such Bond is owned by person
who is substantial user of the Facilities or any person considered to be related to such person (within the meaning of
Section 103(b)(13) of the Intemal Revenue Code of 1954, as amended), and (b) interest on the Bonds will not be treated
as an item of tax preference in computing the alternative minimum tax for individuals and corporations. Such interest will
be taken into account, however, in computing the corporate alternative minimum tax, as more fully discussed under the
heading 'Tax Exemption" herein. Bond Counsel is also of the opinion that under present law (a) interest on the Emery
Bonds and Carbon Bonds will be exempt from taxes imposed by the Utah Individual Income Tax Act. (b) the State of
Wyoming imposes no income taxes that would be applicable to interest on the Converse Bonds. the Lincoln Bonds or the
Sweetwater Bonds and (c) interest on the Moffat Bonds is not included in Colorado taxable income for purposes of the
income tax imposed by the State of Colorado pursuant to Article 22 of Title 39 of the Colorado Revised Statutes.
amended. al/ as more fully discussed under the heading "Tax Exemption" herein.
Composite Issue
$216,470 000
Pollution Control Revenue Refunding Bonds
(PacifiCorp Projects)
Series 1994
Dated: Date of Delivery Due: See Inside Cover
The Bonds of each Issue described in this Official Statement are limited obligations of the respective Issuers and.
except to the extent payable from Bond proceeds and certain other moneys pledged therefor, will be payable solely from
and secured by a pledge of payments to be made under separate Loan Agreements entered into by the respective Issuers
with, and secured by First Mortgage Bonds to be issued by,
PacifiCorp
Simultaneously with the delivery of the Bonds of each Issue, a separate municipal bond insurance policy guaran-
teeing the payment of principal of and interest on the Bonds of such Issue when due will be issued by
AMBAC
. The Bonds of each Issue will initially bear interest at a Daily4tnterest Rate from their date of issue. Thereafter, the
interest rate on the Bonds may be changed from time to time to Daily, Weekly, Flexible orTerm Interest Rates, designated
and determined as described herein. The Bonds are subject to purchase at the option of the owners thereof and, under
certain circumstances, are subject to mandatory purchase in the manner and at the times described herein. Purchases of
tendered Bonds in the event and to the extent not remarketed by the Remarketing Agents will initially be funded under
separate Standby Bond Purchase Agreements with respect to each Issue among the Company and the Banks. The
Bonds are subject to optional and mandatory redemption prior to maturity as described herein.
The Bonds are issuable as fully registered Bonds without coupons and will be registered in the name of Cede & Co.,
as registered owner and nominee for The Depository Trust Company ("DTC"), New York, New York. DTC initially will act
as securities depository for the Bonds. Only beneficial interests in book-entry form are being offered. The Bonds are
issuable during any Daily Interest Rate Period in denominations of $100,000 and any integral multiple thereof (provided
that one Bond need not be in a multiple of $100,000 but may be in such denomination greater than $100,000 as shall be
necessary to account for any principal amount of the Bonds not corresponding directly with $100 000 denominations). So
long as Cede & Co. is the registered owner of the Bonds, as nominee for DTC, the principal of and premium. if any, and
interest on the Bonds will be paid by the Trustee directly to DTC, which will, in turn, remit such amounts to DTC participants
for subsequent disbursement to the beneficial owners of the Bonds.S~e "The Bonds-Book-Entry System.
Price 1 00%
The Bonds of each Issue are offered when as and if issued by the respective Issuer and accepted by the respective
Underwriter. subject to the approval of legality by Chapman and Cutler, Bond Counsel. and certain other conditions.
Certain legal matters will be passed upon for PacifiCorp by Stoel Rives Boley Jones Grey, -counsel to the 'Com-
pany. for Carbon County, Utah by Gene Strate, County Attomey, for Converse County, Wyoming by Thomas
Burley. County Attorney. for Emery County, Utah by David A. Blackwell. County Attorney. and by Ray
Quinney Nebeker. for Lincoln County. Wyoming by Joseph B. Bluemel, County Attorney. for Moffat
County, Colorado by Thomas Thornberry. County Attorney. for Sweetwater County,
Wyoming by Sue Kearns. County and Prosecuting Attorney. and by G.R. Stewart. Civil Deputy
County and Prosecuting Attorney. and for the Underwriters by Chapman and Cutler. It is
expected that delivery of the Bonds will be made through the facilities of DTC in
New Yolk, New Yolk, on or about November , 1994.
Goldman , Sachs & Co.
P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Nnvp.mhp.r 1~ 1 AA4
Composite Issue
Pollution Control Revenue Refunding Bonds
(PacifiCorp Projects)
Series 1994
$9,365,000
Carbon County, Utah
Series 1994
Due: November 1, 2024
$8,190,000
Converse County, Wyoming
Series 1994
Due: November 1, 2024
$15,060 000
Lincoln County, Wyoming
Series 1994
Due: November 1,2024
$40,655 000
Moffat County, Colorado
Series 1994
Due: May 1 2013
$121,940 000
Emery County, Utah
Series 1994
Due: November 1, 2024
$21,260,000
Sweetwater County, Wyoming
Series 1994
Due: November 1, 2024
This offering is for six new issues with separate Issuers, Standby Bond Purchase Agreement Banks, Under-
writers and Remarketing Agt;nts in respect of each Issue as follows:
Standby Bond Purchase
Issuer Amount Agreement Bank
Carbon County 365,000 The Bank of New York
Converse County 190.000 The Bank of New York
Emery County $121,940,000 The Bank of Nova Scotia
Lincoln County $ 15.060,000 The Bank of New York
Moffat County $ 40 655,000 The Bank of New York
Sweetwater County $ 21,260,000 The Bank of New York
Underwriter and
Remarketing
Agent
Morgan Stanley & Co.
Incorporated
P. Mor.gan Securities
Inc.
. Goldman, Sachs & Co.
J.P. Morgan Securities
Inc.
Morgan Stanley & Co.
Incorporated
J.P. Morgan Securities
Inc.
CUSIP
140890 ABO
212491 AFI
291147 CC8
533485 AVO
607874 BX I
870487 BS3
If either Bank assigns a portion of its commitment under the applicable Standby Bond Purchase Agree-
ment to one or more other banks, the obligations of the Banks (including any assignee banks) to purchase
unremarketed Bonds under such Standby Bond Purchase Agreement will be several and not joint. There-
fore, if one such Bank fails to fund its portion of the commitment, the other Banks party to the Standby Bond
Purchase Agreement wiJI have no obligation with respect to that portion of the commitment. The interest
rate and the number of days of interest coverage provided under each Standby Bond Purchase Agreement
shall initially be 12% and 62 days, respectively. The Standby Bond Purchase Agreements will expire on
November 17, 1999, unless extended or earlier terminated in accordance with the terms thereof. The obliga-
tions ofthe Banks to purchase unremarketed Bonds wiJI automatically terminate in certain events, including
events relating to insolvency of the Insurer, failure by the Insurer to make payments as required by the
Insurance Policy, termination, cancellation or material modification of the Insurance Policy, or a judicial
determination that the Insurance Policy is not enforceable against the Insurer. The obligations of the Banks
are also subject to suspension in certain events, without notice, including a ratings downgrade of the Insurer
or ifthe Insurer claims or asserts, or any governmental authority finds, that the Insurance Policy is invalid or
unenforceable, which events, if Dot cured, will also result in termination of the obligations of the Banks.
See "The Standby Bond Purchase Agreements-Events of Default" and "Consequences of Event of
Termination.
No broker: dealer, salesman or other person has been authorized to give any information or to make
any representations other than those contamed in this Official Statement in connection with the offeringmade liereby, and, if given or made, such information or representations must not be relied upon as havingbeen authorized by Carbon County, Utah ("Carbon Count)"), Converse County, Wyoming ("Converse
County ), Emery County) Utah ("Emery County ), Lincoln County, Wyoming ("Uncoln County ), Moffat
County Colorado ("Mort at County ) or Sweetwater County, Wj'oming ("Sweetwater County ) (sometimes
referred to individually as an "Issuer" and collectively as the "Issuers ), PacifiCorp, or the Underwriters.
Neither the delivery of this Official Statement nor any sale hereunder shall under any circumstances create
any implication that there has been no change in the affairs of the Issuers or the Com'pany since the date
hereof. This Official Statement does not constitute an offer or solicitation in any jurisdiction in which suchoffer or solicitation is not authorized, or in which the erson making such offer or solicitation is not
qualified to do so or to any person to whom it is unlawfu to make sucll offer or solicitation. None of the
Issuers has assumed or wi\) assume any responsibility as to the accuracy or completeness of the information
in this Official Statementl other than that relating to itself under the caption "The Issuers." U~n issuance,
the Bonds will not be registered under the Securities Act of 1933, as amended, and will not be listed on any
stock or other securities exchange. Neither the Securities and Exchange Commission nor any other federal.
state, municipal or other governmental entity will have passed upon the accuracy or adequacy of this Officia
Statement or, other than the Issuers, approved the Bonds for sale.
IN CONNECTION WITH TillS OFFERING, THE UNDERWRITERS MAY OVERALLOT OREFFECT TRANSACTIONS WmCH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SECURITIES OFFERED HEREBY AT A I.EVEL ABOVE THAT WmCH MIGHT OTHERWISEPREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DIS-
CONTINUED AT A."IY TIME.
TABLE OF CONTENTS
IntroducroryStatcment "
" ...
Thelssuers "
.........,..... ....
TheFacililies......................... .....
Use of Proceeds ................................The Bonds............................ ....
Bond Insurance ................................
The Standby Bond Purchase Agreements. .
. . . . . . . . . . . . . . .
The Loan Agreements ............................
Thelndentures ................................
TheFirslMongageBonds .........................
Liligalion ...................................
Underwriting .................................
Tax~;I(emptlon ................................
CertamLegalManers ............................Miscellaneous...,.............................
ApPENDIX A- PaciiiCorp
ApPENDIX B - Specimen Insurance Policy
ApPENDIX C Information Regarding Banks
APPENDIX D- Form of Opinion of Hond Counsel - Carbon Bonds
ApPENDIX E - Form of Opinion of Bond Counsel - Emery Series
ApPENDIX F - Form of Opinion of Bond Counsel - Converse Bonds
ApPENDIX G - Form of Opinion of Bond Counsel - Lincoln Bonds
ApPENDIX H - Form of Opinion of Bond Counsel - Sweetwater Bonds
ApPENDIX I - Form of Opinion of Bond Counsel - Moffat Bonds
$216,470 000
Pollution Control Revenue Refunding Bonds
(pacifiCorp Projects)
Series 1994
$9,365,000
Carbon County, Utah
Series 1994
$15,060,000
Lincoln County, Wyoming
Series 1994
$8,190,000
Converse County, Wyoming
Series 1994
$121,940,000
Emery County, Utah
Series 1994
$40,655,000
Moffat County, Colorado
Series 1994
$21,260,000
Sweetwater County, Wyoming
Series 1994
~ODUCTORY STATEMENT
This Official Statement, including the Appendices hereto and the documents incorporated by reference
herein, is provided to furnish certain information with respect to the offer by the Issuers of six separate issues
of Pollution Control Revenue Refunding Bonds (PacifiCorp Projects) Series 1994 (collectively, the "Bonds
as follows:
(i)365,000 principal amount of Carbon County, Utah Pollution Control Revenue Refunding
Bonds (PacifiCorp Project) Series 1994 (the "Carbon Bonds
$8,190,000 principal amount of Converse County, Wyoming Pollution Control Revenue
Refunding Bonds (PacifiCorp Project) Series 1994 (the "Converse Bonds
(iii) $121 940,oooprincipal amount of Emery County, Utah PollUtion Control Revenue Refunding
Bonds (PacifiCorp Project) Series 1994 (the "Emery Bonds
(ii)
(iv) $15 060,000 principal amount of Lincoln County, Wyoming Pollution Control Revenue
Refunding Bonds (PacifiCorp Project) Series 1994 (the "Lincoln Bonds"
$40,655,000 principal amount of Moffat County, Colorado Pollution Control Revenue
Refunding Bonds (PacifiCorp Project) Series 1994 (the "Moffat Bonds
(vi) $21,260,000 principal amount of Sweetwater County, Wyoming Pollution Control Revenue
Refunding Bonds (PacifiCorp Project) Series 1994 (the "Sweetwater Bonds
(v)
The Carbon Bonds , the Converse Bonds, the Emery Bonds, the Lincoln Bonds, the Moffat Bonds and the
Sweetwater Bonds will be issued under separate Trust Indentures dated as of November I , 1994 (each an
Indenture" and collectively, the "Indentures ) between Carbon County, Converse County, Emery County.
Lincoln County, Moffat County and Sweetwater County, as applicable (each an "Issuer" and collectively, the
Issuers ), and The First National Bank of Chicago, as trustee (the "Trustee ), and under resolutions of the
governing bodies of the respective issuers. Pursuant to separate Loan Agreements between PacifiCorp (the
Company ) and each of the respective Issuers (each a "Loan Agreement" and collectively the "Loan
Agreements ), the respective Issuers will lend the proceeds from the sale of the Bonds to the Company and
those proceeds will be used, together with certain other moneys of the Company, to refund all of the
oUtstanding (i) $9 365,000 principal amount of Carbon County, Utah , Pollution Control Revenue Bonds (Utah
Power & Light Company Project) Series A of 1974 due February 1 , 2004 (the "Prior Carbon Bonds
(ii) $8,190,000 principal amount of Converse County, Wyoming Collateralized Pollution Control Revenue
Bonds (Pacific Power & Light Company Project) Series 1977 (the "Prior Converse Bonds ); (iii) $13 190,'000
principal amount of Emery County, Utah , Pollution Control Revenue Bonds (Utah Power & Light Company
Project) Series A of 1974 due February I 2004 (the "Prior Emery 1974 Bonds ); (iv)$50 OOO,000 principal
amount of Emery County, Utah, PolIution Control Revenue Bonds, 6-3/8 % Series due November I , 2006 (Utah
Power & Light Company Project) (the "Prior Emery 6-3/8% Bonds ); ~v) $42,000,000 principal amount of
Emery County, Utah, Pollution Control Revenue Bonds , 5.90% Series due April 1,2008 (Utah Power & Light
Company Project) (the "Prior Emery 5.90% Bonds ); (vi) $16 750,000 principal amount of Emery County.
Utah, Pollution Control Revenue Bonds (Utah Power & Light Company Project), 10.70% Series due
September 1 2014 (the "Prior Emery 10.70% Bonds ); (vii) $15.060 000 principal amount of Lincoln County,
Wyoming, Pollution Control Revenue Bonds (Utah Power & Light Company Project) Series A of 1974 (the
Prior Lincoln Bonds ); (viii) $40,655 000 principal amount of Moffat County, Colorado, Pollution-Control
Revenue Bonds, Series 1978 (Colorado-Ute Electric Association, Inc. Project) (the "Prior Moffat Bonds ); and
(ix) $21 260 000 principal amount of Sweetwater County, Wyoming, Taxable Pollution Control Revenue
Refunding Bonds (PacifiCorp Project) Series 1994T (the "Prior Sweetwater 1 994T Bonds ). These obligations
have been assumed by the Company as the surviving corporation in its 1989 merger with Utah Power & Light
Company, a Utah corporation, and PacifiCorp, a Maine corporation or, in the case of the Prior Moffat Bonds
under that certain Assignment and Assumption Agreement, dated April IS, 1992, between Colorado-Ute
Electric Association, Inc. ("Colorado-Ute ) and the Company.
The Prior Emery 1974 Bonds, the Prior Emery 6-3/8% Bonds, the Prior Emery 5.90% Bonds and the
Prior Emery 10.70% Bonds are hereinafter collectively referred to as the "Prior Emery Bonds." The Prior
Carbon Bonds, the Prior Converse Bonds, the Prior Emery Bonds, the Prior Lincoln Bonds, the Prior Moffat
Bonds and the Prior Sweetwater 1994T Bonds are hereinafter colle(:tively referred to as the "Prior Bonds.
The Prior Bonds were issued to finance various solid waste disposal facilities and air and water pollution
control facilities as described herein. See "The Facilities.
In order to secure the Company s obligation to repay the loans made to it by the Issuers under the Loan
Agreements , the Company' \?Iill issue and deliver to the Trustee for each Issue its Series 1994-I-First Mortgage
and Collateral Trust Bonds (the "First Mortgage Bonds ) in a principal amount equal to the principal amount
of such Issue of the Bonds, The First Mortgage Bonds may be released upon delivery of collateral in
substitution for the First Mortgage Bonds provided that certain conditions are met as described below under
The Loan Agreements-Loan Payments; The First Mortgage Bonds." The First Mortgage Bonds will be
issued under the Mortgage and Deed of Trust, dated as of January 9, 1989 between the Company and Chemical
Bank, a New York corporation, as successor trustee ("Chemical Bank" or the "Company Mortgage Trustee
as supplemented and amended by ten supplemental indentures, including a Tenth Supplemental Indenture dated
as of August I , 1994 (the "Tenth Supplemental Indenture ), all collectively hereinafter referred to as the
Company Mortgage." As holder of the First Mortgage Bonds, the Trustee will, ratably with the holders of
all other first mortgage bonds outstanding under the Company Mortgage, enjoy the benefit of a lien on
properties. of the Company. See "The First Mortgage Bonds-Security" for a description of the properties of
the Company subject to the lien of the Company Mortgage. The Bonds will not otherwise be secured by a
mortgage of, or security interest in, the Facilities (as hereinafter defined). The First Mortgage Bonds will be
registered in the name of and held by the Trustee for the benefit of the "Owners" of the Bonds and will not
be transferable except to a successor trustee under the Indentures. "Owner" means the registered owner of any
Bond; provided, however, when used in the context of the Tax-Exempt (as herdnafter defined) status of the
Bonds, the term "Owner" shall include each actual purchaser of any Bond ("Beneficial Owner
The Bonds, together with the premium , if any, and interest thereon, will be limited obligations
and not general obligations of the Issuer thereof. None of the Indentures, the Bonds or the Loan
Agreements constitutes a debt or gives rise to a general obligation or liability of any of the Issuers or
constitutes an indebtedness under any constitutional or statutory debt limitation. The Bonds of each
Issue will not constitute or give rise to a pecuniary liability of the Issuer thereof and will not constitute
any charge against such Issuer s general credit or taxing powers; nor will the Bonds of an Issuer
constitute an indebtedness of or a loan of credit of such Issuer. The Bonds shall be payable solely from
the receipts and revenues to be received from the Company as payments under the related Loan
Agreements, or otherwise on the First Mortgage Bonds, and from any other moneys pledged therefor.
Such receipts and revenues and all of the Issuers' rights and interests under the Loan Agreements (except
as noted under "The Indentures-Pledge and Security" below) will be pledged and assigned to the Trustee
as security, equally and ratably, for the payment of the Bonds. The payments required to be made by
the Company under the Loan Agreements, or otherwise on the First Mortgage Bonds, will be sufficient,
together with other funds available for such purpose, to pay the principal of and premium, if any, and
interest on the Bonds. Under no circumstances will any Issuer have any obligation, responsibility or
liability with respect to the Facilities, the Loan Agreements, the Indentures, the Bonds or this Official
Statement, except for the special limited obligation set forth in the Indentures and the Loan Agreements
whereby the Bonds are payable solely from amounts derived from the Company, the Insurance Policies
and the Standby Bond Purchase Agreements (or Alternate Liquidity Facilities (as hereinafter defined),
as the case may be). Nothing contained in the Indentures, the Bonds or the Loan Agreements, or in any
other related documents shall be construed to require any Issuer to operate, maintain or have any
responsibility with respect to any of the Facilities. The Issuers have no liability in the event of wrongful
disbursement by the Trustee or otherwise. No recourse shall be had against any past, present or future
commissioner, officer, employee, official, or agent of any Issuer under the Indentures, the Bonds, the
Loan Agreements or any related document. The Issuers have no responsibility to maintain the
Tax-Exempt status of the Bonds under federal or state law nor any responsibility for any other tax
consequences related to the ownership or disposition of the Bonds.
The Bonds of each Issue contain substantially the same terms and provisions as, but will be entirely
separate from, the Bonds of each other Issue. The Bonds of one Issue will not be payable from or
entitled to any revenues delivered to the Trustee in respect of the Bonds of any other Issue. Redemption
of the Bonds of one Issue may be made in the manner described below without redemption of the Bonds
of any other Issue, and a default in respect of the Bonds of one Issue will not, in and of itself, constitute
a default in respect of the Bonds of the other Issues; however, the same occurrence may constitute a
default with respect to the Bonds of more than one Issue.
The Emery Bonds will be supported by a Standby Bond Purchase Agreement ("The Bank of Nova Scotia
Standby Bond Purchase Agreement ) to be entered into between the Company and The Bank of Nova Scotia.
The Carbon. Converse. Lincoln, Moffat and Sweetwater Bonds will be supported by separate Standby Bond
Purchase Agreements with respect to each Issue (collectively, "The Bank of New York Standby Bond Purchase
Agreements ) to be entered into between the Company and The Bank of New York. The Bank of Nova Scotia
Standby Bond Purchase Agreement and each of The Bank of New York Standby Bond Purchase Agreements
have substantially identical terms and are referred to individually as the "Standby Bond Purchase Agreement
and, collectively, as the "Standby Bond Purchase Agreements." The Bank of Nova Scotia and The Bank of
New York are referred to individually as the "Bank" and collectively as the "Banks." Each of The Bank of
New York and The Bank of Nova Scotia is sometimes referred to herein as the "Agent Bank.Pursuant to
each Standby Bond Purchase Agreement, the Bank party to such agreement will agree, in -certain circumstances,
to purchase Bonds tendered or deemed tendered by the owners thereof for purchase pursuant to the related
Indenture in the event and to the extent not remarketed by the applicable Remarketing Agent (as defined below)
appointed by the Company. If either Bank assigns a portion of its commitment under the applicable Standby
Bond Purchase Agreement to one or more other banks , the obligations of the Banks (including any assignee
banks, which upon assignment will become "Banks") to purchase Bonds under such Standby Bond Purchase
Agreement will be several and not joint. Therefore, if one Bank fails to fund its portion of the commitment,the other Banks party to the Standby Bond Purchase Agreement will have no obligation with respect to that
portion of the commitment. Assignment by any Bank of a portion of its commitment will be permitted only
if the assignee bank is rated at least A-I by Standard & Poor s Ratings Group ("S&P") and po l by Moody
Investors Service ("Moody ). An assignment by a Bank of a portion of its commitment under the Standby
Bond Purchase Agreement will be deemed to be the delivery of an Alternate Liquidity Facility. See "The
Standby Bond Purchase Agreements-Extension , Reduction or Termination of the Standby Bond Purchase
Agreement; Alternate Liquidity Facility." The Standby Bond Purchase Agreements will expire on November
, 1999 unless extended or earlier terminated in accordance with their terms. The obligations of the Banks
to purchase unremarketed Bonds will automatically terminate in certain events, including events relating to
insolvency of the Insurer, failure by the Insurer to make payments as required by the Insurance Policy,
termination, cancellation or material modification of the Insurance Policy, or a judicial determination that the
Insurance Policy is not enforceable against the Insurer. The obligations of the Banks are also subject to
suspension in certain events, without notice, including a ratings downgrade of the Insurer or if the Insurer
claims or asserts, or any governmental authority finds, that the Insurance Policy is invalid or unenforceable
which events, if not cured , will also result in termination of the obligations of the Banks. See "The StandbyBond Purchase Agreements-Events of Default" and "Consequences of Event of Termination.
Goldman, Sachs & Co. has been appointed by the Company as Remarketing Agent with respect to the
Emery Bonds. J.P. Morgan Securities Inc. has been appointed by the Company as Remarketing Agent with
respect to the Converse Bonds, the Lincoln Bonds and the Sweetwater Bonds. Morgan Stanley & Co.
Incorporated has been appointed by the Company as Remarketing Agent with respect to the Carbon Bonds and
the Moffat Bonds. Goldman, Sachs & Co., J.P. Morgan Securities Inc. and Morgan Stanley & Co.
Incorporated are referred to herein as the "Remarketing Agents." The Company will enter into a separate
Remarketing Agreement with each Remarketing Agent with respect to the Bonds to be remarketed by such
Remarketing Agent.
Under certain circumstances described in the applicable Loan Agreement, a Standby Bond Purchase
Agreement may be replaced by an alternate liquidity facility supporting payment of the purchase price of
tendered or deemed tendered Bonds (each an "Alternate Liquidity Facility ). The entity or entities, as the casemay be, obligated to make payment on an Alternate Liquidity Facility shall be referred to herein as the
Obligor, on an Alternate Liquidity Facility." An Obligor on an Alternate Liquidity Facility that is appointed
as "Agent" with respect to that facility shall be referred to herein as the " Agent Obligor on an Alternate
Liquidity Facility." In certain circumstances, the replacement of a Standby Bond Purchase Agreement or anAlternate Liquidity Facility may result in the mandatory purchase of Bonds. In addition, a Standby Bond
Purchase Agreement may be replaced by a substitute standby bond purchase agreement '(a "Substitute Standby
Bond Purchase Agreement ). See "The Standby Bond Purchase Agreements-Extension, Reduction or
Termination of the Standby Bond Purchase Agreement; Alternate Liquidity Facility" and "Substitute Standby
Bond Purchase Agreement.
Concurrently with the issuance of the Bonds, AMBAC Indemnity Corporation (the "Insurer ) will issue
a municipal bond insurance policy with respect, to the Bonds of each Issue (each, an "Insurance Policy" and,
collectively, the "Insurance Policies ). Each Insurance Policy will insure payment only on stated maturity dates
or upon mandatory redemption as a result of a Determination of Taxability (as hereinafter defined) or certain
mandatory redemptions of Unremarketed Bonds (as hereinafter defined) held by a Bank (as described below
under "The Bonds-Special Mandatory Redemption of Bonds ), in the case of principal, and on stated datesfor payment, in the case of interest. Except in the event of payment by the Insurer upon a mandatory
redemption as a result of a Determination of Taxability or certain mandatory redemptions of Unremarketed
Bonds, if the Bonds become subject - to mandatory redemption and insufficient funds are available for
redemption of all outstanding Bonds, the Insurer wiJI remain obligated to pay principal of and interest on
outstanding Bonds on the originally scheduled interest and principal payment dates. In the event of any
acceleration of the principal of the Bonds, the insured payments will be made at such times and in such amounts
as would have been made had there not been an acceleration. Except upon a mandatory redemption as a result
of a Determination of Taxability or certain mandatory redemptions of Unremarketed Bonds held by a Bank,
the Insurer wiJI not guarantee the payment of the principal of the Bonds payable prior to the stated maturity
thereof or the payment of interest other than on a regular interest payment date. See "Bond Insurance" below
and Appendix B hereto.
Brief descriptions of the Issuers, the Facilities, the Banks and the Insurer and summaries of certain
provisions of the Bonds, the Loan Agreements, the Standby Bond Purchase Agreements, the Banks, the
Indentures, the First Mortgage Bonds and the Insurance Policies are included in this Official Statement,
including the Appendices hereto. Information regarding the business, properties and financial condition of the
Company is included in and incorporated by reference in Appendix A hereto. A specimen insurance policy is
included as Appendix B hereto. A brief description of the Banks is included as Appendix C hereto. Proposed
forms of opinions of Bond Counsel are included in Appendices D through I hereto. The descriptions herein
of the Loan Agreements, the Indentures, the Company Mortgage, the Insurance Policies and the Standby Bond
Purchase Agreements are qualified in their entirety by reference tosuch documents, and the descriptions herein
of the Bonds and the First Mortgage Bonds are qualified in their entirety by reference to the forms thereof and
the information with respect thereto included in the aforesaid documents. All such descriptions are further
qualified in their entirety by reference to laws and principles of equity relating to or affecting the enforcement
of creditors' rights generally. Copies of such documents , except the Company Mortgage, may be obtained from
the principal corporate trust office of the Trustee in Chicago, Illinois. The Company Mortgage is available for
inspection at the office of the Company and at the principal office of the Company Mortgage Trustee in New
York. New York.
THE ISSUERS
Carbon County
Carbon County is a political subdivision, duly organized and existing under the Constitution and laws of
the State of Utah. Pursuant to the Utah Industrial Facilities and Development Act, Title 11 , Chapter 17, Utah
Code Annotated 1953 , as amended (the "Utah Act ), Carbon County is authorized to issue the Carbon Bonds,
to enter into the Indenture and the Loan Agreement to which it is a party and to secure the Carbon Bonds by
a pledge to the Trustee of the payments to be made by the Company under such Loan Agreement and the First
Mortgage Bonds.
Converse County
Converse County is a political subdivision, duly organized and existing under the Constitution and laws
of the State of Wyoming. Pursuant to the Sections 15-701 to 15-710. inclusive, of the Wyoming StatUtes
(1977), as amended (the "Wyoming Act ), Converse County is authorized to issue the Converse Bonds, to enter
into the Indenture and the Loan Agreement to which it is a party and to secure the Converse Bonds by a pledge
to the Trustee of the payments to be made by the Company under such Loan Agreement and the 'First Mortgage
Bonds.
, "" _. - ,, p- .
Emery County
Emery County is a political subdivision, duly organized and existing under the ConstitUtion and laws of
the State of Utah. Pursuant to the Utah Act, Emery County is authorized to issue the Emery Bonds, to enter
int.') the Indenture and the Loan Agreement to which it is a parry and to secure the Emery Bonds by a pledge
to the Trustee of the payments to be made by the Company under such Loan Agreements and the First
Mortgage Bonds.
Lincoln County
Lincoln County is a political subdivision, duly organized and existing under the Constitution and laws of
the State of Wyoming. Pursuant to the Wyoming Act , Lincoln County is authorized to issue the Lincoln
Bonds, to enter into the Indenture and the Loan Agreement to which it is a party and to secure the Lincoln
Bonds by a pledge to the Trustee of the payments to be made by the Company under such Loan Agreement and
the First Mortgage Bonds.
Moffat County
Moffat County is a public body corporate and politic, duly organized and existing under the Constitution
and laws of the State of Colorado. Pursuant to the County and Municipality Development Revenue Bond Act
Title 29, Article 3, Colorado Revised Statutes 1973 , as amended (the "Colorado Act ), Moffat County
authorized to issue the Moffat Bonds, to enter into the Indenture and the Loan Agreement to which it is a party
and to secure the Moffat Bonds by a pledge to the Trustee of the payments to be made by the Company under
such Loan Agreement and the First Mortgage Bonds.
Sweetwater County
Sweetwater County is a political subdivision, duly organized and existing under the ConstitUtion and laws
of the State of Wyoming. Pursuant to the Wyoming Act, Sweetwater County is authorized to issue the
Sweetwater Bonds, to enter into the Indenture and the Loan Agreement to which it is a party and to secure the
Sweetwater Bonds by a pledge to the Trustee of the payments to be made by the Company under such Loan
Agreement and the First Mortgage Bonds.
THE FACILITIES
. The Prior Carbon Bonds were issued by Carbon County to finance solid waste disposal facilities or air
or water pollution control facilities (the "Carbon Facilities ) for the Carbon coal-fired electric generating plant
(the "Carbon Plant ) located in Carbon County.
The Prior Converse Bonds were issued to finance air and water pollution control facilities (the "Dave
Johnston Facilities ) for the Dave Johnston coal-fired steam electric power plant (the "Dave JohnstonPlant
located near the town of Glenrock, Wyoming.
The Prior Emery 1974 Bonds were issued by Emery County to finance solid waste disposal facilities or
air or water pollution control facilities (the "Huntington Facilities ) for the Huntington coal-fired electric
generating plant (the "Huntington Plant ) located in Emery County.
The Prior Emery 6-3/8 % Bonds were issued to finance solid waste disposal facilities or air or water
pollution control facilities (the "Emery 1 Facilities ) for the second unit of the Huntington Plant and the Emery
generating plant, which is now known as the Hunter coal-fired steam electric generating plant (the "Hunter
Plant ), each of which is located in Emery County.
The Prior Emery 5.90% Bonds were issued to finance water and air pollution control facilities (the
Emery 2 Facilities ) for the second unit of the Huntington Plant and the Hunter Plant in Emery County.
The Prior Emery 10.70% Bonds were issued to refund the Emery County, Utah $16 750,000 Pollution
Control Revenue Bonds (Utah Power & Light Company Project), dated May 11 , 1984 (the "Emery May 1984
Bonds ), that were issued to finance air or water pollution control facilities (the "Hunter Facilities ) for Unit 3
of the Hunter Plant located in Emery County.
The Prior Lincoln Bonds were issued to finance solid waste disposal facilities or air pollution control
facilities (the "Naughton Facilities ) for the Naughton coal-fired electric generating plant (the "Naughton Plant
located in Lincoln County.
;11
The Prior Moffat Bonds were issued to finance Colorado-Ute s undivided 29% interest in air and water
polJution control facilities (the "Craig Facilities ) in connection with ekctric ~enerating units 1 and 2 of the
Craig Station (the "Craig Station ) located in Moffat County. The Prior Moffat Bonds had been in default
prior to the time the Company assumed an obligation to make payments with respect to the Prior Moffat Bonds
in connection with the Company s acquisition of its interest in the Craig Facilities.
The Prior Sweetwater 1994T Bonds were, issued to temporarily refund the $21 260 000 principal amount
of Sweetwater County, Wyoming, Pollution Control Revenue Bonds (Pacific Power & Light Company Project)
Series 1973 (the "Sweetwater 1973 Bonds ), which were issued to finance the Company s undivided 66-2/3%
interest in the air and water pollution control facilities (the "Jim Bridger Facilities ) for the Jim Bridger-coal-
fired steam electric generating plant (the "Jim Bridger Plant ) located in Sweetwater County.
The Carbon Plant, the Dave Johnston Plant, the Huntington Plant, the Hunter Plant, the Naughton Plant
the Craig Station and the Jim Bridger Plant are hereinafter referred to colIectively as the "Plants" and the
Carbon Facilities, the Huntington Facilities, the Dave Johnston Facilities , the Emery I Facilities, the Emery
2 Facilities, the Hunter Facilities, the Naughton Facilities , the Craig Facilities and the Jim Bridger Facilities
are hereinafter referred to colJectively as the "Facilities." The interest of the Company in each of the Facilities
is hereinafter referred to as the "Project.
USE OF PROCEEDS
It is expected that the proceeds from the sale of the Bonds , together with funds of the Company, will be
applied to the redemption of the principal amount of the Prior Bonds outstanding immediately prior to
redemption on or before January 15 , 1995.
THE BONDS
The six Issues of Bonds will each be an entirely separate issue but will contain substantially the same
terms and provisions. The following is a summary of certain provisions common to the Bonds of the six Issues.
default in respect of one Issue will not. in and of itself, constitute default in respect of any other Issue;
however, the same occurrence may constitute default with respect to more than one Issue. No Issue of the
Bonds is entitled to the benefits of any payments or other security pledged for the benefit of the other Issues.
Optional or mandatory redemption of one Issue of the Bonds may be made in the manner described below
without redemption of the other Issues. Reference is hereby made to the forms of the Bonds in their entirety
for the detailed provisions thereof. References to the Issuer. the Trustee. the Bank. the Paying Agent. the
Registrar. the Remarketing Agent. the Bonds. the Prior Bonds. the Plant. the Facilities. the Indenture. the
Loan Agreement. the Standby Bond Purchase Agreement and other documents and parties shall be deemed to
refer to the Issuer. the Trustee. the Bank or Banks, the Paying Agent. the Registrar. the Remarketing Agent
the Bonds. the Prior Bonds. the Plant. the Facilities. the Indenture. the Loan Agreement. the Standby Bond
Purchase Agreement and such other documents and parties, respectively, relating to each Issue of the Bonds.
Initially capitalized terms used herein and not otherwise defined are used as defined in the Indenture.
General
The Bonds will be issued only as fully registered Bonds without coupons in the manner described below.
The Bonds will be dated as of their date of delivery and will mature on the dates set forth on the inside front
cover page of this Official Statement. The Bonds may bear interest at Daily, Weekly, Flexible or Term Interest
Rates designated and determined from time to time as described herein. The initial Rate Period .(as defined
below) for the Bonds of each Issue wilI be a Daily Interest Rate Period. The Bonds are subject to purchase
at the option of the holders of the Bonds. and under certain circumstances are subject to mandatory purchase
in the manner and at the times described herein. The Bonds are subject to optional and mandatory redemption
prior to maturity in the manner and at the times described herein.
Bonds may be transferred or exchanged for other Bonds in authorized denominations at the principal
office of the Trustee as the registrar and paying agent (in such capacities, the "Registrar" and the "Paying
Agent ). The Bonds will be issued in authorized denominations of $100,000 or any integral multiple of
$100 000 (provided that one Bond need not be in a multiple of $100,000, but may be in such denomination
greater than $100,000 as shall be necessary to account for any principal amount of the Bonds not corresponding
directly with $100 000 denominations) when the Bonds bear interest at a Daily or Weekly Interest Rate;
$100,000 or any integral multiple of $5,000 in excess of $100,000, when the Bonds bear inter.est at a Flexible
Interest Rate; and $5,000 or any integral multiple thereof, when the Bonds bear interest at a Term Inter.est Rate
. (collectively, "Authorized Denominations ). Exchanges and transfers shalJ be made without .charge to the
Owners, except for any applicable tax or other governmental charge.
,,- . - ,,
A "Business Day" is a day except a Saturday, Sunday or other day (a) on which commercial banks
located in the cities in which the principal office of the Agent Bank or the principal office of the Agent Obligor
on an Alternate Liquidity Facility, as the case may be, the principal office of the Trustee, the principal office
of the Remarketing Agent or the principal office ~f the Paying Agent are located are require~ or authorized by
law to remain closed or are closed , or (b) on which The New York Stock Exchange, Inc. IS closed.
Interest Payment Date" means (i) with respect to any Daily or Weekly Interest Rate Period, the first
Business Day of each calendar month , (ii) with respect to any Term Interest Rate Period, the first day of the
sixth month following the commencement of the Term Interest Rate Period and the first day of each sixth
month thereafter, (iii) with respect to any Flexible Segment, the Business Day next succeeding the last day of
such Flexible Segment, (iv) with respect to any Rate Period, the Business Day next succeeding the last day
thereof and (v) with respect to any Bond when it bears interest at a Flexible Interest Rate, any date on which
there is a mandatory purchase of the Bond as described in subparagraph (c) of the first paragraph under
Mandatory Purchase.
Rate Period" means any Daily Interest Rate Period, Weekly Interest Rate Period, Flexible Interest Rate
Period or Term Interest Rate Period.
Record Date" means (i) with respect to any Interest Payment Date in respect of any Daily Interest Rate
Period, Weekly Interest Rate Period or Flexible Segment, the Business Day next preceding such Interest
Payment Date, and (ii) with respect to any Interest Payment Date in respect of any Term Interest Rate P.eriod,
the fifteenth day of the month preceding such Interest Payment Date.
Tax-Exempt " means, with respect to interest on any obligations of a state or local government, including
the Bonds, that such interest is not includible in gross income of the owners of such obligations for federal
income tax purposes, except for any interest on any such obligations for any period during which such
obligations are owned by a person who is a "substantial user" of any facilities financed or refinanced with
such obligations or a "related person " within the meaning of Section 1O3(b)(l3) of the Internal Revenue Code
of 1954 , as amended (the "1954 Code ), whether or not such interest is includible as an item of tax preference
or otherwise includible directly or indirectly for purposes of calculating other tax liabilities, including any
alternative . minimum tax or environmental tax under the Internal Revenue Code of 1986, as amended (the
Code
Payment of Principal and Interest
The principal of and premium, if any, on the Bonds shall be payable to the Owners upon surrender
thereof at the principal office of the Paying Agent. Except when the Bonds are held in book-entry form (see
Book Entry System ), interest shall be payable (i) by bank check or draft mailed by first class mail on the
Interest Payment Date to the Owners as of the Record Date or (ii) during any Rate Period other than a Term
Interest Rate Period, in immediately available funds (by wire transfer or by deposit to the account of the Owner
of any such Bond if such account is maintained with the Paying Agem), but in respect of any Owner of Bonds
in a Daily or Weekly Interest Rate Period only to any Owner which owns Bonds in an aggregate principal
amount of at least $1 000.000 on the Record Date and who shall have provided wire transfer instructions to
the Paying Agent prior to the close of business on such Record Date.
Interest on each Bond shall be payable on each Interest Payment Date for each such Bond for the period
commencing on the immediately preceding Interest Payment Date (or if no interest has been paid thereon
commencing on the date of issuance thereof) to, but not including, such Interest Payment Date. Interest shall
be computed, in the case of any Daily, Weekly, or Flexible Interest Rate Period , on the basis of a 365- or
366-day year, as applicable, for the number of days actually elapsed and, in the case of a Term Interest Rate
Period, on the basis of a 360-day year consisting of twelve 30-day months.
Rate Periods
The term of the Bonds shall be divided into consecutive Rate Periods, during which such Bonds shall bear
interest at a , Daily Interest Rate, Weekly Interest Rate , Flexible Interest Rate or Term Interest Rate, asdescribed below. At any time the Rate Period applicable to any Issue of Bonds may be different from that
applicable to any other Issue of Bonds.
Daily Interest Rate Period
Determination of Dailv Interest Rate.During each Daily Interest Rate Period, the Bonds of an Issue shall
bear interest at the Daily Interest Rate determined by the Remarketing Agent either on each Business Day for
such Business Day or on the next preceding Business Day for the Business Day next succeeding such date of
determination and as may be determined by the Remarketing Agent for any day that is nOt a Business Day on
any such day during which there shall be active trading in Tax-Exempt obligations comparable to the Bonds
for such day.
The Daily Interest Rate shall be the rate determined by the Remarketing Agent (based on an examination
of Tax-Exempt obligations comparable to the Bonds known by the Remarketing Agent to have been priced or
traded under then-prevailing market conditions) to be the lowest rate which would enable the Remarketing
Agent to sell the Bonds on the effective date of such rate at a price (without regard to accrued interest) equal
to 100% of the principal amount thereof. If the Remarketing Agent shall not have determined a Daily Interest
Rate for any day by 10:00 a., New York time, the Daily Interest Rate for such day shall be the same as the
Daily Interest Rate for the immediately preceding day. In no event shall the Daily Interest Rate exceed the
lesser of 18% per annum or the rate specified in any Standby Bond Purchase Agreement or Alternate Liquidity
Facility then in effect, (initially 12% per annum).
Adjustment to Daily Interest Rate Period. The interest rate borne by Bonds of an Issue shall be adjusted
to a Daily Interest Rate upon receipt by the Issuer, the Trustee, the Paying Agent, the Remarketing Agent
and the Agent Bank or the Agent Obligor on an Alternate Liquidity Facility, as the case may be , of a written
notice from the Company. Such notice (1) shall specify the effective date of the adjustment to a Daily Interest
Rate, which shall be (A) a Business Day not earlier than the twentieth day following the third Business Day
after the date of receipt by the Trustee and Paying Agent of such notice (or such shorter period after the date
of such receipt as is acceptable to the Trustee), (B) in the case of an adjustment from a Term Interest Rate
Period, a day on which the Bonds could be redeemed at the option of the Company or the day immediately
following the last day of the then-current Term Interest Rate Period, and (C) in tbe cast of an adjustment from
a Flexible Interest Rate Period, either the day immediately following the last day of the then-current Flexible
Interest Rate Period or the day immediately following the last day of the last Flexible Segment for each Bond
in the then-current Flexible Interest Rate Period, all as determined in accordance with clause (I) or (2),
respectively, under "Flexible Interest Rate Period-Adjustment from Flexible Interest Rates ; provided
however, that if prior to the Company s making such election, any Bonds shall have been called for redemption
and such redemption shall not theretofore have been effected, the effective date of such Daily Interest Rate
Period shall not precede such redemption date; and (2) if the adjustment is from a Term Interest Rate Period
having a duration in excess of one year, shall be accompanied by an opinion of nationally recognized bond
counsel ("Bond Counsel") to the effect that such adjustment (A) is authorized or permitted by the Indenture and
the Utah Act, the Wyoming Act or the Colorado Act, as applicable, and (B) will not adversely affect the Tax-
Exempt status of the interest on the Bonds.
Notice of Adjustment to Daily Interest Rate Period. The Trustee shall give notice by mail of an
adjustment to a Daily Interest Rate Period to the Owners not less than 20 days prior to the effective date of
such Daily Interest Rate Period. Such notice shall state (1) that the interest rate on such Bonds will be adjusted
to a Dally Interest Rate (subject to the Company s ability to rescind its election as described below under
..
- Rescission of Election "), (2) the effective date of such Daily Interest Rate Period , (3) that such Bonds are
subject to mandatory purchase on such effective date, (4) the procedures for such mandatory purchase, ~5) the
purchase price of such Bonds on the effective date (expressed as a percentage of the principal amount thereof),
and (6) that the Owners of such Bonds do not have the right to retain their Bonds on such effective date.
Weekly Interest Rate Period
Determination of Weeklv Interest Rate. During each Weekly Interest Rate Period , the Bonds of an Issue
shall bear interest at the Weekly Interest Rate determined by the Remarketing Agent no later than the first day
of such Weekly Interest Rate Period and thereafter no later than Tuesday of each week during such Weekly
Interest Rate Period, unless any such Tuesday shall not be a Business Day, in which event the Weekly Interest
Rate shall be determined by the Remarketing Agent no later than the Business Day next preceding such
Tuesday.
The Weekly Interest Rate shall be the rate determined by the Remarketing Agent (based on an
examination of Tax-Exempt obligations comparable to the Bonds known by the Remarketing Agent to have been
. priced or traded under then prevailing market conditions) to be the lowest rate which would enable the
Remarketing Agent to sell the Bonds on the effective date of such rate at a price (without regard to accrued
interest) equal to 100% of the principal amount thereof. If the Remarketing Agent shall not have determined
a Weekly Interest Rate for any period, the Weekly Interest Rate shall be the same as the Weekly Interest Rate
......,.,-..---..
for the immediately preceding week. The first Weekly Interest Rate determined for each Weekly Interest Rate
Period shall apply to the period commencing on the first day of the Weekly Interest Rate Period and ending
on the next succeeding Tuesday. Thereafter, each Weekly Interest Rate shall apply to the period -commencing
on each Wednesday and ending on the next succeeding Tuesday, unless such Weekly Interest Rate Period shall
end on a day other than Tuesday, in which event the last Weekly Interest Rate for such Weekly Interest Rate
Period shall apply to the period commencing on the Wednesday preceding the last day of such Weekly Interest
Rate Period and ending on such last day. In no event shall the Weekly Interest Rate exceed the lesser of 18%
per annum or the rate specified in any Standby Bond Purchase Agreement or Alternate Liquidity Facility then
in effect (initially 12 % per annum).
Adjustment to Weekly Interest Rate Period . The interest rate borne by Bonds of an Issue shall be
adjusted to a Weekly Interest Rate upon receipt by the Issuer, the Trustee, the Paying Agent, the Remarketing
Agent and the Agent Bank or the Agent Obligor on an Alternate Liquidity Facility. as the case may be, of a
written notice from the Company. Such notice (I) shall specify the effective date of such adjustment to a
Weekly Interest Rate, which shall be (A) a Business Day not earlier than the twentieth day following the third
Business Day after the date of receipt by the Trustee and Paying Agent of such notice (or such shorter period
after the date of such receipt as is acceptable to the Trustee). (B) in the case of an adjustment from a Term
Interest Rate Period, a day on which the Bonds could be redeemed at the option of the Company or the day
immediately following the last day of the then-current Term Interest Rate Period. and (C) in the case of an
adjustment from a Flexible Interest Rate Period, either the day immediately following the last day of the then-
current Flexible Interest Rate Period or the day immediately following the last day of the last Flexible Segment
for each Bond in the then-current Flexible Interest Rate Period, all as determined in accordance with dause (I)or (2), respectively, under "Flexible Imerest Rate Period-Adjustment from Flexible Interest Rates
provided, however, that if prior to the Company s making such election, any Bonds shall have been -called for
redemption and such redemption shall not theretofore have been effected, the effective date of such Weekly
Imerest Rate Period shall not precede such redemption date; and (2) if the adjustment is from a Term Interest
Rare Period having a duration in excess of one year, shall be accompanied by an opinion of Bond Counsel to
the effect that such adjustment (A) is authorized or permitted by the Indenture and the Utah Act. the Wyoming
Act or the Colorado Act, as applicable, and (B) will not adversely affect the Tax-Exempt status of the interest
on the Bonds.
Notice of Adjustment to Weekly Interest Rate Period. The Trustee shall give notice by mail of an
adjustment to a Weekly Interest Rate Period to the Owners not less than 20 days prior to the effective date of
such Weekly Interest Rate Period. Such notice shall state (1) that the interest rate on such Bonds will be
adjusted to a Weekly Interest Rate (subject to the Company s ability to rescind its election as described below
under "Rescission of Election ), (2) the effective date of such Weeklv Interest Rate Period, (3) that such
Bonds are subject to mandatory purchase on such effective date, (4) 'the procedures for such mandatory
purchase , (5) the purchase price of such Bonds on the effective date (expressed as a percentage of the principal
amount thereof), and (6) that the Owners of such Bonds do not have the right to retain their Bonds on such
effective date.
Term Interest Rate Period
Determination of Term Interest Rate. During each Term Interest Rate Period, the Bonds of an Issue shall
bear interest at the Term Interest Rate determined by the Remarketing Agent on a Business Day selected by
the Remarketing Agem. but not more than 30 days prior to and not later than the effective date of such Term
Interest Rate Period.
The Term Imerest Rate shall be the rate determined by the Remarketing Agent on such date, and
communicated on such date to the Trustee, the Paying Agent and the Company, as being the lowest rate (based
on an examination of Tax-Exempt obligations comparable to the Bonds known by the Remarketing Agent to
have been priced or traded under then prevailing market conditions) which would enable the Remarketing Agent
to sell the Bonds on the effective date of such Term Interest Rate Period at a price (without regard to accrued
interest) equal to 100% of the principal amount thereof. If, for any reason, a Term Interest Rate for any Term
Interest Rate Period shall not be determined or effective, then (I) if the then-current Term Inter.est Rate Period
is for one year or less, the Rate Period for such Bonds will automatically convert to a Daily Interest Rate
Period and (2) if the then-current Term Interest Rate Period is for more than one year, the Rate Period for the
Bonds shall automatically adjust to a Term Interest Rate Period of one year and one day; provided, however
that if the last day of any successive Term Interest Rate Period shall not be a day immediately preceding a
Business Day, then such successive Term Interest Rate Period shall end on the first day immediately preceding
the Business Day next succeeding such day or, if such Term Interest Rate Period would end after the day prior
to the final maturity date of the Bonds, the next succeeding Rate Period shall be a Term Interest Rate Period
ending on the day prior to the final maturity date of the Bonds; provided, further, that in the-case of clause (2)
above, if the Company delivers to the Trustee an approving opinion of Bond Counsel prior to the end of the
then-effective Term Interest Rate Period, the Rate Period for the Bonds will adjust to a Daily Interest Rate
Period. If the Daily Interest Rate for the first day of any such Daily Interest Rate Period is not determined as
described under
" -
Daily Interest Rate Period-Determination of Daily Interest Rate " the Daily Interest Rate
for the first day of such Daily Interest Rate Period shall be 80% of the most recent One-Year Note Index
theretofore published in The Bond Buyer (or, if The Bond Buyer is no longer published or no longer publishes
the One-Year Note Index, the one-year note index contained in the publication determined by the Remarketing
Agent as most comparable to The Bond Buver). If a Term Interest Rate for any such Term Interest Rate
Period described in clause (2) above is not determined as described in the second preceding sentence, the Term
Interest Rate for such Term Interest Rate Period shall be 100% of the most recent One-Y-c:ar Note Index
theretofore published in The Bond Buyer (or, if The Bond BiJver is no longer published or no longer publishes
the One-Year Note Index, the one-year note index contained in the publication determined by the Remarketing
Agent as most comparable to The Bond Buver). In no event shall any Term Interest Rate exceed the lesser of
18% per annum or the rate specified in any Standby Bond Purchase Agreement or Alternate Liquidity Facilitythen in effect (initially 12% per annum).
Adjustment to or Continuation of Term Interest Rate Period. The interest rate borne by Bonds of anlssue
shall be adjusted to or continued as a Term Interest Rate upon receipt by the Issuer, the Trustee, the Paying
Agent , the Remarketing Agent and the Agent Bank or the Agent Obligor on an Alternate Liquidity Facility, as
the case may be, of a written notice from the Company, which notice shall specify the duration ('f the Term
Interest Rate Period during which the Bonds shall bear, or continue to bear, interest at a Term Interest Rate.
Such notice may specify two or more consecutive Term Interest Rate Periods and, if it so specifies, shall
specify the duration of each: such Term Interest Rate Period as provided in this paragraph. Such notice shall
specify the effective date of each Term Interest Rate Period, which shall be 0) a Business Day not earlier than
the twentieth day following the third Business Day after the date of receipt by the Trustee and Paying Agent
of such notice (or such shorter period after the date of such receipt as shall be acceptable to the Trustee), (2) in
the case of an adjustment from or continuation of a Term Interest Rate Period, a day on which the Bonds could
be redeemed at the option of the Company or the day immediately following the last day of the then-current
Term Interest Rate Period, and (3) in the case of an adjustment from a Flexible Interest Rate Period, either the
day immediately following the last day of the then-current Flexible Interest Rate Period or the day immediately
following the last day of the last Flexible Segment for each Bond in the then-current Flexible Interest Rate
Period, all as determined in accordance with clause (1) or (2), respectively, under - Flexible Interest Rate
Period-Adjustment from Flexible Interest Rates ; provided, however, that if prior to the Company s making
such election, any Bonds shall have been called for redemption and such redemption shall not have been
effected, the effective date of such Term Interest Rate Period shall nOt precede soch redemption date. Such
notice shall also specify (1) the last day of such Term Interest Rate Period (which shall be either the day
preceding the maturity date of the Bonds or a day which both ,immediately precedes a Business Day and is at
least one year after such effective date) and (2) unless such Term Interest Rate Period immediately succeeds
a Term Interest Rate Period of the same duration and is subject to the same optional redemption rights, shall
be accompanied by an opinion of Bond Counsel to the effect that such adjustment (i) is authorized or permitted
by the Indenture and the Utah Act, the Wyoming Act or the Colorado Act, as applicable, and (ii) will not
adversely affect the Tax-Exempt status of the interest on the Bonds.
, by 20 days prior to the end of the then-current Term Interest Rate Period, the Trustee has not received
the Company s notice of an adjustment to a Daily Interest Rate Period, a Weekly Interest Rate Period, a Term
Interest Rate Period or a Flexible Interest Rate Period , accompanied by appropriate opinions of Bond Counsel,
then (I) in the event the then-current Term Interest Rate Period is for one year or less, the Rate Period for the
Bonds shall automatically convert to a Daily Interest Rate Period and (2) in the event the current Term Interest
Rate Period is for more than one year, the Rate Period for the Bonds shall automatically adjust to a Term
Interest Rate Period of one year and one day; provided, however, that if the last day of any successive Term
Interest Rate Period shall nOt be a day immediately preceding a Business Day, then such successive Term
Interest Rate Period shall end on the first day immediately preceding the Business Day next succeeding such
day or, if such Term Interest Rate Period would end after the day prior to the final maturity date of the Bonds
the next succeeding Rate Period shall be a Term Interest Rate Period ending on the day prior to the 'final
maturity date of the Bonds; provided, further, that in the case of clause (2) above, if the Company delivers to
the Trustee an approving opinion of Bond Counsel prior to the end of the then-effective Term Interest Rate
Period, the Rate Period for the Bonds will adjust to a Daily Interest Rate Period. If the Daily Interest Rate for
the first day of any such Daily Interest Rate Period is not determined as described under
" -
Daily Interest Rate
Period-Determination of Daily Interest Rate " the Daily Interest Rate for the first day of such Daily Interest
Rate Period will be 80% of the most recent One-Year Note Index theretofore published in The Bond Buyer (or
if The Bond Buyer is no longer published or no longer publishes the One- Year Note Index, the one-year note
index contained in the publication determined by the Remarketing Agent as most comparable to The Bond
Buyer). If a Term Interest Rate for any such Term Interest Rate Period described in clause (2) above is not
determined as described in the second preceding sentence, the Term Interest Rate for such Term Interest Rate
Period shall be 100% of the most recent One-Year Note Index theretofore published in The Bond Buver (or
if The Bond Buyer is no longer published or no longer publishes the One-Year Note Index, the one-year note
index contained in the publication determined by the Remarketing Agent as the most comparable to The Bond
Buyer)
The notice of an adjustment to or continuation of a Term Interest Rate may specify that such Term
Interest Rate Period shall be automatically renewed for successive Term Interest Rate Periods each having the
same duration as the Term Interest Rate Period so specified; provided , however, that such election must be
accompanied by an opinion of Bond Counsel to the effect that such continuing automatic renewals of such Term
Interest Rate Period (1) are authorized or permitted by the Indenture and the Utah Act, the Wyoming Act or
the Colorado Act, as applicable, and (2) will not adversely affect the Tax-Exempt status of interest on the
Bonds. If such election is made , no opinion of Bond Counsel shall be required in connection with the
commencement of each successive Term Interest Rate Period determined in accordance with such election.
the same time the Company elects to have the Bonds bear interest at a Term Interest Rate. or to continue to
bear interest at a Term Interest Rate, the Company may also specify in the notice to the Trustee optional
redemption prices and periods different from those set forth in the Indenture during the Term Interest Rate
Period(s) with respect to which such election is made; provided, however, that such notice shall be
accompanied by an opinion of Bond Counsel to the effect that such changes are authorized or permitted by the
Utah Act, the Wyoming Act or the Colorado Act, as applicable, and the Indenture and will not adversely affect
the Tax-Exempt status of the Bonds.
Notice of Adjustment to or Continuation of Term Interest Rate Period. The Trustee shall give notice by
mail of an adjustment to or continuation of a Term Interest Rate Period to the Owners not less than 20 days
prior to the effective date of such Term Interest Rate Period. Such notice shall state (I) that the interest rate
on the Bonds will be adjusted to, or continue to be, a Term Interest Rate (subject to the Company s ability to
rescind its election as described below under
' -
Rescission of Election ), (2) the effective date and the last date
of such Term Interest Rate Period , (3) that the Term Interest Rate for such Term Interest Rate Period will be
determined not later than the effective date thereof, (4) how such Term Interest Rate may be obtained from the
Remarketing Agent, (5) the Interest Payment Dates after such effective date, (6) that during such Term Interest
Rate Period the holders of such Bonds will not have the right to tender their Bonds for purchase, (7) that
except when the new Term Interest Rate Period is preceded by a Term Interest Rate Period of the same
duration, such Bonds are subject to mandatory purchase on such effective date, and (8) the redemption
provisions that will apply to the Bonds during such Term Interest Rate Period.
Flexible Interest Rate Period
Determination of Flexible Segments and Flexible Interest Rates. During each Flexible Interest Rate
Period, each Bond shall bear interest during each Flexible Segment for such Bond at the Flexible Interest Rate
for such Bond. Each Flexible Segment for any Bond shall be a period ending on a day immediately preceding
a Business Day, of not less than one nor more than 365 days determined by the Remarketing Agent to be, in
its judgment, the period which, together with all other Flexible Segments for all Bonds of such Issue then
outstanding, is likely to result in the lowest overall net interest expense on such Bonds. Any Bond purchased
on behalf of the Company and remaining unsold by the Remarketing Agent as of the close of business on the
effec.tive date of the Flexible Segment for such Bond will have a Flexible Segment of one day or, if such
Flexible Segment would not end on a day immediately preceding a Business Day, a Flexible Segment of more
than one day ending on the day immediately preceding the next Business Day. No Flexible Segment shall
extend beyond the final maturity date of the Bonds.
The Flexible Interest Rate for each Flexible Segment for each Bond shall be the rate determined by the
Remarketing Agent (based on an examination of Tax-Exempt obligations comparable to the Bonds known by
the Remarketing Agent to have been priced or traded under then prevailing market conditions) no later than the
first day of such Flexible Segment (and in the case of a Flexible Segment of one day, no later than 12:30 p.
New York time. on such date) to be the lowest rate which would enable the Remarketing Agent to sell the
Bonds on the effective date of such rate at a price (without regard 10 accrued interest) equal to 100% of the
principal amount thereof. If a Flexible Segment or a Flc:xible Interest Rate for a Flexible Segment is not
determined or effective, the Flexible Segment for such Bond shall be a Flexible Segment of one day, and the
interest rate for such Flexible Segment of one day shall be 80 % of the most recent One-Year Note Index
theretofore published in The Bond Buyer (or, if The Bond Buyer is no longer published or no longer publishes
the One-Year Note Index, the one-year note index contained in the publication determined by the Remarketing
Agent as most comparable to The Bond Buver). In no event shall any Flexible Interest Rate exc-eed the lesserof ~~% per annum or the rate specified in any Standby Bond Purchase A,greement or Alternate Liquidity
Facility then in effect (initially 12 % per annum).
Adjustment to Flexible Interest Rate Period. The interest rate borne by Bonds of an Issue shall beadjusted to Flexible Imerest Rates upon receipt by the Issuer, the Trustee, the Paying Agent, the Remarketing
Agent and the Agent Bank or the Agent Obligor on an Alternate Liquidity Facility, as the case may be, of a
written notice from the Company. Such notice (I) shall specify the effective date of the Flexible Interest Rate
Period which shall be (A) a Business Day not earlier than the twentieth day following the third Business Day
after the date of receipt by the Trustee and Paying Agent of such notice (or such shoner period after the date
of such receipt as shall be acceptable to the Trustee) and (B) in the case of an adjustment from a Term Interest
Rate Period, a day on which the Bonds could be redeemed at the option of the Company or the day
immediately following the last day of the then"current Term Interest Rate Period; provided, however, that if
prior to the Company s making such election any Bonds have been .called for redemption and such redemption
shall not theretofore have been effected, the effective date of the Flexible Interest Rate Period shall not precede
such redemption date and (2) in the case of an adjustment from a Term Interest Rate Period having a duration
in excess of one year, shall be accompanied by an opinion of Bond Counsel to the effect that such adjustment
(A) is authorized or permitted by the Indenture and the Utah Act, the Wyoming Act or the Colorado Act, as
applicable, and (B) will not adversely affect the Tax-Exempt status of the interest on the Bonds. During each
Flexible Interest Rate Period commencing on the date so specified (provided that the opinion of Bond Counsel
described in clause (2) above, if required, is reaffirmed as of such date) and ending on the day immediately.
preceding the effective date of the next succeeding Rate Period, each Bond shall bear interest at a Flexible
Interest Rate during each Flexible Segment for such Bond.
Notice of Adjustment to Flexible Interest Rate Period. The Trustee shall give notice by mail of an
adjustment to a Flexible Interest Rate Period to the Owners not less than 20 days prior to the effective date of
such Flexible Interest Rate Period. Such notice shall state (1) that the interest.rate on the Bonds will be
adjusted to Flexible Interest'Rates (subject to the Company s ability to rescind its election as described below
under "Rescission of Election ). (2) the effective date of such Flexible Interest Rate Period, (3) that such
Bonds are subject to mandatory purchase on the effective date of such Flexible Interest Rate Period. (4)the
procedures for such mandatory purchase, and (5) that the Owners of such Bonds do not have the right to retain
their Bonds on such effective date.
Adjustment from Flexible Interest Rates. At any time during a Flexible Interest Rate Period, the interest
rate borne by Bonds of an Issue shall be adjusted from Flexible Interest Rates and the Bonds shall instead bear
interest as otherwise permitted in the Indenture, upon receipt by the Issuer, the Trustee, the Paying Agent and
the Remarketing Agent of written notice from the Company specifying the Rate Period to follow with respect
to such Bonds and instructing the Remarketing Agent to:
(1) determine Flexible Segments of such duration that, as soon as possible, all Flexible
Segments shall end on the same date, not earlier than the eleventh day following the third Business
Day (or such shoner period acceptable to the Trustee) following the receipt by the Trustee and
Paying Agent of notice from the Company, which date shall be the last day of the then-current
Flexible Interest Rate Period , and, upon the establishment of such Flexible Segments, the day next
succeeding the last day of all such Flexible Segments shall be the effective date of the Rate Periodelected by the Company; or
(2) determine Flexible Segments of such duration that will , in the judgment of the
Remarketing Agent, best promote an orderly transition to the next succeeding Rate Period beginning
not earlier than the eleventh day following the third Business Day (or such shorter period acceptable
to the Trustee) after the receipt by the Trustee and Paying Agent of such notice.
If the Company selects alternative (2) above, the day next succeeding the last day of the Flexible Segment for
each Bond of an Issue shall be with respect to such Bond the effective date of the Rate Period elected by the
Company. An adjustment from a Flexible Interest Rate Period described in this paragraph may result in some
of the Bonds of an Issue bearing interest at a Daily Interest Rate. Weekly Interest Rate or Term Interest Rate
while other Bonds of such Issue continue to bear interest at Flexible Interest Rates.
Determination Conclusive
The determination of the various interest rates referred to above shall be conclusive and binding upon the
Remarketing Agent, the Trustee, the Paying Agent, the Issuer, the Company and the Owners of the Bonds.
Rescission of Election
The Company may rescind any election by it to adjust to or, in the case of a Term Interest Rate Period
. continue a Rate Period prior to the effective date of such adjustment or continuation by giving written notice
of rescission to the Issuer, the Trustee, the Paying Agent and the Remarketing Agent prior to such -effective
date. At the time the Company gives notice of the rescission, it may also elect in such notice to continue the
Rate Period then in effect; provided, however, that if the Rate Period then in effect is a Term Interest Rate
Period, the subsequent Term Interest Rate Period shaH not be of a different duration than the Term Intet.est Rate
Period then in effect unless the Company provides to the Trustee an approving opinion of Bond Counsel prior
to the expiration of the then-current Term Interest Rate Period. If the Trustee receives notice of such rescission
prior to the time the Trustee has given notice to the Owners of the change in or continuation of Rate Periods.
then such notice of change in or continuation of Rate Periods shall be of no force and effect and shall not be
given to the Owners. If the Trustee receives notice of such rescission after the Trustee has given notice to the
Owners of an adjustment from other than a Term Interest Rate Period in excess of one year or an attempted
adjustment from one Rate Period (other than a Term Interest Rate Period in excess of one year) to another Rate
Period does not become effective for any other reason and if the Company does not elect to continue the Term
Interest Rate Period then in effect, then the Rate Period for the Bonds shall automatically adjust to or continue
in a Daily Interest Rate Period and the Trustee shall immediately give notice thereof to the Owners of the
Bonds. If the Trustee receives notice of such rescission after the Trustee has given notice to the Owners of
an adjustment from a Term Interest Rate Period in excess of one year to another Rate Period (including a Term
Interest Rate Period of a different duration), or if an attempted adjustment from a Term Interest Rate Period
in excess of one year to another Rate Period (including a Term Interest Rate Period of a different duration) does
not become effective for any reason and if the Company does not elect to continue the Term Interest Rate
Period then in effect, then the Rate Period for the Bonds shall continue to be a Term Interest Rate Period of
the same duration as the immediately preceding Term Interest Rate Period, subject to the second proviso
contained in the paragraph above under
" -
Term Interest Rate Period-Determination of Term Interest Rate
provided that if the Company delivers to the Trustee an approving opinion of Bond Counsel prior to the end
of the then effective Term Interest Rate Period, the Rate Period for the Bonds shaH be as directed by the
Company in writing. If a Daily Interest Rate for the first day of any Daily Interest Rate Period to which a Rate
Period is adjusted in accordance with this paragraph is not determined as described in "Daily Interest Rate
Period-Determination of Daily Interest Rate " the Daily Interest Rate for the first day of such Daily Interest
Rate Period shall be 80% of the most recent One-Year Note Index theretofore published in The Bond Buyer
(or, if The Bond Buyer is no longer published or no longer publishes the One-Year Note Index, the one-year
note index contained in the publication determineCl by the Remarketing Agent as most comparable to The Bond
Buyer). The Trustee shaH immediately give written notice of each such automatic adjustment to a Rate Period
as described in this paragraph to the Owners.
Notwithstanding the rescission by the Company of any notice to adjust or continue a Rate Period if notice
has been given to Owners of such adjustment or continuation, the Bonds shall be subject to mandatory purchaseas specified in such notice.
Optional Purchase
Daily Interest Rate Period. During any Daily Interest Rate Period, any Bond (or portions thereof in
Authorized Denominations) shall be purchased at the option of the owner thereof on any Business Day at a
purchase price equal to 100 % of the principal amount thereof plus accrued interest, if any, to the date of
purchase upon:
(a) delivery to the Trustee at the Delivery Office of the Trustee, not later than 11:00 a. m.
New York time, on such Business Day, of an irrevocable written or telephonic notice, which states
the principal amount and certificate number (if the Bonds are not then held in book-entry form) of
such Bond to be purchased and the date of such purchase; and
(b) except when the Bond is held in book-entry form, delivery of such Bond, accompanied
by an instrument of transfer (which may be the form printed on the Bond) executed in blank by its
Owner, with such signatUre guaranteed by a bank, trust company or member firm of the New York
Stock Exchange, Inc. to the Delivery Office of the Trustee at or prior to 1:00 p., New York
time, on such purchase date.
Weekly Interest Rate Period. During any Weekly Interest Rate Period, any Bond (or portions thereof in
Authorized Denominations) shall be purchased at the option of the owner thereof on any Wednesday, or if
such Wednesday is not a Business Day, the next succeeding Business Day at a purchase price equal to 100%
of the principal amount thereof plus accrued interest, if any, to the date of purchase upon:
(a) delivery to the Trustee at the Delivery Office of the Trustee of an irrevocable written
notice or telephonic notice (promptly confirmed in writing) by 5:00 p.m., New York time, on any
Business Day, which states the principal amount and certificate number (if the Bonds are not then
held in book-entry form) of such Bond to be purchased and the date on which such Bond is to be
purchased, which date shall not be prior to the seventh day next succeeding the date of the delivery
of such notice to the Trustee; and
(b) except when the Bond is held in book-entry form, delivery of such Bond, accompanied
by an instrument of transfer (which may be the form printed on the Bond) executed in blank by its
Owner, with such signature guaranteed by a bank, trust company or member firm of the New York
Stock Exchange, Inc. to the Delivery Office of the Trustee at or prior to 1:00 p., New York
time, on the purchase date specified in such notice.
Term Interest Rate Period. Any Bond (or portions thereof in Authorized Denominations) shall be
purchased at the option of the owner thereof oil the first day of any Term Interest Rate Period that follows a
Term Interest Rate Period of equal duration, at a purchase price equal to (I) if the Bond is purchased on or
prior to the Record Date, 100% of the principal amount thereof plus accrued interest from the Interest Payment
Date next preceding the date of purchase to the date of purchase (unless the date of purchase shall be an Interest
Payment Date in which case the purchase price shall be equal to the principal amount thereof) or ~2) if the Bond
is purchased after the Record Date, 100% of the principal amount thereof, upon:
(a) delivery to the Trustee at the Delivery Office of the Trustee on any Business Day not
less than 15 days before the purchase date of an irrevocable notice in writing by 5:00 p., New
York time, which states the principal amount and certificate number (if the Bonds are not then
held in book-entry form) of such Bond to be so tendered for purchase; and
(b) except when the Bond is held in book-entry form, delivery of such Bond , accompanied
by an instrument of transfer (which may be the form primed on the Bond) -executed in blank by its
Owner, with such signature guaranteed by a bank, trust company or member firm of the New York
Stock Exchange, Inc. to the Delivery Office of the Trustee at or prior to 1:00 p.m., New York
time, on the date of such purchase.
FOR SO LONG AS THE BONDS ARE HELD IN BOOK-ENTRY FORM, THE BENEFICIAL OWNER
OF THE BONDS THROUGH ITS DIRECT PARTICIPANT (AS HEREINAFTER DEFINED) SHALL GIVE
NOTICE TO THE TRUSTEE TO ELECT TO HAVE SUCH BONDS PURCHASED, AND SHALL EFFECT
DELIVERY OF SUCH BONDS BY CAUSING SUCH DIRECT PARTICIPANT TO TRANSFER ITS
INTEREST IN THE BONDS EQUAL TO SUCH BENEFICIAL OWNER'S INTEREST ON THE RECORDS
OF DTC TO THE TRUSTEE'S PARTICIPANT ACCOUNT WITH DTC. THE REQUIREMENT FOR
PHYSICAL DELIVERY OF THE BONDS IN CONNECTION WITH ANY PURCHASE PURSUANT TO
THE PROVISIONS DESCRIBED ABOVE SHALL BE DEEMED SATISFIED WHEN THE OWNERSHIP
RIGHTS IN THE BONDS ARE TRANSFERRED BY DTC PARTICIPANTS ON THE RECORDS OF DTC.
SEE" -Book-Entry System.
Mandatory Purchase
The Bonds are subject to lJIandatory purchase at a purchase price equal to 100% of the principal amount
thereof, plus accrued interest to the purchase date described below, upon the occurrence of any of the events
stated below:
(a) as to any Bond, on the effective date of any change in a Rate Period, other than the
effective date of a Term Interest Rate Period which was preceded by a Term Interest Rate Period
of the same duration;
(b) as to each Bond in a Flexible Interest Rate Period, on the day next succeeding the last
day of any Flexible Segment with respect to such Bond; or
(c) as to all Bonds of an Issue, on the Business Day preceding (I) the stated expiration date
of the Standby Bond Purchase Agreement or any Alternate Liquidity Facility, including any
extensions thereof, (2) the date on which an Alternate Liquidity Facility is substituted for the
Standby Bond Purchase Agreement or the Alternate Liquidity Facility then in effect, or (3) the date
on which the Company terminates the Standby Bond Purchase Agreement or the Alternate Liquidity
Facility then in effect, unless (A) the Company has delivered to the Trustee at least 20 days prior
written evidence from Moody s (if the Bonds are then rated by Moody s) and S&P (if the Bonds
are then rated by S&P). in each case to the effect that such rating agency has reviewed the proposed
Alternate Liquidity Facility or the proposed termination of the Standby Bond Purchase Agreementor Alternate Liquidity Facility then in effect, as the case may be, and that the delivery of the
proposed Alternate Liquidity Facility or the proposed termination of the Standby Bond Purchase
Agreement or Alternate Liquidity Facility then in effect, as the case may be, will not , by itself
result in a reduction, suspension or withdrawal of such rating agency s short-term rating or ratings
of the Bonds, and, if an Alternate Liquidity Facility is being provided, the Trustee received -delivery
of the proposed Alternate Liquidity Facility at least 20 days prior to the expiration or termination
of the Standby Bond Purchase Agreement or Alternate Liquidity Facility then in effect, or (B) the
Bank or the Obligor on an Alternate Liquidity Facility, as the case may be, has no obligation to
provide moneys on such Business Day to purchase Bonds under the terms of the Standby Bond
Purchase Agreement or the Alternate Liquidity Facility, as the 1:ase may be. See "The Standby
Bond Purchase Agreements-Extension, Reduction or Termination of the Standby Bond Purchase
Agreement; Alternate Liquidity Facility" below.
When Bonds are subject to redemption pursuant to paragraph (c) below under
" -
Optional Redemption
of Bonds," the Bonds are also subject to mandatory purchase on a day that the Bonds would be subjecuo
redemption, at a purchase price equal to 100% of the principal amount thereof plus an amount equal to any
premium which would have been payable on such redemption date had the Bonds been redeemed if the
Company gives notice to the Trustee on the day prior to the redemption date that it elects to have the Bonds
purchased in lieu of redemption. If the Bonds are purchased on or prior to the Record Date, the purchase price
shall include accrued interest from the Interest Payment Date next preceding the date of purchase to the date
of purchase (unless the date of purchase shall be an Interest Payment Date, in which .case the purchase price
shall be equal to the amount specified in the preceding sentence). If the Bonds are pur(:hased after the Record
Date, the purchase price shall not include accrued interest.
If the Bonds are subject to mandatory purchase in accordance with the provisions described in
subparagraph (c) of the second preceding paragraph , the Trustee shall give notice by mail to the Rcmarketing
Agent and the Owners of the Bonds of the stated expiration, substitUtion or termination of the Standby Bond
Purchase Agreement or any Alternate Liquidity Facility, not less than 15 days prior to such stated expiration, .
substitUtion or termination which notice shall (1) describe generally any Standby Bond Purchase Agreement or
any Alternate Liquidity Facility in effect prior to the stated expiration, substitution or termination and any
Substitute Standby Bond Purchase Agreement or Alternate Liquidity Facility to be in effect upon such stated
expiration, substitUtion or termination and state the name of the provider thereof; (2) state the date of such
stated expiration, substitution or termination; (3) state the rating or ratings. if any, which the Bonds are
expected to receive from any rating agency following such stated expiration, substitution or termination;
(4) state that the Bonds are subject to mandatory purchase; (5) state the purchase date; and (6) except when the
Bonds are held in book-entry form. state that the Bonds must be delivered to the New York office designated
by the Trustee as the "Delivery Office of the Trustee.
FOR SO LONG AS THE BONDS ARE HELD IN BOOK-ENTRY FORM , NOTICES OF
MANDATORY PURCHASE OF BONDS SHALL BE GIVEN BY THE TRUSTEE TO DTC ONLY, AND
NEITHER THE ISSUER, THE TRUSTEE, THE COMPANY, THE UNDERWRITER NOR THE
REMARKETING AGENT SHALL HAVE ANY RESPONSIBILITY FOR THE DELIVERY OF ANY SUCH
NOTICES BY DTC TO ANY DIRECT PARTICIPANTS OF DTC, BY ANY DIRECT PARTICIPANTS TO
ANY INDIRECT PARTICIPANTS OF DTC OR BY ANY DIRECT PARTICIPANTS OR INDIRECT
PARTICIPANTS TO BENEFICIAL OWNERS OF THE BONDS. FOR SO LONG AS THE BONDS ARE
HELD IN BOOK-ENTRY FORM, THE REQUIREMENT FOR PHYSICAL DELIVERY OF THE BONDS
IN CONNECTION WITH ANY PURCHASE PURSUANT TO THE PROVISIONS DESCRIBED ABOVE
SHALL BE DEEMED SATISFIED WHEN THE OWNERSHIP RIGHTS IN THE BONDS ARE
TRANSFERRED BY DIRECT PARTICIPANTS ON THE RECORDS OF DTC. SEE "Book-Entry
System. "
Purchase of Bonds
On the date on which Bonds are delivered to the Trustee for purchase as specified above under
.. -
Optional Purchase" or "Mandatory Purchase " the Trustee shall pay the purchase price of such Bonds
solely from the following sources in the order of priority indicated, and the Trustee has no obligation to use
funds from any other source:
(a) Available Moneys (as hereinafter defined) furnished by the Company to the Trustee for the
purchase of Bonds;
(b) proceeds of the sale of such Bonds (other than Bonds sold to the Company, any subsidiary of
the Company, the Issuer or any "insider" (as defined in the United States Bankruptcy Code) of any of the
aforementioned) by the Remarketing Agent;
(c) Available Moneys or moneys provided pursuant to the Standby Bond Purchase Agreement or
an Alternate Liquidity Facility, as the case may be, for the payment of the purchase price of the Bonds
rnished by the Trustee pursuant to the Indenture for the purchase of Bonds deemed paid in accordance
wllh the defeasance provisions of the Indenture;
(d) moneys furnished pursuant to the Standby Bond Purchase Agreement or an Alternate Liquidity
Facility, as the case may be, to the Trustee for the payment of the purchase price of the Bonds; and
(e)any other moneys furnished by the Company to the Trustee for purchase of the Bonds;
provided, however, that funds for the payment of the purchase price of defeased Bonds shall be derived only
from the sources described in (b) and (c) above, in such order of priority.
Available Moneys" means (a)as used above under
" -
Purchase of Bonds " and below
subparagraph (b) of the first paragraph under "The IndentUres-Defeasance " (i) during such time as a Standby
Bond Purchase Agreement or an Alternate Liquidity Facility is in effect and subject to the condition that if, in
the written opinion of nationally recognized counsel experienced in bankruptcy matters and acceptable to
Moody s (if the Bonds are then rated by Moody s) and the Trustee (which opinion shall be delivered to the
Trustee at or prior to the time of the deposit of such moneys with the Trustee), the deposit and use of such
moneys will not constitute a voidable preference under Section 547 of the United States Bankruptcy Code in
the event the Issuer or the Company were to become debtors under the United States Bankruptcy Code (the
Preference Opinion Condition ), (A) moneys on deposit in trust with the Trustee for a period of at least 123
days prior to and during which no petition in bankruptcy or similar insolvency proceeding has been filed by
or against the Company or the Issuer or is pending (unless such petition shall have been dismissed and such
dismissal shall be final and not subject to appeal), (B) proceeds of the issuance of refunding bonds (including
proceeds from the investment thereot), and (C) any other moneys, and (ii) at any time that a Standby Bond
Purchase Agreement or an Alternate Liquidity Facility is not in effect, any moneys on deposit with the Trustee
and proceeds from the investment thereof and (b) as used below under "Procedure for and Notice
Redemption" and in subparagraph (c) of the first paragraph and clause (a) of the fifth paragraph under "The
Indentures-Defeasance " (i) during such time as an Insurance Policy is in effect, and. subject to the Preference
Opinion Condition, moneys described in clauses (A), (B) and (C) of this paragraph and (ii) at any time that an
Insurance Policy is not in effect , any moneys on deposit with the Trustee and proceeds from' the investmentthereof.
Remarketing of Bonds
The Remarketing Agent shall offer for sale and use its best efforts to remarket any Bond subject to
purchase pursuant to the optional or mandatory purchase provisions described above, any such remarketing
to be made at a price equal to 100% of the principal amount thereof plus accrued interest, if any, to the
purchase date. The Company may direct the Remarketing Agent from time to time to cease and to resume sales
efforts with respect to some or all of the Bonds.
Anything in the Indenture to the contrary notwithstanding, at any time dUl;ing which the Standby Bond
Purchase Agreement or an Alternate Liquidity Facility, as the case may be, is in effect, there shall be no sales
of Bonds as described in the preceding paragraph, if (A) there shall have occurred and not have been cured or
waived an Event of Default described in paragraphs (a), (b) or (c) under the caption "The Indentures-Defaults
of which the Remarketing Agent and the Trustee have actual knowledge or (B) the Bonds have been declared
to be immediately due and payable as described under the caption "The Indentures-Remedies" and such
declaration has not been rescinded pursuant to the Indenture.
Optional Redemption of Bonds
Bonds of any Issue may be redeemed at the option of the Company, in whole. or in part by lot, prior totheir maturity date as follows:
(a) On any Business Day during a Daily Interest Rate Period or Weekly Interest Rate Period, the
Bonds of an Issue may be redeemed at a redemption price equal to 100% of the principal amount thereof plus
accrued interest, if any, to the date of redemption.
(b) During any Flexible Interest Rate Period, each Bond may be redeemed on the day next
succeeding the last day of each Flexible Segment for such Bond at a redemption price equal to 100% of its
principal amount.
(c) During any Term Interest Rate Period and on the day next succeeding the last day of each
Term Interest Rate Period , the Bonds of an Issue may be redeemed during the periods specified below, in
whole or in part at any time, at the redemption prices set forth below plus accrued interest, if any, to the
redemption date:
Length of Term
Interest Rate Period Redemption Dates and Prices
At any time on or after the 10th anniversary of the effective date
of the Term Interest Rate Period at 102 % declining 1 % annually
to 100%
Greater than 13 years
Greater than 10 and less
than or equal to 13 years
At any time on or after the 5th anniversary of the effective date
of the Term Interest Rate Period at 102 % declining I % annually
to 100%
Greater than 7 and less
than or equal to 10 years
At any time on or after the 3rd anniversary of the effective date
of the Term Interest Rate Period at 102 % declining 1 % annually
to 100%
Greater than 4 and less
than or equal to 7 years
At any time on or after the 2nd anniversary of the effective date
of the Term Interest Rate Period at 101 % declining 1/2% annually
to 100%
Greater than 2 and less
than or equal to 4 years
At any time on or after the 2nd anniversary of the effective date
of the Term Interest Rate Period at WI % declining 1/2% each
six months thereafter to 100%
Greater than I and less
than or equal to 2 years
At any time on or after the 1st anniversary of the effective date
of the Term Interest Rate Period at 100-112% declining 1/2%
six months thereafter to 100%
Less than or equal to I year Not redeemable
With respect to any Term Interest Rate Period, the Company may specify in the notice described above
in the third paragraph under "Term Interest Rate Period"'-Adjustmem to or Continuation of Term Interest
Rate Period" redemption provisions, prices and periods other than those set forth above; provided, however,
that such notice shall be accompanied by an opinion of Bond Counsel to the effect that such changes areauthorized or permitted by the Utah Act, the Wyoming Act or the Colorado Act, as applicable, and the
Indenture and will not adversely affect the Tax-Exempt status of the Bonds.
Extraordinary Optional Redemption of Bonds
At any time, the Bonds of an Issue shall be subject to redemption at the option of the Company in whole
or in part (and if in part, by lot), at a redemption price equal to 100% of the principal amount thereof plus
accrued interest to the redemption date, upon receipt by the Trustee of a written notice from the Company
stating that any of the following events has occurred and that the Company therefore intends to exercise its
option to prepay the payments due under the Loan Agreement in whole or in part and thereby effect theredemption of the Bonds of an Issue in whole or in part to the extent of such prepayments:
(i) the Company shall have determined that the continued operation of the Plant is impracticable
uneconomical or undesirable for any reason; or
(ii) the Company shall have determined that the continued operation of the Project is impracticable
uneconomical or undesirable due to (A) the imposition of taxes, other than ad valorem taxes currently
levied upon privately owned property used for the same general purpose as the Project, or other liabilities
or burdens with respect to the Project or the operation thereof, (B)changes in technology, in
environmental standards or legal requirements or in the economic availability of materials, supplies
equipment or labor or (C) destruction of or damage to all or part of the Project; or
(iii) all or substantially all of the Project or the Plant shall have been condemned or taken by
eminent domain; or
(iv) the operation of the Project or the Plant shall have been enjoined or shall have otherwise been
prohibited by, or shall conflict with, any order, decree, rule or regulation of any court or of any federal
state or local regulatory body, administrative agency or other governmental body.
Special Mandatory Redemption of Bonds
The Bonds are subject to mandatory redemption at 100% of the principal amount thereof plus accrued
interest, if any, to the date of redemption upon the occurrence of the following events.
The Bonds shall be redeemed in whole within 180 days following a "Determination of Taxability" as
defined below; provided that, if in the opinion of Bond Counsel delivered to the Trustee, the redemption of a
specified portion of the Bonds outstanding would have the result that interest payable on the Bonds remaining
oUtstanding after such redemption would remain Tax-Exempt, then the Bonds shall be redeemed in part by lot
(in Authorized Denominations) in such amount as Bond Counsel in such opinion shall have determined is
necessary to accomplish that result. A "Determination of Taxability" shall be deemed to have occurred if, as
a result of an Event of Taxability (as defined below), a final decree or judgment of any federal court or a final
action of the Internal Revenue Service determines that interest paid or payable on any Bond is or was includible
in the gross income of an owner of the Bonds for federal income tax purposes under the Code (other than an
owner who is a "substantial user" or "related person" within the meaning of Section 1O3(b)(l3) of the 1954
Code). However, no such decree or action will be considered final for this purpose unless the Company has
been given written notice and, if it is so desired and is legally allowed, has been afforded the opportunity to
contest the same, either directly or in the name of any owner of a Bond, and until conclusion of any appellate
review. if sought. If the Trustee receives written notice from any owner stating (i) that the owner has been
notified in writing by the Internal Revenue Service that it proposes to include the interest on any Bond in the
gross income of such owner , for the reasons described therein or any other proceeding has been instituted
against such owner which may lead to a final decree or action as described in the Loan Agreement. and (ii) that
such owner will afford the Company the opportunity to contest the same, either directly or in the name of the
owner, until a conclusion of any appellate review, if sought, then the Trustee shall promptly give notice thereof
to the Company, the Insurer, the Agent Bank (or the Agent Obligor on an Alternate Credit Facility, as the case
may be), the Issuer and the owner of each Bond then oUtstanding. If a final decree or action as described above
thereafter occurs and the Trustee has received written notice thereof at least 45 days prior to the redemption
date, the Trustee shall make the required demand for prepayment of the amounts payable under the Loan
Agreement for prepayment of the Bonds and give notice of the redemption of the Bonds at the earliest practical
date, bUt not later than the date specified in the Loan Agreement, and in the manner provided by the Indenture.
An "Event of Taxability" means the failure of the Company to observe any covenant, agreement or
representation in the Loan Agreements, which failure results in a Determination of Taxability.
Bonds purchased with moneys provided pursuant to the Standby Bond Purchase Agreement or Alternate
Liquidity Facility, as the case may be, and which have not been released by the Bank (or the Obligor on an
Alternate Liquidity Facility, as the case may be) for remarketing ("Unremarketed Bonds ) are subject to
mandatory redemption in certain events. If the Trustee receives notice from the Bank or the Obligor on an
Alternate Liquidity Facility (the "Notifying Party ) that an Insurer Default (as defined below) has occurred, all
Unremarketed Bonds shall be redeemed at a redemption price equal to 100% of the principal amount of such
Unremarketed Bonds plus accrued and unpaid interest thereon to the redemption date on the date falling 90 days
after the date the Trustee receives such notice of an Insurer Default; provided, however. that such
Unremarketed Bonds shall not be so redeemed if the Trustee shall have received notice prior to such redemption
date from the Notifying Party that (i) such Insurer Default has been waived by the Notifying Party or (ii) such
Insurer Default has been cured or (iii) the Insurer has been replaced or an additional Insurer has been provided
under the circumstances described below under "The Indentures-Modifications and Amendments." The
Trustee shall promptly provide a copy of any such notice received to the Owners of the Bonds and to theRemarketing Agent.
Insurer Default" means any of the following events:
(a) the failure of the Insurer to make any payment required under the Insurance Policy when the
same shall become due and payable or the Insurance Policy shall for any reason cease to be in full force and
effect;
(b) a decree or order for relief shall be entered by a court or insurance regulatory authority having
jurisdiction over the Insurer in an involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator, custodian , trustee, sequestrator (or similar
official) of the Insurer or for any substantial part of the property of the Insurer or ordering the winding-up or
liquidation of the affairs of the Insurer, and the continuance of any such decree or order shall be unstayed and
remain in effect for a period of 60 consecutive days thereafter; or
(c) the Insurer shall commence a voluntary case under any applicable federal or sta~ bankruptcy,
insolvency or other similar law now or hereafter in effect, or it shall consent to or acquiesce in the entry of
an order for relief in an involuntary case under any such law, or it shall consent to the appointment of or taking
of possession by a receiver, liquidator, trustee, custodian. sequestrator (or similar official) of the Insurer or for
any substantial part of the property of it, or it shall make a general assignment for the benefit of creditors
or the Insurer shall fail generally or admit in writing its inability to pay its debts as such debts become due
or the Insurer shall take corporate action in comemplation or furtherance of any of the foregoing.
Procedure for and Notice of Redemption
If less than all of the Bonds of an Issue are called for redemption , the particular Bonds or portions thereof
to be redeemed shall be selected by the Trustee, by lot. In selecting Bonds for redemption, the Trustee shall
treat each Bond as representing that number of Bonds which is obtained by dividing the principal amount of
each Bond by the minimum Authorized Denomination. Any Bonds selected for redemption which are deemed
to be paid in accordance with the provisions of the Indenture will cease to bear interest on the date fixed for
redemption. Subject to the procedures described below under "Book-Entry System" fur Bonds held in book-
entry form, upon presentation and surrender of such Bonds at the place or places of payment, such Bonds shall
be paid and redeemed. Notice of redemption shall be given by mail as provided in the Indemure, at least 30
days and not more than 60 days prior to the redemption date, provided that the failure to duly give notice by
mailing to any Owner, or any defect therein, shall not affect the validity of any proceedings for the redemption
of any other of the Bonds. Such notice will also be sent to the Remarketing A,gent, the Insurer, the Agent Bank
or the Agent Obligor on an Alternative Liquidity Facility, as the case may be, the Company Mortgage Trustee
Moody , S&P, securities depositories and bond information services.
With respect to notice of any optional redemption of the Bonds, as described above, unless upon the
giving of such notice, such Bonds shall be deemed to have been paid within the meaning of the Indenture, such
notice shall state that such redemption shall be conditional upon the receipt by the Trustee, on or prior to the
date fixed for such redemption, of Available Moneys suffldent to pay the principal of, premium, if any. and
interest on such Bonds to be redeemed. If such Available Moneys are not so received , the redemption shall
nO! be made and the Trustee shall give notice, in the manner in which the notice of redemption was given. that
such redemption will not take place.
Book-Entry System
The following information in this section concerning DTC and DTC's book-emry system has been obtained
from sources (including DTC) that the Company believes to be reliable. but none of the Company. the Issuer
or the Underwriter take any responsibility for the accuracy of such information.
The Depository Trust Company ("DTC"), New York , New York, will act as securities depository forthe Bonds. The Bonds will be issued as fully-registered bonds registered in the name of Cede & Co., as
nominee for DTC. One fully-registered Bond certificate will be issued for the Bonds of each Issue, in the
aggregate principal amount thereof, and will be deposited with DTc. The Bonds will initially be available for
purchase in book-entry form only.
DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System,
a "clearing corporation " within the meaning of the New York Uniform Commercial Code, and a "clearing
agency " registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as
amended. DTC holds securities that its participants ("Participants ) deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities
through electronic compUterized book-entry changes in Participants' accounts , thereby eliminating the need for
physical movement of securities certificates. Direct Participants (the "Direct Participants ) include securities
brokers and dealers, banks , trust companies, clearing -corporations, and certain other organizations. DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., 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 through or
maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants
The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will
receive a credit for the Bonds on DTC's records. The ownership interest of each Benefidal 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 purchase , but Beneficial Owners are expected to receive written 'Confirmations
providing details of the transaction, as well as periodic statements of their holdings. from the Direct or Indir~t
Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests
in the Bonds 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 Bonds, except
in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in the name
of DTC's partnership nominee, Cede & Co. The deposit of Bonds 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 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such
Bonds are credited, which mayor may not be the Beneficial Owners. The Participants will remain responsible
for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants
to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect
from time to time.
As long as the book-entry system is used for the Bonds, redemption notices shall be sent to Cede & Co.
If less than all of the Bonds of any Issue are being redeemed, DTC's practice is to determine by lot the amount
of the interest of each Direct Participant in such Issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds. Under its usual procedures
DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.s consenting or voting rights to those Direct Participants to whose accounts the Bonds are
credited on the record date (identified in a listing attached to the Omnibus Proxy).
As long as the book-entry system is used for the Bonds, principal or purchase price of and premium, if
any, and interest payments on, the Bonds will be made to DTC. DTC's practice is to credit Direct Participants
accounts on the applicable payment date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payment on such date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary practices. as is the case with
securities held for the accounts of customers in bearer form or registered in "street name " and will be the
responsibility of such Participant and not of DTC, the Company, the Paying Agent, the Trustee, the
Underwriter, the Remarketing Agent or the Issuer, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of principal, purchase price, premium and interest with respect to the
Bonds to DTC is the responsibility of the Issuer or the Paying Agent, disbursement of such payments to Direct
Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners
shall be the responsibility of Direct and Indirect Participants.
A Beneficial Owner, through a Direct Participant acting on behalf of such Beneficial Owner or an Indirect
Participant acting on behalf of such Beneficial Owner, shall give notice to the Trustee of its -election to have
Bonds tendered for purchase, and shaH effect delivery of such Bonds by causing the Direct Participant to
transfer on DTC's records the Direct Participant"s interest in the Bonds to the Trustee. The requirement for
physical delivery of Bonds in connection with an optional or mandatory purchase will be deemed satisfied when
the ownership rights in such Bonds are transferred by Direct Participants to the account of the Trustee on
DTC's records.
DTC may discontinue providing its services as securities depository with respect to the Bonds at any
time by giving reasonable notice to the Issuer or the Trustee. Under such circumstances, in the event that a
successor securities depository is not obtained, Bond certificates are required to be printed and delivered. The
Company may decide to discontinue use of the system of book-entry transfers through DTC (or a successor
securities depository). In that event , Bond certificates will be printed and delivered.
None of the Issuer, the Company, the Underwriter, the Remarketing Agent, the Trustee nor the Paying
Agent will have any responsibility or obli,gation to any securities depository, any Participants in the Book-Entry
System or the Beneficial Owners with respect to (i) the accuracy of any records maintained by the securities
depository or any Participant; (ii) the payment by the securities depository or by any Participant of any amount
due to any Beneficial Owner in respect of the principal amount or redemption of, or interest on, any Bonds;
(iii) the delivery of any notice by the securities depository or any Participant; ,(iv) the selection of the Beneficial
Owners to receive payment in the event of any partial redemption of the Bonds; or (v) any other action taken
by the securities depository or any Participant.
, --'-. - .... - -- -"-~
BOND INSURANCE
The following information has been furnished by the Insurer for use in the Official Statement.
Concurrelllly with the issuance of the Bonds, the Insurer will issue an Insurance Policy with respect to the
Rnnds of each Issue. Each Insurance Policy will operate independently. The Insurance Policies contain
identical terms, which are summarized below. Reference is made 10 Appendix B for a specimen Insurance
Policy.
Payment Pursuant to Insurance Policy
The Insurer has made a commitment to issue an Insurance Policy relating to the Bonds of each Issue
effective as of the date of issuance of the Bonds. Under the terms of the Insurance Policy. the Insurer wiII
pay to the United States Trust Company of New York, in New York, New York or any successor thereto (the
Insurance Trustee ) that portion of the principal of and interest on the Bonds which shall become Due for
Payment but shall be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the Insurance
Policy). The Insurer will make such payments to the Insurance Trustee on the later of the date on which such
principal and interest becomes Due for Payment or within one business day following the date on which the
Insurer shall have received notice of Nonpayment , as defined in the Insurance Policy, from the Trustee or any
Paying Agent under the Indenture. The insurance will extend for the term of the Bonds and, once issued
cannot be canceled by the Insurer. As used above, (i) "Due for Payment " when referring to the principal of
the Bonds, is when the stated maturity date has been reached and does not refer to any earlier date on which
payment is due by reason of call for redemption (except upon a mandatory redemption as a result of a
Determination of Taxability or certain mandatory redemptions of Unremarketed Bonds held by the Bank. as
described above under "The Bonds-Special Mandatory Redemption of Bonds ), acceleration or other
advancement of maturity and, when referring to interest on the Bonds, is when the stated date for payment of
interest has been reached and (ii) "Nonpayment " means the failure of the Issuer to have provided sufficient
funds to the Trustee or any Paying Agent under the Indenture for payment in full of all principal and intereston the Bonds which are Due for Payment.
The Insurance Policy wiII insure payment only on stated maturity dates or upon a mandatory redemption
as a result of a Determination of Taxability or certain mandatory redemptions of Unremarketed Bonds held
by the Bank as. described above under "The Bonds-Special Mandatory Redemption of Bonds," in the case of
principal, and on stated dates for payment, in the case of interest: If the Bonds become subject to mandatory
redemption and insufficient funds are available for redemption of all outstanding Bonds, the Insurer will remain
obligated to pay principal of and interest on outstanding Bonds on the originally scheduled interest and principal
payment dates. In the event of any acceleration of the principal of the Bonds, the insured payments will be
made at such times and in such amounts as would have been made had there not been an acceleration.
In the event the Trustee or any Paying Agent under the Indenture has notice that any payment of principal
of or interest on a Bond which has become Due for Payment . as defined in the Insurance Policy, and which
is made to a Bondholder by or on behalf of the Issuer has been deemed a preferential transfer and theretofore
recovered from its registered owner pursuant to the United States Bankruptcy Code in accordance with a final
nonappealable order of a court of competent jurisdiction, such registered owner wiII be entitled to payment from
the Insurer to the extent of such recovery if sufficient funds are not otherwise available.
The Insurance Policy does not insure any risk other than Nonpayment, as defined in the Insurance Policy.
Specifically, the Insurance Policy does not cover:
payment on acceleration, as a result of a call for redemption or as a result of any other advancement
of maturity (except upon a mandatory redemption as a result of a Determination of Taxability or
certain mandatory redemptions of Unremarketed Bonds held by the Bank, as described above under
The Bonds-Special Mandatory Redemption of Bonds
payment of any redemption, prepayment or acceleration premium;
nonpayment of principal or interest caused by the insolvency or negligence of any Trustee or Paying
Agent. if any; and
payments of the purchase price of Bonds upon tender by an owner thereof or any preferential
transfer relating to payments of the purchase price of Bonds upon tender by an Owner thereof.
Unless the Bonds are held in book-entry form, if it becomes necessary to call upon the Insurance Policy,
payment of principal requires surrender of Bonds to the Insurance Trustee together with an appropriateinstrument of assignment so as to permit ownership of such Bonds to be registered in the name of the Insurer
to the extent of the payment under the Insurance Policy. Payment of interest pursuant to the Insurance Policy
requires proof of Bondholder entitlement to interest payments and an appropriate assignment of the
Bondholder s right to payment to the Insurer. If the Bonds are held in book-entry form, in lieu of surrendering
the Bonds to receive payment of principal or interest , the interest of Beneficial Owners shalI be transferred on
the records of DTC to the Insurance Trustee.
Upon payment of the insurance benefits,. the Insurer will become the owner of the Bond, if any, or right
to payment of principal or interest on such Bond and will be fulIy subrogated to the surrendering Bondholderrights to payment.
The Insurer is subject to replacement in certain events as described under "The Indentures-Modifications
and Amendments " and "Amendment of the Loan Agreements.
The Bond Insurer
The Insurer is a Wisconsin-domiciled stock insurance corporation regulated by the Office of the
Commissioner of Insurance of the State of Wisconsin, and licensed to do business in 50 states, the District of
Columbia. and the Commonwealth of Puerto Rico, with admitted assets of approximately $2.060 000,000
(unaudited) and statutory capital of approximately $1,178,000 000 (unaudited) as of June 30, 1994. Statutory
capital consists of the Insurer s policyholders ' surplus and statutory contingency reserve. The Insurer is a
wholIy owned subsidiary of AMBAC Inc.. a 100% publicly-held company. S&P, Moody s and Fitch Investors
Service, Inc. have each assigned a triple-A claims-paying ability rating to the Insurer.
Copies of the Insurer s financial statements prepared in accordance with statutory accounting standards
are available from the Insurer. The address of the Insurer s administrative offices and its telephone number
are One State Street Plaza. 17th Floor, New York , New York 10004 and [phone].
The Insurer has entered into pro rata reinsurance agreements under which a percentage of the insurance
underwritten pursuant to certain municipal bond insurance programs of the Insurer has been and will be
assumed by a number of foreign and domestic unaffiliated reinsurers.
The Insurer has obtained a ruling from the Internal Revenue Service to the effect that the insuring of an
obligation by the Insurer will not affect the treatment for federal income tax purposes of interest on such
obligations and that insurance proceeds representing maturing interest paid by the Insurer under policy
provisions substantially identical to those contained in its municipal bond insurance policyshalI be treated for
federal income tax purposes in the same manner as if such payments were made by the issuer of such
obligations.
The Insurer makes no representation regarding the Bonds or the advisability of investing in the Bonds and
makes no representation regarding; nor has it participated in the preparation of, the Official Statement other
than the information supplied by the Insurer and presented under the heading
" -
Bond Insurance. "
THE STANDBY BOND PURCHASE AGREEMENTS
Each Standby Bond Purchase Agreement will operate independently. A default under.(J Standby Bond
Purchase Agreement with respect to the Bonds of one Issue will not, in and of itself, constitute a default under
a Standby Bond Purchase Agreement with respect to the Bonds of any other Issue; however, the same
occurrence may constitllte a default under the Standby Bond Purchase Agreement with respect to Bonds of more
than one issue. The Standby Bond Purchase Agreements contain substantially identical terms, and the following
is a summary, of certain provisions common to the Standby Bond Purchase Agreements. All references in this
summary to the Issuer, the Trustee, the Agent Bank, the Bank, the Remarketing Agent, the Standby Bond
Purchase Agreement, the Indenture, the Loan Agreement, the Bonds and other documents and parties shall be
deemed to refer 10 the Issuer, the Trustee, the Agent Bank, the Bank or Banks, the Remarketing Agent, the
Standby Bond Purchase Agreement. the Indenture, the Bonds and such other documents and parties
respectively, relating to each Issue of the Bonds.
Purchases of Bonds in the event and to the extent that such Bonds are not remarketed by the Remarketing
Agent or redeemed or purchased by the Company will be funded under the Standby Bond Purchase Agreement.
References herein to the "Bank" or "Banks" include their respective successors.
The obligation of the Bank to purchase Bonds will expire at the close of business on November 17
1999, unless extended or earlier terminated as described herein. The terms of the Standby Bond Purchase
Agreement will permit the Trustee, in accordance with the terms thereof, to notify the Bank of the aggregate
principal amount of the Bonds to be purchased by the Bank up to the ag,gregate principal amount of the Bonds
-, - --_., - - --""--
r-=--
....---:'
of such Issue (this amount will be reduced as Bonds are paid or redeemed as described below) plus accrued
interest thereon (up to a maximum of 62 days' interest on the principal sum set forth above) at an assumed
annual interest rate of 12 % to enable the Trustee to pay the purchase price of Bonds delivered to it for purchase
and not remarketed and not redeemed or purchased by the Company.
THE STANDBY BOND PURCHASE AGREEMENT IS TO FUND PURCHASES OF BONDS WHICH
ARE TENDERED BUT NOT REMARKETED BY THE REMARKETING AGENT AND DOES NOT
PROVIDE SECURITY FOR THE PAYMENT OF PRINCIPAL OF AND PREMIUM, IF ANY, AND
INTEREST ON THE BONDS AS THE SAME BECOME DUE AND PAYABLE. UNDER CERTAIN
CIRCUMST ANCES DESCRIBED HEREIN, PURCHASES WILL NOT BE MADE UNDER THE STANDBY
BOND PURCHASE AGREEMENT AND, THEREFORE FUNDS MAY NOT BE A V AILABLE TO
PURCHASE TENDERED BONDS. IF A BANK ASSIGNS A PORTION OF ITS COMMITMENT UNDER
THE STANDBY BOND PURCHASE AGREEMENT TO ONE OR MORE OTHER BANKS, THE
OBLIGA TIONS OF THE BANKS (INCLUDING ANY ASSIGNEE BANK) TO PURCHASE BONDS UNDER
THE STANDBY BOND PURCHASE AGREEMENT WILL BE SEVERAL AND NOT JOINT.
THEREFORE, IF ONE BANK FAILS TO FUND ITS PORTION OF THE COMMITMENT, THE OTHER
BANKS PARTY TO THE STANDBY BOND PURCHASE AGREEMENT WILL HAVE NO OBLIGATION
WITH RESPECT TO THAT PORTION OF THE COMMITMENT.
Conditions Precedent to Purchases of Bonds Under the Standby Bond Purchase Agreement
The obligation of the Bank to purchase Bonds which are tendered for purchase as described above under
The Bonds-Optional Purchase " and "Mandatory Purchase" but not resold by the Remarketing Agent under
the Standby Bond Purchase Agreement will be subject to satisfaction of each of the following conditionsprecedent:
(a) The Bank shall have received from the Trustee the notices specified in the Standby Bond
Purchase Agreement relating to the aggregate principal amount of unremarketed Bonds, plus accrued interest
thereon, to be purchased by the Bank, which amount shall not exceed the amount of the Bank's commitment.
(b)
(c)
No Event of Termination (as defined below) shall have occurred and be continuing.
The Bank's commitment shall not have been terminated as described below.
The Bank will have no obligation to purchase unremarketed Bonds held by or for the account of the
Company, any affiliate of the Company or any broker-dealer holding Bonds pursuant to an arrangement with
the Company.
Events of Default
Each of the following "Events of Default" under the Standby Bond Purchase Agreement' is referred to in
this Official Statement as an "Event of Termination
(a) The ratings assigned to the Insurer s long-term debt or claims paying ability are withdrawn
or are reduced below BBB- (or its equivalent rating) by S&P and are withdrawn or reduced to Baa3 (or its
equivalent rating) or below by Moody s; or
(b) A "Bond Insurer Event of Insolvency," as defined in the Standby Bond Purchase Agreement
shall have occurred; or
(c) The Insurer shall fail , wholly or partially, to make a payment of principal or interest to the
Trustee as required under the Insurance Policy; or
(d) The Insurer shall claim or assert that the Insurance Policy is invalid or unenforceable against
the Insurer or shall repudiate its obligations or deny that it has any further liability under the Insurance Policy
or the validity or enforceability of the Insurance Policy shall be contested directly or indirectly by the Insurer
or any governmental authority and , in the case of a contest by any governmental authority, the Insurer shall
fail to defend or to assert such validity or enforceability; or
(e) Any governmental authority with competent jurisdiction shall announce, find or rule that the
Insurance Policy is null and void or otherwise invalid or unenforceable against the Insurer; or
(f) The Insurance Policy is surrendered, cancelled or terminated , or amended or modified in any
material respect, without the Bank's prior written consent; or
(g) A court of competent jurisdiction enters a final nonappealable jud,gment that the Insurance
Policy is not valid and binding on or enforceable against the Insurer.
Consequences of Event of Termination
(a) In the case of an Event of T~rmination as specified in subparagraphs (d) or (e) above under
Events of Default " the Bank's obligation to purchase unremarketed Bonds under the Standby Bond Purchase
Agreement shall be immediately suspended (but not terminated) without notice or demand and thereafter the
Bank shall be under no obligation to purchase any unremarketed Bonds until the Bank's commitment under the
Standby Bond Purchase Agreement is reinstated as described below. Promptly upon obtaining knowledge of
such an Event of Termination, the Agent Bank shall notify the Trustee and the Remarketing Agent of such
suspension in writing; provided , however, that the Agent Bank shall incur no liability or responsibilitywhatsoever by reason of its failure to give such notice and such failure shall in no way affect the suspension
of the Bank's commitment and of its obligation to purchase unremarketed Bonds pursuant to the Standby Bond
Purchase Agreement. If a court of competent jurisdiction shall thereafter enter a final, nonappealable judgmentthat such Insurance Policy is not valid and, binding on the Insurer, then the commitment and the obligation of
the Bank to purchase unremarketed Bonds shall immediately terminate without notice or demand and thereafter
the Bank shall be under no obligation to purchase Bonds. If a -court with jurisdiction to rule on the validity of
the Insurance Policy shall find or rule that such Insurance Policy is valid and binding on the Insurer, then thecommitment and the obligations of the Bank under the Standby Bond Purchase Agreement shall thereupon be
reinstated (unless the commitmem period shall otherwise have expired or the commitment shall otherwise have
been terminated as provided in the Standby Bond Purchase Agreement). Notwithstanding the foregoing. if three
years after the effective date of suspension of the Bank's obligations, the Standby Bond Purchase Agreementhas not been terminated and litigation is still pending and a judgment regarding the validity of the Insurance
Policy has not been obtained, then the commitment and the obligation of the Bank to purchase unremarketed
Bonds shall at such time terminate without notice or demand and thereafter, the Bank shall be under no
obligation to purchase unremarketed Bonds.
(b) In the event of the commencement of an involuntary case or other proceeding against the
Insurer seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law, or seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, the obligation of the Bank to purchase unremarketed
Bonds shall immediately be suspended without notice or demand and shall be terminated if such proceeding
remains undismissed for a period of 60 days; provided, however, that if such an event shall have occurred and
is continuing on a date that would otherwise be the stated expiration date of the Standby Bond Purchase
Agreement , the stated expiration date shall be extended to the date which is 20 days following the date on which
such event is cured or waived by the Bank and the Agent Bank shall provide the Trustee with at least 15 days
prior notice of the date to which the stated expiration date is so extended. If such proceeding is dismissed or
stayed within such 60-day period, the Bank's commitment shall be reinstated.
(c) In the case of an Event of Termination as specified in subparagraph (a) above under "Events
of Default " the Bank's obligation to purchase unremarketed Bonds under the Standby Bond Purchase
Agreement shall be immediately suspended (but not terminated) without notice or demand and the commitment
of the Bank shall terminate 30 days thereafter if such Event of Termination shall then be continuing.
(d) In the case of any Event of Termination as specified in subparagraphs (b), (c), (f) and (g)
above under
" -
Events of Default," the commitment and the obligation of the Bank to purchase unremarketed
Bonds shall immediately terminate without notice or demand, and thereafter the Bank shall be under no
obligation to purchase unremarketed Bonds, Promptly upon any such Event of Termination, the Bank shall give
written notice of the same to the Trustee; provided, however, that the Bank shall incur no liability or
responsibility whatsoever by reason of its failure to give such notice and such failure shall in no way affect the
termination of the Bank's commitment and of its obligation to purchase unremarketed Bonds pursuant to the
Standby Bond Purchase Agreement.
In the event that the commitment of the Bank (or the Obligor on an Alternate Liquidity Facility, as the
case may be) to provide moneys to pay the purchase price of the Bonds is suspended, the Trustee shall on the
day that any such suspension is lifted, take the action specified in the Standby Bond Purchase Agreement ~or
an Alternate Liquidity Facility, as the case may be) to make moneys available to pay the purchase price of
the Bonds that were tendered for purchase and were not purchased during such period of suspension.
Extension, Reduction or Tennination of the Standby Bond Purchase Agreement;
Alternate Liquidity Facility
The obligation of the Bank to purchase Bonds under the Standby Bond Purchase Agreement shall expire
at 5:00 p.m. (New York time) on the commitment termination date, which is the earliest to occur of (i)
November 17 , 1999, unless extended for one-year periods as provided in the Standby Bond Purchase
Agreement , (ii) the date on which the Bonds are no longer outstanding under the Indenture, (Hi) the date on
which an Alternate Liquidity Facility or Substitute Standby Bond Purchase Agreement is substituted for the
Standby Bond Purchase Agreement, or (iv) the date on which the Bank's commitment to purchase Bonds is
tenninated due to the occurrence of certain Events of Tennination, as described above under
" -
Consequences
of Event of Termination. "
Upon written request of the Company to the Bank not less than 45 nor more than 120 days prior to
November 17 , 1995 (and not less than 45 nor more than 120 days prior to each yearly anniversary of such
date thereafter), the Bank shall, within 45. days of such request, notify the Company whether it will extend the
scheduled expiration date of the Standby Bond Purchase Agreement for a period of one year. If the Bank fails
to notify the Company of its decision within such 45-day period, the Bank shall be deemed to have rejected
such request.
Upon any redemption, repayment or other payment of all or any portion of the principal amount of the
Bonds, the aggregate available principal commitment under the Standby Bond Purchase Agreement may be
reduced, upon written notice to the Bank by the Trustee, by the principal amo1,lnt of the Bonds so redeemed
repaid or otherwise paid, as the case may be. The available commitment shall automatically terminate on the
date on which an Alternate Liquidity Facility for the Bonds has become effective pursuant to the Indenture.
At any time (with not less than 20 days prior written notice received by the Trustee with copies of such
notice given to the Agent Bank or the Agent Obligor on an Alternate Liquidity Facility, as the case may be
and the Remarketing Agent) the Company may, at its option, (i) provide for the delivery to the Trustee on any
Business Day of an Alternate Liquidity Facility (including without limitation a line of credit of a commercial
bank or a liquidity facility from a financial institUtion. or a combination thereof) to replace the Standby Bond
Purchase Agreement or the Alternate Liquidity Facility then in effect with respect to the Bonds, as the case may
be, or (ii) terminate the Standby Bond Purchase Agreement or any Alternate Liquidity Facility then in effect.
An Alternate Liquidity Facility may have an expiration date earlier than the matUrity of the Bonds. The
Company must furnish to the Trustee on or before the date of delivery of the Alternate Liquidity Facility or
before the effective date of the termination of the Standby Bond Purchase Agreement or Alternate Liquidity
Facility then in effect (i) an opinion of Bond Counsel stating that the delivery of such Alternate Liquidity
Facility or the termination of the Standby Bond Purchase Agreement or the Alternate Liquidity Facility then
in effect complies with the terms of the Loan Agreement and wilJ not adversely affect the Tax-Exempt status
of the Bonds , and (ii) either (A) written evidence from Moody , if the Bonds are then rated by Moody , and
S&P, if the Bonds are then rated by S&P, in each case to the effect that such rating agency has reviewed the
proposed Alternate Liquidity Facility or the proposed termination of the Standby Bond Purchase Agreement or
Alternate Liquidity Facility then in effect , as the case may be, and that the delivery of the proposed Alternate
Liquidity Facility or the proposed termination of the Standby Bond Purchase Agreement or Alternate Liquidity
Facility then in effect, as the case may be, will not, by itself, result in a reduction, suspension or withdrawal
of such rating agency s short-term rating or ratings of the Bonds or (B) written evidence from the Insurer to
the effect that the Insurer has reviewed the proposed Alternate Liquidity Facility or the proposed termination
of the Standby Bond Purchase Agreement or Alternate Liquidity Facility then in effect, as the case may be, and
finds the same to be acceptable to the Insurer. An assignment by a Bank of its commitment or any portion
thereof under a Standby Bond Purchase Agreement to a bank or other institUtion that is not at the time already
a Bank thereunder will be treated as the delivery of an Alternate Liquidity Facility.
No Alternate Liquidity Facility or Substitute Standby Bond Purchase Agreement may be provided which
(a) so long as the Bonds bear interest at a Daily Interest Rate or a Weekly Interest Rate, reduces the number
of days of interest coverage to a period shorter than 35 days or (b) so long as the Bonds bear interest ata Term
Interest Rate, reduces the number of days of interest coverage to a period less than such minimum period as
may be approved by each rating agency then maintaining a rating on the Bonds.
In the event that the Company provides for the delivery on any Business Day to the Trustee with respect
to any Issue of Bonds of an Alternate Liquidity Facility or for termination of the Standby Bond Purchase
Agreement or Alternate Liquidity Facility then in effect where the above-described evidence from Moody s or
S&P's is not received, the Bonds are subject to mandatory purchase unless the obligation of the Bank or the
Obligor on an Alternate Liquidity Facility then in effect, as the case may be, to purchase such Bonds is
terminated or suspended, as more fully described herein under the caption "The Bonds-Mandatory Purchase.
, ,
: i
Substitute Standby Bond Purchase Agreement
The Company may, at its election , but only with the written consent of the Bank or the Obligor on an
Alternate Liquidity Facility, as the case may be, at any time provide for the delivery to the Trustee with
respect to any Issue of Bonds of a Substitute Standby Bond Purchase Agreement or an extension of the Standby
Bond Purchase Agreement or Alternate Liquidity Facility then in effect, as the case may be, for any period
commencing after its then-current expiration date. Any Substitute Standby Bond Purchase Agreement must be
issued by the same Bank or Banks which are parties to the Standby Bond Purchase Agreement in effect at the
time of such substitution and must be identical as to terms and conditions to the Standby Bond Purchase
Agreement being replaced, except that it may contain a later expiration date, provide for an increase or decrease
in the interest rate or the number of days of interest coverage or any combination of the foregoing.
THE LOAN AGREEMENTS
Each Loan Agreemen/ will operate independently. A default under one Loan Agreement will not
necessarily constitute a default under the other Loan Agreements. The Loan Agreements contain substantially
idem/cat terms. and the following is a summary of certain provisions common to the Loan Agreements. All
references in this summary to the Issuer. the Bank, the Loan Agreement and payments thereunder. the Indenture,
the Standby Bond Purchase Agreement. the Bonds. the Prior Bonds, the Insurance Policy. the Facilities and
other documents and parries shall be deemed to refer to the Issuer, the Bank or Banks, the Loan Agreement and
such paymems. the Indenture, the Standby Bond Purchase Agreement. the Bonds, the Prior Bollds, the
Insurance Policy, the Facilitiei,and such other documents and paTlies, respectively, relating to each Issue of
the Bonds.
Issuance of the Bonds; Loan of Proceeds
The Issuer is issuing the Bonds for the purpose of refunding the Prior Bonds, the proceeds of which were
used to finance or refinance, as the case may be, a portion of the Company s share of the costs of acquiring
and improving the Facilities. The proceeds of the sale of the Bonds will be deposited with the trustee for the
Prior Bonds and invested in permitted investments pursuant to the Utah Act, the Wyoming Act or the Colorado
Act, as the case may be, to provide for the payment of the principal of the Prior Bonds upon the redemption
thereof.
Loan Payments; The First Mortgage Bonds
As and for repayment of the loan made to the Company by the Issuer. the Company will pay to the
Trustee, for the account of the Issuer, an amount equal to the principal of, premium, if any, and interest on
the Bonds when due on the dates, in the amounts and in the manner provided in the Indenture for the payment
of the principal of, premium, if any, ,and interest on the Bonds, whether at maturity, upon redemption
acceleration or otherwise ("Loan Payments ); provided, however, that the obligation of the Company to make
any such Loan Payment will be reduced by the amount of any reduction under the Indenture of the amount of
the corresponding payment required to be made by the Issuer thereunder; and provided funher that the
obligation of the Company to make any such payment shall be deemed to be satisfied and discharged to the
extent of the corresponding payment made by the Company of principal of or premium, if any, or inter.est on
the First Mortgage Bonds.
Because such payments are not due until the stated interest and principal payment dates on the Bonds, in
the event that the Company ever fails to make timely payments to the Trustee under the Loan Agreement, the
Trustee would be unable to give notice of such failure to the Insurer until the stated payment date on the
Bonds. Under such circumstances, the Insurer would not be required under the terms of the Insurance Policy
to make payments to the Owners of the Bonds in respect of the principal of or interest on the Bonds until the
next business day succeeding the stated payment date on the Bonds. See "Bond Insurance" above.
The Company s obligation to repay the loan made to it by the Issuer will be se(:ured by First Mortgage
Bonds delivered to the Trustee equal in principal amount to, and bearing interest at the same rate and maturing
on the same date as, the Bonds. The payments to be made by the Company pursuant to the Loan Agreement
and the First Mortgage Bonds will be pledged under the Indenture by the Issuer to the Trustee. and the
Company is to make all payments thereunder and thereon directly to the Trustee. See "The First Mortgage
Bonds-General" below.
Pursuant to the Loan Agreement, the Company may provide for the release of its First Mortgage Bonds
by delivering to the Trustee collateral in substitution for the First Mortgage Bonds ("Substitute Collateral"), but
only if the Company shall, on the date of delivery of such Substitute Collateral, simultaneously deliver to the
Trustee (a) an opinion of Bond Counsel stating that delivery of such SubstitUte Collateral and release of the
First Mortgage Bonds complies with the terms of the Loan Agreement and will not adversely affect the Tax-
Exempt status of the Bonds; (b) written evidence from the Insurer and from each Bank to the effect that they
have reviewed the proposed Substitute Collateral and find it to be acceptable; and (c) written evidence from
Moody , if the Bonds are then rated by Moody s, and from S&P, if the Bonds are then rated by S&P, in each
case to the effect that such rating agency has reviewed the SubstitUte Collateral and that the release of the First
Mortgage Bonds and the substitution of the Substitute Collateral for the First Mortgage Bonds will not, by
itself, result in a reduction, suspension or withdrawal of such rating agency s rating or ratings of the Bonds.
Payments o.fPurchase Price
The Company will payor cause to be paid to the Trustee amounts equal to the amounts to be paid by the
Trustee pursuant to the Indenture for the purchase of outstanding Bonds thereunder (see "The Bonds-Optional
Purchase" and "Mandatory Purchase ), such amounts to be paid to the Trustee as the purchase price for the
Bonds tendered for purchase pursuant to the Indenture, on the dates such payments are to be made; provided
however, that the obligation of the Company to make any such payment under the Loan Agreement shall be
reduced by the amount of any moneys held by the Trustee under the Indenture and available for such payment;
provided further that the obligation of the Company to make any such payment under the Loan Agreement shall
be deemed to be satisfied and discharged to the extent of the corresponding payment made by the Bank to the
Trustee under the Standby Bond Purchase Agreement or by the Obligor on an Alternate Liquidity Facility
the Trustee under an Alternate Liquidity Facility.
Except as otherwise permitted under the Loan Agreement, as described above under "The Standby Bond
Purchase Agreemems-:-Extension, Reduction or Termination of the Standby Bond Purchase Agreement;
Alternate Liquidity Facility," the Company will provide for the payment of the amounts to be paid by the
Trustee for the purchase of Bonds by providing for the delivery of the Standby Bond Purchase Agreement (or
an Alternate Liquidity Facility, as the case may be) to the Trustee. The Trustee has been directed to take such
actions as may be necessary under the Standby Bond Purchase Agreement (or an Alternate Liquidity Facility,
as the case may be), in accordance with the provisions of the Indenture and the Standby Bond Purchase
Agreement (or an Alternate Liquidity Facility, as the case may be), to obtain the moneys necessary to pay the
purchase price of Bonds when due.
Obligation Absolute
The Company s obligation to make payments under the Loan Agreement and otherwise on the First
Mortgage Bonds will be absolute, irrevocable and unconditional and will not be subject to cancellation,
termination or abatement or to any defense other than payment, or to any right of setoff, counterclaim or
recoupment arising out of any breach under the Loan Agreement or the Indenture or otherwise by the Company,
the Trustee, the Remarketing Agent, the Insurer, any Bank, the Agent Bank (or the Obligor on an Alternate
Liquidity Facility and the Agent Obligor on an Alternate Liquidity Facility, as the case may be), or any other
party or out of any ' obligation or liability at any time owing to the Company by any such party.
Expenses
The Company is obligated to pay reasonable compensation and to reimburse certain expenses and advances
of the Issuer, the Trustee, the Registrar, the Remarketing Agent, the Paying Agent , Moody s and S&P directly
to such entity.
Tax Covenants; Tax-Exempt Status of Bonds
The Company covenants that the Bond proceeds, the earnings thereon and other moneys on deposit with
respect to the Bonds will not be used in such a manner as to cause the Bonds to be "arbitrage bonds" within
the meaning of the Code.
The Company covenants that it has not taken, and will not take, or permit to be taken on its behalf, any
action which would adversely affect the Tax-Exempt status of the Bonds and will take, or require to be taken,
such action as may, from time to time, be required under applic;able law or regulation to 'continue to cause the
Bonds to be Tax-Exempt. See "Tax Exemption.
Other Covenants of the Company
Maintenance of Existence; Conditions Under Which ExcePtions Permitted. The Company shall maintain
in good standing its corporate existence as a corporation organized under the laws of one of the states of the
United States or the District of Columbia and will remain duly qualifIed to do business in the State of the Issuer
will not dissolve or otherwise dispose of all or substantially all of its assets and will not consolidate with or
-. - '. -'
merge into another corporation; provided , however, that the Company may, without violating the foregoing,
undertake from time to time anyone or more of the following:(a) consolidate with or mer.ge into another
domestic corporation (i.e., a corporation incorporated and existing under the laws of one of the states of the
United States or of the District of Columbia), or sell or otherwise transfer to another domestic corporation all
or substantially all of its assets as an entirety and thereafter dissolve, provided the resulting, surviving or
transferee corporation, as the case may be, shall be the Company or a corporation qualified to do business in
the State of the Issuer as a foreign corporation 'or incorporated and existing under the laws of the State of the
Issuer, which as a result of the transaction shall have assumed (either by operation of law or in writing) all of
the obligations of the Company under the Loan Agreement, the First Mortgage Bonds and the Standby Bond
Purchase Agreement or any Alternate Liquidity Facility, as the case may be; or (b) convey all or substantially
all of its assets to one or more wholly owned subsidiaries of the Company so long as the Company shall remain
in existence and primarily liable on all of its obligations under the Loan Agreement and such subsidiary or
subsidiaries to which such assets shall be so conveyed shall guarantee in writing the performance of all of the
Company s obligations under the Loan Agreement, the First Mortgage Bonds and the Standby Bond Purchase
Agreement or any Alternate Liquidity Facility, as the case may be.
Assignment. With the consent of the Agent Bank (or the Agent Obligor on an Alternate Liquidity
Facility, as the case may be), the Company s interest in the Loan Agreement may be assigned in whole or in
part by the Company to another entity, subject, however, to the conditions that no assignment shall
(a) adversely affect the Tax-Exempt status of the Bonds or (b) relieve (other than as described in the preceding
paragraph) the Company from primary liability for its obligations to pay the First Mortgage Bonds or to make
the Loan Payments or to mak~ payments to the Trustee with respect to payment of the purchase price of the
Bonds or for any other of its obligations under the Loan Agreement; and subject further to the 'Condition that
the Company shall have delivered to the Trustee an opinion of counsel to the Company that such assignment
complies with the provisions described in this paragraph and an opinion of Bo~d Counsel to the effect that the;:
proposed assignment will not impair the validity of the Bonds under the Utah Act, the Wyoming Act or the
Colorado Act, as applicable, or adversely affect the Tax-Exempt status of the Bonds. The Company shall
within 30 days after the delivery thereof, furnish to the Issuer and the Trustee a true and complete copy of the
agreements or other documents effectuating any such assignment.
Maintenance and Repair: Taxes. Etc.The Company shall maintain the Project in good repair, keep the
same insured in accordance with standard industry practice and pay all costs thereof. The Company shall pay
or cause to be paid all taxes, special assessments and governmental , utility and other charges with respect to
the Project.
The Company may at its own expense cause the Facilities to be remodeled or cause such substitutions
modifications and improvements to be made to the Facilities from time to time as the Company, in its
discretion, may deem to be desirable for its uses and purposes, which remodeling, substitutions, modifications
and improvements shall be included under the terms of the Loan Agreement as part of the Facilities; provided, ,
however, that the Company shall not exercise any such right, power, election or option if the proposed
remodeling, substitution, modification or improvement would adversely affect the Tax-Exempt status of the
Bonds.
The Company shall cause insurance to be taken out and continuously maintained in effect with respect to
the Facilities in accordance with standard industry practice.
Anything in the Loan Agreement to the contrary notwithstanding, the Company shall have the right at any
time to cause the operation of the Facilities to be terminated if the Company shall have determined that the
continued operation of the Project or the Facilities is uneconomical for any reason.
Defaults
Each of the following events will constitute an "Event of Default " under the Loan Agreement:
(a) a failure by the Company to make when due any Loan Payment, any payment required to be
made to the Trustee for the purchase of Bonds or any payment on the First Mortgage Bonds, which
failure shall have resulted in,an "Event of Default" as described herein in paragraph (a), (b) or (c) under
The Indentures- Defaul ts
. ;
(b) a failure by the Company to pay when due any amount required to be paid under the Loan
Agreement or to observe and perform any other covenant, condition or agreement on the Company
part to be observed or performed under the Loan Agreement (other than a failure described in-clause (a)
above), which failure continues for a period of 60 days (or such longer period as the Issuer and the
Trustee may agree to in writing) after written notice given to the Company by the Trustee or to the
Company and the Trustee by the Issuer; provided, however, that if such failure is other than for the
payment of money and cannot be corrected within the applicable period, such failure shall not constitute
an Event of Default so long as the Company institutes corrective action within the applicable period and
such action is being diligently pursued; or
(c)certain events of bankruptcy. dissolution, liquidation or reorganization of the Company.
The Loan Agreement provides that, with respect to any Event of Default described in clause (b) above
if, by reason of acts of God, strikes, orders of political bodies, certain natural disasters, civil disturbances and
certain other events specified in the Loan Agreement , or any cause or event not reasonably within the control
of the Company, the Company is unable in whole or in part to carry out one or more of its agreements or
obligations contained in the Loan Agreement (other than cenain obligations specified in the Loan Agreement
including its obligations to make when due Loan Payments and otherwise on the First Mongage Bonds
payments to the Trustee for the purchase of Bonds, to pay certain expenses and taxes, to indemnify the Issuer
the Trustee and others against certain liabilities. to discharge liens and to maintain its existence). the Company
shall not be deemed in default by reason of not carrying out such agreements or performing such obligations
during the continuance of such inability.
Remedies
Upon the occurrence and continuance of any Event of Default described in (a) or (c) in the second
preceding paragraph, and further upon the condition that, in accordance with the terms of the Indenture, the
Bonds shall have been declared to be immediately due and payable pursuant to any provision of the Indenture
the Loan Payments shall, without further action, become and be immediately due and payable. Anywaiver of
any Event of Default under the Indenture and a rescission and annulment of its consequences will constitute
a waiver of the corresponding Event or Events of Default under the Loan Agreement and . a rescission and
annulment of the consequences thereof. See "The Indentures-Defaults.
Upon the occurrence and continuance of any Event of Default arising from a "Default" as such term is
defined in the Company Mortgage, the Trustee, as holder of the First Mortgage Bonds. will, subject to the
provisions of the Indenture, have the rights provided in the Company Mortgage. Any waiver made in
accordance with the Indenture of a "Default" under the Company Mortgage and a rescission and annulment
of its consequences shall constitute a waiver of the corresponding Event or Events of Default under the Loan
Agreement and a rescission and annulment of the consequences thereof.
Upon the occurrence and continuance of any Event of Default under the Loan Agreement, the Issuer may
take any action at law or in equity to collect any payments then due and thereafter to become due, or to seek
injunctive relief or specific performance of any obligation, agreement or covenant of the Company under the
Loan Agreement and under the First Mortgage Bonds.
Any amounts collected from the Company upon an Event of Default under the Loan Agreement will be
applied in accordance with the Indenture.
Amendments
THE INDENTURES
The Loan Agreement may be amended subject to the limitations contained in the Loan Agreement and
in the Indenture. See "The Indentures-Amendment of the Loan Agreements.
Each Indenture will operate independently. A default under one Indenture will not necessarily constitute
a default under the other Indentures. The Indentures contain substantially identical terms, and the following
is a summary of certain provisions common to the Indentures. All references in this summary to the Issuer
the Bank, the Loan Agreement and payments thereunder, the Indenture, the Bonds, the Bond Fund, the Standby
Bond Purchase Agreement, the Insurance Policy and other documents and parties are to the Issuer, the Bank
or Banks, the Loan Agreement and such payments, the Indenture, the Bonds, the Bond Fund, the Standby Bond
Purchase Agreement, the Insurance Policy and such other documents and parties, respectively, relating to each
Issue of Bonds.
Pledge and Security
Pursuant (0 the Indenture. the Loan Payments will be pledged by the Issuer to secure the payment of the
principal of, and premium, if any, and interest on, the Bonds and all other amounts payable under the Indenture
(other than the Issuer s rights to indemnification and reimbursement of expenses, and ,certain other rights).
including the Issuer s right to delivery of the First Mortgage Bonds. The Issuer will also pledge and assign to
the Trustee all its rights and interests under the Loan Agreement (other than its rights to indemnification and
reimbursement of expenses and certain other rights), and has pledged to the Trustee all moneys and obligations
deposited or to be deposited in the Bond Fund established with the Trustee; provided that the Trustee, the
Remarketing Agent, the Paying Agent and the Registrar will have a prior claim on the Bond Fund for the
payment of their compensation and expenses~d for the repayment of any advances (plus interest thereon)
made by them to effect performance of certain covenants in the Indenture if the Company has failed to make
any payment which results in an Event of Default under the Loan Agreement.
Application of Proceeds of the Bond Fund
The proceeds from the sale of the Bonds, excluding accrued interest, if any, will be deposited with the
trustee for the Prior Bonds and used to refund the Prior Bonds. See "Use of Proceeds " above. There is
created under the Indenture a Bond Fund to be held by the Trustee and therein established a Principal A(:count
and an Interest Account. Payments made by the Company under the Loan Agreement and otherwise on the First
Mortgage Bonds in respect of the principal of, premium, if any, and interest on, the Bonds and certain other
amounts specified in the Indenture are to be deposited in the appropriate account in the Bond Fund. While any
Bonds are outstanding and except as provided in a Tax Exemption Certificate and Agreement among the
Trustee, the Issuer and the Company (the "Tax Certificate ). moneys in the Bond Fund will be used solely for
the payment of the principal of, and premium, if any, and interest on, the Bonds as the same shall become due
and payable at maturity, upon redemption or upon acceleration of matUrity, subject to, the priot claim of the
Trustee, the Remarketing Agent, the Paying Agent and the Registrar to the extent described above in "Pledgeand Security. "
Investment of Funds
Subject to the provisions of the Tax Certificate, moneys in the Bond Fund will, at the direction of the
Company, be invested in securities or obligations specified in the Indenture. Gains from such investments will
be credited, and any loss will be charged, to the particular fund or account from which the investments were
made. During the term of the Standby Bond Purchase Agreement (or an Alternate Liquidity Facility, as the
case may be) moneys received under the Standby Bond Purchase Agreement (or an Alternate Liquidity Facility,
as the case may be) shall be held uninvested.
Defaults
Each of the following events will constitute an "Event of Default" under the IndentUre:
(a) a failure to pay the principal of, or premium, if any, on any of the Bonds when the same
becomes due and payable at maturity, upon redemption or otherwise;
(b) a failure to pay an installment of interest on any of the Bonds for a period of one day after
such interest has become due and payable;
(c) a failure to pay amounts due in respect of the purchase price of Bonds delivered to the Trustee
for purchase after such payment has become due and payable as provided under the captions "The
Bonds-Optional Purchase" and "Mandatory Purchase
(d) a failure by the Issuer to observe and perform any covenant, condition, agreement or provision
contained in the Bonds or the Indenture (other than a failure described in clause (a), (b) or (c) above),
which failure shall continue for a period of 90 days after written notice has been given to the Issuer and
the Company by the Trustee, which notice may be given at the discretion of the Trustee and must be
given at the written request of the Owners of not less than 25 % in principal amount of Bonds then
outstanding, unless such period is extended prior to its expiration by the Trustee, or by the Trustee and
the Owners of a principal amount of Bonds not less than the principal amount of Bonds the Owners of
which requested such notice, as the case may be; provided, however, that the Trustee, or the Trustee and
the Owners of such principal amount of Bonds, as the case may be, will be deemed to have agreed to an
extension of such period if corrective action is initiated by the Issuer, or the Company on behalf of the
Issuer, within such period and is being diligently pursued;
(e)
(f)
an "Event of Default" under the Loan Agreement; or
a "Default" under the Company Mortgage.
Remedies
Upon the occurrence (withoUt waiver or cure) of an Event of Default described in clause (a), (b), (c) or
(t) of the preceding paragraph or an Event of Default described in clause (e) of the preceding paragraph
resulting from an "Event of Default" under the Loan Agreement as described under clause (a) or (c) of "The
Loan Agreements-Defaults . herein, and further upon the conditions that , if (1) in accordance with the terms
of the Company Mongage, the First Mortgage Bonds shall have become immediately due and payable pursuant
to any provision of the Company Mortgage and (2) there shan have been filed with the Trustee a written
direction of the Insurer (unless an Insurer Default shall have occurred and be continuing), then the Bonds shall
without funher action, become immediately due and payable; provided that any waiver of any "Default" under
the Company Mongage and a rescission and annulment of its consequences will constitute a waiver of the
corresponding Event or Events of Default under the Indenture and rescission and annulment of the consequences
thereof.
The provisions described in the preceding paragraph are subject to the condition that if, after the principal
of the Bonds shall have been so declared to be , due and payable and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter provided, the Issuer shall cause
to be deposited with the Trustee a sum sufficient to pay all matured installments of interest upon all Bonds and
the principal of any and an Bonds which shall have become due otherwise than by reason of such declaration
(with interest upon such principal and, to the extent permissible by law, on overdue installments of interest , atthe rate per annum specified in the Bonds) and such amount as shall be sufficient to cover reasonable
compensation and reimbursement of expenses payableu to the Trustee, and all Events of Default under the
Indenture (Other than nonpayment of the principal of Bonds which shall have become due by said declaration)
shall have been remedied, then, in every such case, such Event of Default shall be deemed waived and such
declaration and its consequences rescinded and annulled. and the Trustee shall promptly give written notice of
such waiver, rescission and annulment to the Issuer and the Company and shall give notice thereof to Owners
of the Bonds by first-class mail; provided . however, that to the extent that the Standby Bond Purchase
Agreement (or an Alternate Liquidity Facility, as the case may be) was in effect immediately prior to the Event
of Default, there shall be no waiver, rescission or annulment until the commitment of the Bank or the Obligor
on an Alternate Liquidity Facility, as the case may be, to provide moneys in accordance with the Standby Bond
Purchase Agreement (or the Alternate Liquidity Facility, as the case may be) to purchase Bonds shall have been
fully reinstated; and provided funher that no such waiver, rescission and annulment shan extend to or affect
any other Event of Default or subsequent Event of Default or impair any right, power or remedy consequent
thereon.
Upon the occurrence and continuance of any Event of Default under the Indenture, the Trustee may, with
the consent of the Insurer (unless an Insurer Default has occurred and is continuing), and upon the written
direction of the Owners of not less than 25 % in principal amount of the Bonds outstanding and receipt of
indemnity to its satisfaction (except against gross negligence or willful misconduct) shall, pursue any available
remedy to enforce the rights of the Owners of the Bonds and require the Company, (he Issuer, the Insurer or
the Bank (or the Obligor on an Alternate Liquidity Facility, as the, case may be) to carry out any agreements,
bring suit upon the Bonds, require the Issuer to account as if it were the trustee of an express trust for the
Owners of the Bonds or enjoin any acts or things which may be unlawful or in violation of the rights of the
Owners of the Bonds. So long as an Insurer Default shall not have occurred and be continuing, upon the
occurrence and continuance of an Event of Default, the Insurer shall be entitled to 1:ontrol and direct the
enforcement of all rights and remedies granted to the Owners or the Trustee for the benefit of the Owners under
the Indenture. The Trustee is not required to take any action in respect of an Event of Default (other than, in
certain circumstances, to declare the Bonds to be immediately due and payable, to notify. the Insurer of
payments to be made pursuant to the Insurance Policy, to make certain payments with respect to the Bonds and
to draw on the Standby Bond Purchase Agreement (or Alternate Liquidity Facility, as the 1:ase may be)) or to
enforce the trusts created by the Indenture except upon the written request of the Owners of not less than 25
in principal amount of the Bonds then outstanding and receipt of indemnity satisfactory to it.
The Owners of a majority in principal amount of Bonds then outstanding will have the right to direct the
time, method and place of conducting all remedial proceedings available to the Trustee under the Indenture or
exercising any trust or power conferred on the Trustee upon furnishing satisfactory indemnity to the Trustee
(except against gross negligence or willful misconauct) and provided that such direction shall not result in any
personal liability of the Trustee.i I
No Owner of any Bond win have any right to institute any suit, action or proceeding in equity or at law
for the execution of any trust or power of the Trustee unless such Owner has previously given the Trustee
written notice of an Event of Default and unless the Owners of not less than 25 % in principal amount of the
Bonds then oUtstanding have made written request of the Trustee so to do, and unless satisfactory indemnity
"" .,
(except against gross negligence or willful misconduct) has been offered to the Trustee and the Trustee has not
complied with such request within a reasonable time.
Notwithstanding any other provision in the Indenture, the right of any Owner to receive payment of the
principal of, premium, if any, and interest on the Owner s Bond on or after the respective due dates expressed
therein, or to institute suit for the enforcement of any such payment on or after such respective dates, will not
be impaired or affected without the consent of such Owner of Bonds.
Defeasance
All or any ponions of Bonds (in Authorized Denominations) shall, prior to the maturity or redemption
date thereof, be deemed to have been paid for all purposes of the Indenture when:
(a) in the event said Bonds or portions thereof have been selected for redemption, the Trustee shall
have given, or the Company shall have given to the Trustee in form satisfactory to it irrevocable
instructions to give, notiCe of redemption of such Bonds or portions thereof;
(b) there shall have been deposited with the Trustee moneys which constitute Available Moneys
or moneys provided under the Standby Bond Purchase Agreement or an Alternate Liquidity Facility to
pay the purchase price of the Bonds;
(c) the moneys so deposited with the Trustee shall be in an amount sufficient (without relying on
any investment income) to pay when due the principal of. premium, if any, and interest due and to
become due (which amount of interest to become due shall be calculated at the Maximum Interest Rate
unless the interest rate borne by all of such Bonds is not subject to adjustment prior to the maturity or
redemption thereof, in which case the amount of interest shall be calculated at the rate borne by such
Bonds) on said Bonds or ponions thereof on and prior to the redemption date or maturity date thereof
as the case may be; provided, however, that if such payment is to be made upon optional redemption
such payment shall be made from Available Moneys;
(d) in the event said Bonds or portions thereof do not mature and are not to be redeemed within
the next succeeding 60 days, the Issuer at the direction of the Company shall have given the Trustee in
form satisfactory to it irrevocable instructions to give, as soon as practicable in the same manner as a
notice of redemption is given pursuant to the Indenture , a notice to the Owners of said Bonds or ponions
thereof and to the Insurer that the deposit required by clause (b) above has been made with the Trustee
and that said Bonds or portions thereof are deemed to have been paid and stating the maturity or
redemption date upon which moneys are to be available for the payment of the principal of and premium
if any, and interest on said Bonds or portions thereof;
(e) the Trustee and the Insurer shall have received written evidence from Moody s, if the Bonds
are then rated by Moody , and S&P and the Insurer if the Bonds are then rated by S&P. that such action
will not result in a reduction, suspension or withdrawal of the rating on the Bonds;
(f) the Trustee, Moody s, if the Bonds are then rated by Moody , and S&P, if the Bonds are then
rated by S&P, and the Insurer shall have received an opinion of an independent public accountant of
nationally recognized standing, selected by the Company (an "Accountant s Opinion ), to the effect that
the requirements set forth in clause (c) above have been satisfied; and
(g)
the Trustee, Moody s, if the Bonds are then rated by Moody , and S&P, if the Bonds are then
rated by S&P, and the Insurer shall have received an opinion of Bond Counsel to the effect that such
deposit will not adversely affect the Tax-Exempt status of the Bonds ("Bond Counsel's 'Opinion
Moneys deposited with the Trustee as described above shall not be withdrawn or used for any purpose
other than, and shall be held in trust for, the payment of the principal of, premium, if any, and interest on said
Bonds or ponions thereof, or for the payment of the purchase price of Bonds in accordance with the Indenture;
provided that such moneys, if not then needed for such purpose, shall to the extent practicable, be invested
and reinvested in Government Obligations maturing on or prior to the earlier of (a) the date moneys may be
required for the purchase of Bonds or (b) the Interest Payment Date next succeeding the date of investment or
reinvestment, and interest earned from such investments shall be paid over to the Company, as received by the
Trustee , free and clear of any trust, lien or pledge.
The provisions of the Indenture relating to (i) the registration and exchange of Bonds, (ii) the delivery
of Bonds to the Trustee for purchase and the related obligations of the Trustee with respect thereto, (iii) the
mandatory purchase of the Bonds in connection with the stated expiration, substitution or termination of the
,. '."""-'...-..----- -
Standby Bond Purchase Agreement or an Alternate Liquidity Facility, as the case may be, and (iv) payment of
the Bonds from such moneys, shall remain in full force and effect with respect to all Bonds until the maturity
date of the Bonds or the last date fixed for redemption of all Bonds prior to maturity, notwithstanding that all
or any portion of the Bonds are deemed to be paid; provided, further, that the provisions with respect to
registration and exchange of Bonds shall continue to be effective until the maturity or the last date fixed forredemption of all Bonds. ,-
In the event the requirements of the next to the last sentence of the next succeeding paragraph can be
satisfied, the preceding three paragraphs shall not apply and the following two paragraphs shall be applicable.
Any Bond shall be deemed to be paid within the meaning of the IndentUre when (a) payment of the
principal of and premium, if any, on such Bond, plus interest thereon to the due date thereof (whether such due
date is by reason of matUrity or acceleration or upon redemption as provided in the Indenture) either (i) shall
have been made or caused to be made in accordance with the terms thereof or (ii) shall have been provided
for by irrevocably depositing with the Trustee in trust and irrevocably set aside exclusively for such payment
(1) moneys sufficient to make such payment and/or (2) Government Obligations matUring as to principal and
interest in such amount and at such time as will insure, without reinvestment, the availability of sufficient
moneys to make such payment; provided, however, that if such payment is to be made upon optional
redemption, such payment shall be made from Available Moneys or from Government Obligations purchased
with Available Moneys; (b) all necessary and proper fees, compensation and expenses of the Issuer, the Trustee
and the Registrar pertaining to the Bonds with respect to which such deposit is made shall have been paid or
the payment thereof provided for to the satisfaction of the Trustee; and (c) an Accountant s Opinion, to the
effect that such moneys and/or Government Obligations will insure, without reinvestment, the availability of
sufficient moneys to make such payment, and a Bond Counsel's Opinion shall have been delivered to the
Trustee, Moody s, if the Bonds are then rated by Moody , and S&P, if the Bonds are then rated by S&P. The
provisions of this paragraph shall apply only if (x) the Bond with respect to which such deposit is made is to
mature or be called for redemption prior to the next succeeding date on which such Bond is subject to purchase
as described herein under the captions "The Bonds-Optional Purchase" and "Mandatory Purchase" and
(y) the Company waives, to the satisfaction of the Trustee, its right to convert the interest rate borne by such
Bond. At such times as a Bond shall be deemed to be paid thereunder, as aforesaid, such Bond shall no longer
be secured by or entitled to the benefits of the Indenture, except for the purposes of registration and exchange
of Bonds and of any such payment from such moneys or Government Obligations.
Notwithstanding the foregoing paragraph, no deposit under clause (a)(ii) of the immediately preceding
paragraph shall be deemed a payment of such Bonds as aforesaid until: (a) proper notice of redemption of such
Bonds shall have been previously given in accordance with the Indenture, or in the event said Bonds are not
to be redeemed within the next succeeding 60 days, until the Company shall have given the Trustee on behalf
of the Issuer, in form satisfactory to the Trustee, irrevocable instructions to notify. as soon as practicable, the
Owners of the Bonds in accordance with the Indenture, that the deposit required by clause (a) (ii)above has
been made with the Trustee and that said Bonds are deemed to have been paid in accordance with the Indenture
and stating the matUrity or redemption date upon which moneys are to be available for the payment of the
principal of and the applicable redemption premium, if any, on said Bonds, plus interest thereon to the due date
thereof; or (b) the maturity of such Bonds.
Removal or Trustee
With the prior written consent of the Agent Bank or the Agent Obligor on an Alternate Liquidity Facility,
as the case may be (which consent , if unreasonably withheld, shall not be required), the Trustee may
removed at any time by filing with the Trustee so removed, and with the Issuer, the Company, the Insurer, the
Registrar, the Remarketing Agent and the Agent Bank (or the Agent Obligor on an Alternate Liquidity Facility,
as the case may be), an instrument or instruments in writing executed by (a) the Insurer, if no Insurer Default
has occurred and is continuing, or (b) the Owners of not less than a majority in principal amount of the Bonds
then outstanding and, if no Insurer Default shall have occurred and be t:ontinuing, the Insurer. The Trustee may
also be removed by the Issuer under certain circumstances.
Modifications and Amendments
The IndentUre may be modified or amended by the Issuer and the Trustee by supplemental indentureswithout the consent of the Owners of the Bonds for any of the following purposes: (a) to cure any formal
defect, omission, inconsistency or ambiguity in the Indenture; (b) to add to the covenants and agreements of
the Issuer contained in the Indenture or of the Company, the Insurer or the Bank (or the Obligor on an
Alternate Liquidity Facility, as the case may be) or the Agent Bank (or the Agent Obligor on an Alternate
Liquidity Facility, as the case may be) contained in any document, other 'Covenants or agreements thereafter
to be observed, or to assign or pledge additional security for any of the Bonds, or to surrender any right or
power reserved or conferred upon the Issuer or the Company which shall not materially adversely affect the
interests of Owners of the Bonds; (c) to confirm, as further assurance, any pledge of or lien on any property
subjected or to be subjected to the lien of the Indenture; (d) to comply with the requirements of the Trust
Indenture Act of 1939, as amended; (e) to modify, alter, amend or supplement the Indenture or anysupplemental indenture in any other respect which in the judgment of the Trustee is not materially adverse to
the Owners of the Bonds; provided, however, that any such modification, alteration, amendment or supplement
shall not take effect until the Insurer (unless an Insurer Default has occurred and is continuing) and the Agent
Bank or the Agent Obligor on an Alternate Liquidity Facility, as the case may be, shall have consented in
writing to such modification, alteration, amendment or supplement; (f) to implement a conversion of the interestrate on the Bonds or to evidence or give effect to or facilitate the delivery and administration under the
Indenture of an Alternate Liquidity Facility or a Substitute Standby Bond Purchase Agreement; (g) to provide
for a depository to accept tendered Bonds in lieu of the Trustee; (h) to modify or eliminate the book-entry
registration system for any of the Bonds; (i) to provide for uncertificated Bonds or for the issuance of coupons
and bearer Bonds or Bonds registered only as to principal , but only to the extent that such would not adversely
affect the Tax-Exempt status of the Bonds; (j) to secure or maintain ratings for the Bonds from Moody s and/or
S&P in both the highest short-term or commercial paper debt Rating Category (as defined' in the Indenture) and
also in either of the two highest long-term debt Rating Categories; (k) to provide demand purchase obligations
to cause the Bonds to be authorized purchases for investment companies; (I) to provide for any SubstitUte
Collateral and the release of any First Mortgage Bonds; (m) to provide for the appointment of a successor
Trustee, Registrar or Paying Agent; (n) to provide the procedures required to permit any Owner to separate
the right to receive interest on .the Bonds from the right to receive principal thereof and to sell or dispose of
such right as contemplated by Section 1286 of the Code; (0) to provide for any additional procedures, covenants
or agreements necessary to maintain the Tax-Exempt status of the Bonds; (p) to modify, alter, amend or
supplement the Indenture in any other respect (which in the judgment of the Trustee is not materially adverseto the Owners), if the effective date of such supplemental indenture or amendment is a date on which all of the
Bonds affected thereby are subject to mandatory purchase and are so purchased; and (q) to provide for the
replacement of the Insurer or for an additional Insurer following the occurrence of an Insurer Default or
provide for an additional Insurer following the withdrawal or suspension or reduction below AAA (or its
equivalent rating) by S&P and Aaa (or its equivalent rating) by Moody s of the long-term ratings of the Insurer
provided that the insurance policy provided by the replacement or additional Insurer would result in a long-
term rating on the Bonds equal to AAA (or its equivalent rating) by S&P and Aaa (or its equivalent rating) by
Moody
Before the Issuer and the Trustee shall enter into any supplemental indenture as described above, there
shall have been delivered to the Trustee, the Company, the Insurer and the Agent Bank (or the Agent Obligoron an Alternate Liquidity Facility, as the case may be) an opinion of Bond Counsel stating that such
supplemental indenture is authorized or permitted by the Indenture and will, upon the execution and delivery
thereof, be valid and binding upon the Issuer in accordance with its terms, and will not impair the validity
under the Utah Act, the Wyoming Act or the Colorado Act, as applicable, of the Bonds or adversely affect the
Tax-Exempt status of the Bonds.
The Trustee shall provide written notice of any Supplemental IndentUre to the Insurer, the Agent Bank
(or the Agent Obligor on an Alternate Liquidity Facility, as the case may be), Moody s, S&P and the Owners
of all Bonds then outstanding at least 30 days prior to the effective date of such Supplemental Indenture. Such
notice shall state the effective date of such Supplemental Indenture, shall briefly describe the nature of such
Supplemental Indenture and shall state that a copy thereof is on file at the principal office of the Trustee for'
inspection by the parties mentioned in the preceding sentence.
Except for supplemental indentures entered into for the purposes described in the second preceding
paragraph, the Indenture will not be modified, altered , amended supplemented or rescinded without the consent
of the Insurer (unless an Insurer Default has occurred and is continuing), together with the Owners of not less
than 60% in aggregate principal amount of Bonds outstanding, who shall have the right to consent to and
approve any supplemental indenture; provided that, unless approved in writing by the Insurer (unless an Insurer
Default has occurred and is continuing), and the Owners of all the Bonds then affected thereby, there will not
be permitted (a) a change in the times, amounts or currency of payment of the principal of, or premium, if any,
or interest on any Bond, a change in the terms of the purchase thereof by the Trustee, or a reduction in the
principal amount or redemption price thereof or the rate of interest thereon, (b) the creation of a claim or lienon or a pledge of the receipts and revenues of the Issuer under the Loan Agreement ranking prior to or on a
parity with the claim, lien or pledge created by the Indenture, or (-c) a reduction in the aggr-egate principal
. amount of Bonds the consent of the Owners of which is required to approve any such supplemental indentureor which is required to approve any amendment to the Loan Agreement. No such amendment of the Indenture
shall be effective without the prior written consent of the Company and the Agent Bank (or the Agent Obligor
on an Alternate Liquidity Facility, as the case may be).
....,......_'...._.-.,.,
Amendment of the Loan Agreements
Without the consent of or notice to the Owners of the Bonds , the Issuer may, with the consent of the
Insurer (unless an Insurer Defaull has occurred and is continuing), modify. aller, amend or supplement the Loan
Agreement , and the Trustee may consent thereto, as may be required (a) by the provisions of the Loan
Agreement and the Indenture, (b) for the purpose of curing any formal defect, omission, inconsistency or
ambiguity therein , (c) in connection with any other change therein which in the judgment of the Trustee is not
materially adverse to the Owners of the Bonds; provided, however, that any such modification, alteration
amendment or supplement shall not talee effect- until the Insurer (unless an Insurer Defaull shall have occurred
and be continuing) and the Agent Bank or the Agent Obligor on an Allemate Liquidity Facility, as the case may
, shall have consented in writing to such modification, alteration, amendment or supplement; provided further
that in determining whether any such modification, alleration , amendment or supplement is materially adverse
to the Owners of the Bonds, the Trustee shall consider the effect on the Owners as if there were no Insurance
Policy with respect to the Bonds, (d) to secure or maintain ratings for the Bonds from Moody s and/or S&P
in bOth the highest short-term or commercial paper debt Rating Category and also in either of the two highest
long-term debt Rating Categories, (e) in connection with the delivery and substitution of any Substitute
Collateral and the release of any First Mortgage Bonds, (t) to add to the covenants and agreements of the Issuer
contained in the Loan Agreement or of the Company or of the Insurer or of the Bank (or the Obligor on an
Alternate Liquidity Facility, as the case may be) or the Agent Bank (or the Agent Obligor on an Alternate
Liquidity Facility, as the case may be) contained in any document , other covenants or agreements thereafter
to be observed, or to assign or pledge additional security for any of the Bonds, or to surrender any right or
power reserved or conferred upon the Issuer or the Company, which shall not materially adversely affect the
interest of the Owners of the Bonds, (g) to provide demand purchase obligations to cause the Bonds to be
authorized purchases for investment companies , (h) to provide the procedures required to permit any Owner
to separate the right to receive interest on the Bonds from the right to receive principal thereof and to sell or
dispose of such right as contemplated by Section 1286 of the Code, (i) to provide for any additional procedures
covenants or agreements necessary to maintain the Tax-Exempt status of interest on the Bonds; (j) to modify,
alter, amend or supplement the Loan Agreement in any other respect (which in the judgment of the Trustee is
not materially adverse to the Owners), including amendments which would otherwise be described herein, if
the effective date of such supplement or amendment is a date on which all of the Bonds affected thereby are
subject to mandatory purchase and are so purchased; and (k) to provide for the replacement of the Insurer or
for an additional Insurer following the occurrence of an Insurer Defaull or to provide for an additional Insurer
following the withdrawal or suspension or reduction below AAA (or its equivalent rating) by S&P and Aaa (or
its equivalent rating) by Moody s of the long-term ratings of the Insurer provided that the insurance polic)'
provided by the replacement or additional Insurer would result in a long-term rating on the Bonds equal to AAA
(or its equivalent rating) by S&P and Aaa (or its equivalent rating) by Moody
Before the Issuer shall enter into, and the Trustee shall consent to, any modification, alteration.
amendment or supplement to the Loan Agreemerit as described in the immediately preceding paragraph, (a) the
Trustee shall cause notice of such proposed modification, alteration , amendment or supplement to be provided
to the Insurer, Moody s and S&P, stating that a copy thereof is on file at the office of the Trustee for
inspection by the Insurer, Moody s and S&P and (b) there shall have been delivered to the Issuer, the Insurer
and the Trustee an opinion of Bond Counsel stating that such modification, alteration, amendment or supplement
is authorized or permitted by the Loan Agreement or the Indenture and the Utah Act, the Wyoming Act or the
Colorado Act, as applicable, complies with their respective terms, will, upon the execution and delivery thereof
be valid and binding upon the Issuer in accordance with its terms and will not adversely affect the Tax-Exempt
status of the Bonds.
The Issuer and the Trustee will not consent to any other amendment, change or modification of the Loan
Agreement without the written approval or consent of the Agent Bank (or the Agent Obligor on an Alternate
Liquidity Facility, as the case may be), the Insurer (unless an Insurer Defaull has occurred and is continuing)
and the Owners of not less than 60% in aggregate principal amount of the Bonds at the time outstanding;
provided, however, that, unless approved in writing by the Owners of all Bonds affected thereby, nothing in
the Indenture shall permit, or be construed as permitting, a change in the obligations of the Company to make
Loan Payments or payments to the Trustee for the purchase of Bonds. No amendment of the Loan Agreement
will become effective without the prior written consent of the Agent Bank (or the Agent Obligor on an Allemate
Liquidity Facility, as the case may be), the Insurer (unless an Insurer Defaull has occurred and is -continuing)
and the Company.
Before the Issuer shall enter into, and the Trustee shall consent to, any modification, alleration,
amendment or supplement to the Loan Agreement as described in the immediately preceding paragraph, thereshall have been delivered to the Issuer, the Agent Bank (or the Agent Obligor on an Allernate Liquidity
Facility, as the case may be), the Insurer and the Trustee an opinion of Bond Counsel stating that such
modification, alteration, amendment or supplement is authorized or permitted by the Loan Agreement or the
_,-,-
Indenture and the Utah Act, the Wyoming Act or the Colorado Act, as applicable , complies with their
respective terms, will , upon the execution and delivery thereof, be valid and binding upon the Issuer in
accordance with its terms and will not adversely affect the Tax-Exempt status of the Bonds.
THE FIRST MORTGAGE BONDS
Pursuant to the provisions of the Indentures and six separate Pledge Agreements each dated as of
November 1, 1994 between the Company and the Trustee (individually, a "Pledge Agreement " and, collectively,
the .Pledge Agreements ), the First Mortgage Bonds will be issued by the Company to secure its obligations
under the Loan Agreement relating to each of the six Issues of Bonds. The following summary of certain
provisions of the First Mortgage Bonds and the Company Mortgage and Class "A" Mortgages and Class "
Bonds referred to below does not purport to be complete and is qualified in its entirety by reference thereto and
includes terms defined in such Mortgages. All references in this summary to the Trustee, the Bonds, the
Indenture, the Loan Agreement and the Pledge Agreement shall be deemed to refer to the Trustee, the Bonds
the Indenture, the Loan Agreement, the Pledge Agreement and such other documents and parties, respectively,
relating to each Issue of the Bonds.
General
The First Mortgage Bon~s will be issued in the same principal amount and will mature on the same date
as the Bonds. In addition, the F.,jrst Mortgage Bonds will be subject to redemption prior to maturity upon the
same terms as the Bonds, so that upon any redemption of the Bonds, an equal ag-gregate principal amount of
First Mortgage Bonds will be redeemed. The First Mortgage Bonds will bear interest at the same rate, and be
payable at the same times, as the Bonds. See "The Bonds-Special Mandatory Redemption of Bonds. above.
First mortgage and- collateral trust bonds issued under the Company Mortgage ("Company Mortgage
Bonds ) are secured by first mortgage bonds (which do not bear interest) issued under the Mortgages and Deeds
of Trust, as supplemented, of Pacific Power & Light Company (the "Pacific Mortgage ) and Utah Power &
Light Company (the "Utah Mortgage ) (collectively, the "Class 'A' Mortgages ) and deposited with the
Company Mortgage Trustee, and/or by a first mortgage lien of the Company Mortgage (the "Lien ) on certain
property not subject to the Class " A" Mortgages. First lien property not subject to the Class " A" Mortgages
could include electric utility property acquired by the Company of the type described below that is nOI a
renewal, replacement or extension of or an addition to the existing Pacific Power or Utah Power syslem.
Company Mortgage Bonds issued under the Company Mortgage are equally secured and pari passu.
The Company assumed the Pacific and Utah Mortgages as the surviving corporation in its 1989 merger
with PacifiCorp, a Maine corporation, and Utah, Power & Light Company, a Utah corporation. The first
mortgage bonds issued under these Class " A" Mortgages ("Class ' A' Bonds ") are secured by a first mortgage
lien on certain properties owned by the particular company prior to the merger and on improvements
extensions and additions to, and renewals and replacements of, such properties.
The Company will receive a credit against its obligations to make any payment of principal of or
-premium, if any, or interest on the First Mortgage Bonds and such obligations will be deemed fully or partially,
as the case may be, satisfied and discharged , in an amount equal to the amount, if any, paid by the Company
under the Loan Agreement , or otherwise satisfied or discharged, in respect of the principal of or premium, if
any, or interest on the Bonds; provided, however, that the Company shall receive no such credit for any
payment with respect to any Bond made by the Insurer. The obligations of the Company to make such
payments with respect to the First Mortgage Bonds will be deemed to have been reduced by the amount -of such
credit.
Pursuant to provisions of the Indenture, the Loan Agreement and the Pledge Agreement, the First
Mortgage Bonds will be registered in the name of and held by the Trustee for the benefit of the Owners and
will not be transferable except to a successor trustee under the Indenture. At the time any Bonds 'Cease to be
outstanding under the Indenture, the Trustee will surrender to the Company Mortgage Trustee an equal
aggregate principal amount of First Mortgage Bonds.
Security
The First Mortgage Bonds and any other Company Mortgage Bonds now or hereafter outstanding under
- the Company Mortgage are or will be, as the case may be, secured by the Class " A" Bonds (which need not
bear interest) held by the Company Mortgage Trustee and/or by a first mortgage Lien of the Company
Mortgage on certain property of the Company. Prescntly, most of the Company s property, while subject to
the Lien of the Company Mortgage, is subject to the respective first Liens of the Class " A" Mortgages. The
First Mortgage Bonds will have the benefit of first mortgage Liens of the Class " A" Mortgages on such
property to the extent of the aggregate principal amount thereof issued on the basis of Class " A" Bonds held
by the Company Mortgage Trustee.
The Lien of the Company Mortgage and Liens of the Class " A" Mortgages are subject to Excepted
Encumbrances, including tax and construction liens, purchase money liens and certain other exceptions.
There are excepted from the Lien of the Company Mortgage all cash and securities (except those
specifically deposited); equipment. materials or supplies held for sale or other disposition; any fuel and similar
consumable materials and supplies; automobiles, other vehicles, aircraft and vessels; timber. minerals, mineral
rights and royalties; receivables, contracts, leases and operating agreements; electric energy, gas, water, steam.
ice and other products for sale, distribution or other use; natural gas wells; gas transportation lines or other
property used in the sale of natural gas to customers or to a natural gas distribution or pipeline company, up
to the point of cOimection with any distribution system; the Company s interest in the Wyodak Facility; and all
properties that have been released from the Pacific Mortgage or the Utah Mortgage and that PacifiCorp, a
Maine corporation, or Utah Power & Light Company. a Utah corporation, contracted to dispose of, but title
to which had not passed , at the date of the Company Mortgage. The Class " A" Mortgages have similar. but
not identical , exceptions. The Company has reserved the right, without any consent or other action by holders
of Company Mortgage Bonds created since March 15, 1993, including the First Mortgage Bonds, to amend the
Company Mortgage in order to except from the Lien of the Company Mortgage allowances allocated to steam-
electric generating plants owned by the Company, or in which the Company has interests. pursuant to Title IV
of the Clean Air Act Amendments of 1990.
The Company Mortgage contains provisions subjecting after-acquired property to the Lien thereof. These
provisions may be limited. at the option of the Company. in the case of consolidation or merger (whether or
not the Company is the surviving corporation), conveyance or transfer of all or substantially all of the utility
property of another electric utility company to the Company or sale of substantially all of the Company s assets.
In addition, after-acquired property may be subject to a Class " A" Mortgage, purchase money mortgages and
other liens or defects in title.
The Company Mortgage provides that the Company Mortgage Trustee shall have a lien upon the
mortgaged property, prior to the holders of Company Mortgage Bonds, for the payment of its reasonable
compensation and expenses and for indemnity against certain liabilities.
Property subject to the Lien of the Company Mortgage may be released upon the basis of: (i) the release
of such property from the Lien of a Class " A" Mortgage; (ii) the deposit of -cash or, to a limited extent,
purchase money mortgages; (iii) Property Additions, after making adjustments for certain prior lien bonds
outstanding against Property Additions; and/or (iv) waiver of the ri,ght to issue Company Mortgage Bonds.
Cash may be withdrawn upon the bases stated in (i), (iii) and (iv) above. Property that does not constitute
Funded Property may be released without funding other property. Similar provisions are in effect as to cash
proceeds of such property. The Company Mortgage contains special provisions with respect to certain prior
lien bonds deposited and disposition of moneys received on deposited prior lien bonds. Property may be
released from the Class " A" Mortgages on similar but not identical bases.
Dividend Restriction
The Company may not declare or pay dividends (other than dividends payable solely in shares of its
common stock) on any shares of its common stock if, after giving effect to such declaration or payment, the
Company would not be able to pay its debts as they become due in the usual course of business. The Pacific
and Utah Mortgages contain provisions restricting payment of cash dividends and other distributions on common
stock. The amount restricted is subject to being increased or decreased on the basis of various factors. At
September 30, 1994, approximately $431,000,000 was available for these purposes. For additional restrictions
on the payment of dividends. see " Appendix A-PacifiCorp-Incorporationof Certain Documents by Reference
below.
Issuance of Additional Company Mortgage Bonds and Withdrawal of Cash
Deposited Against Such Issuance
The principal amount of Company Mortgage Bonds which may be issued under the Company Mortgage
is not limited, subject to the provisions of the Company Mortgage. Company Mortgage Bonds may be issued
from time to time on the basis of (i) Class " A" Bonds (which need not bear interest) delivered to the Company
Mortgage Trustee; (ii) 70% of qualified Property Additions after adjustments to offset retirements;
~iii) retirement of Company Mortgage Bonds or certain prior lien bonds; and/or (iv) deposits of cash. With
certain exceptions in the case of (i) and (iii) above. the issuance of Company Mortgage Bonds is subject to
Adjusted Net Earnings of the Company for 12 consecutive months out of the preceding 15 months, before
. -
income taxes, being at least twice the Annual Interest Requirements on all Company Mortgage Bonds at the
time outstanding, including the additional issue of First Mortgage Bonds, all outstanding Class " A" Bonds held
other than by the Company Mortgage Trustee or by the Company, and all other indebtedness secured by a lien
prior 10 the Lien of the Company Mortgage. In general, interest on variable interest bonds, if any, is calculated
using the rate then in effect.
Property Additions generally include electric, gas, steam and/or hot water utility property but not fuel
securities, automobiles, other vehicles or aircraft, or property used principally for the production or gatheringof natural gas.
Additional Class " A" Bonds may only be issued as the basis of the issuance of additional Company
Mortgage Bonds. Class " A" Bonds may be issued under the Pacific Mortgage or the Utah Mortgage on the
basis of (i) 60% of qualified Property Additions after adjustments to offset retirements; (ii) retirement of Class
A" Bonds or certain prior lien bonds; and/or (iii) deposits of cash with the particular Class " A" Mortgage
trustee. The issuance of Class " A" Bonds is subject to earnings tests which in application are less restrictive
than the Adjusted Net Earnings test under the Company Mortgage.
Property Additions under Class " A" Mortgages are similar, but not identical, to Property Additions under
the Company Mortgage.
The Class " A " Mortgages currently have maintenance funds and sinking and improvement funds applicable
to certain series of bonds outstanding thereunder, none of which would permit the redemption of any of the
Company Mortgage Bonds. As these funds cease to be in effect, any Property Additions previously used to
satisfy their requirements would become available to issue Class " A" Bonds.
The issuance of Company Mortgage Bonds and Class " A" Bonds on the basis of Property Additions
subject to prior liens is restricted. Company Mortgage Bonds may, however, be issued against the deposit of
Class " A" Bonds.
Modification
The rights of the holders of the Company Mortgage Bonds may be modified with the consent of the
holders of at least 60% of the Company Mortgage Bonds, including the consent of the holders of at least 60%
of the Company Mortgage Bonds adversely affected. In general, no modification of the terms of payment of
principal, premiums if any, or interest and no modification affecting the Lien or reducing the percentage of
Company Mortgage Bonds required for modification is effective against any bondholder without the consent of
such holder.
The rights of the holders of present Class " A" Bonds may be modified with the consent of the holders
of 70% of the Class "A" Bonds under the applicable Class "A" Mortgage and, if less than all series of Class
A" Bonds are adversely affected , the consent also of the holders of 70% of the Class " A" Bonds of each series
so affected. The foregoing percentages may be reduced to 66 2/3 % (in the 'Case of the Pacific Mortgage) or
60% (in the case of the Utah Mortgage) in the futUre without the consent of the Company Mortgage Trustee
as holder of Class " A" Bonds. In general , no modification of the terms of payment of principal, premium, if
any, or interest, no modification affecting the Lien or reducing the percentage required for modification and
no modification of certain other covenants is effective against any holder of Class " A" Bonds without the
consent of such holder.
The Company Mortgage Trustee is, unless there is a Default under the CQmpany Mortgage, generally
required to vote Class " A" Bonds held by it with respect to any amendment of the applicable Class " A "
Mortgage proportionately with the vote of the holders of all Class " A" Bonds then actually voting, except that
the Company Mortgage Trustee must vote in favor of certain amendments to the Pacific Mortgage and the Utah
Mortgage as specified in Exhibits X and Y to the Company Mongage.
The Company Mortgage Trustee
Chemical Bank, a New York corporation acts as lender and agent under loan agreements with the
Company and affiliates of the Company, and serves as trustee under indentures and other agr.eemenls involving
the Company and its affiliates. Chemical Bank is also the trustee under the Pacific and Utah Mortgages.
Defaults and Notices
Defaults are defined in the Company Mortgage as: (i) default in payment of principal; (ii) default for 60
days in payment of interest or an in~tallment of any fund r.equired to be applied to the purchase or redemption
,_..,----,-".._,----~
of any Company Mortgage Bonds; (iii) default in payment of principal or interest with respect to certain prior
lien bonds; (iv) certain events in bankruptcy, insolvency or reorganization; (v) default in other covenants for
90 days after notice; and (vi) the existence of any "Default" as defined under the Pacific Mortgage or the Utah
Mortgage or any default under another Class " A n Mortgage which permits the declaration of the principal of
all of the bonds secured by such Class " A" Mortgage and the interest accrued thereupon due and payable.
effective default under any Class n A n Mortgage or under the Company Mortgage will result in an effective
default under all such mortgages. The Company Mortgage Trustee may withhold notice of default (except in
payment of principal , interest or funds for retirement of Company Mortgage Bonds) if it determines that it is
not detrimental to the interests of the bondholders.
Defaults" under the Pacific Mortgage and Utah Mortgage are similar, but not identical, to Defaults under
the Company Mortgage. The trustee under a Class " A" Mortgage may withhold notice of default (except in
payment of principal , interest or funds for retirement of Class " A" Bonds) if it determines that it is in the
interest of the holders of Class " A" Bonds issued under such Class " A" Mortgage.
The Company Mortgage Trustee or the holders of 25 of the Company Mortgage Bonds may declare the
principal and interest due and payable on Default, but a majority may annul such declaration if such Default
has been cured. No holder of Company Mortgage Bonds may enforce the Lien of the Company Mortgage
without giving the Company Mortgage Trustee written notice of a Default and unless the holders of 25% of the
Company Mortgage Bonds have requested the Company Mortgage Trustee to act and offered it reasonable
opportunity to act and indemnity satisfactory to it against the costs, expenses and liabilities to be incurred
thereby and the Company Mortgage Trustee shall have failed to act. The holders of a majority of the Company
Mortgage Bonds may direct the time, method and place of conducting any proceedings for any remedy available
to the Company Mortgage Trustee or exercising any trust or power conferred on the Trustee. The Company
Mortgage Trustee is not required to risk its funds or incur personal liability if there is reasonable ground for
believing that repayment is not reasonably assured.
The Company must give the Company Mortgage Trustee an annual statement as to whether or not the
Company has fulfilled its obligations under the Company Mortgage throughout the preceding calendar year.
Voting of the First Mortgage Bonds
The Trustee, as holder of the First Mortgage Bonds, shall vote or consent proportionately with what
officials of or inspectors of votes at any meeting of bondholders under the Company Mortgage, or the Company
Mortgage Trustee in the case of consents without such a meeting, reasonably believe will be the vote or consent
of the holders of all other outstanding Company Mortgage Bonds; provided, however, that the Trustee shall not
vote in favor of, or consent to, any modification of the Company Mortgage which, if it were a modification
of the Indenture, would require approval of the Owners of Bonds and the Insurer (unless an Insurer Default has
occurred and is continuing, in which event the consent of the. Bank, or the Obligor on an Alternate Liquidity
Facility, as the case may be, shall be required).
LITIGATION
There is no pending or, to the knowledge of each Issuer, threatened litigation against such Issuer that in
any way questions or materially affects the Bonds of such Issuer, the validity or enforceability of the Loan
Agreements or the Indentures to which such Issuer is a party or any proceedings or transaction relating to the
issuance, sale or delivery of the Bonds or that may materially adversely affect the redemption of the related
Prior Bonds.
UNDERWRITING
Pursuant to and subject to the conditions set forth in a separate Bond Purchase Agreement with respect
to each Issue of Bonds, Goldman, Sachs & Co., as Underwriter with respect to the Emery Bonds. J.P. Morgan
Securities Inc., as Underwriter with respect to the Sweetwater Bonds, the Lincoln Bonds and the Converse
Bonds and Morgan Stanley & Co. Incorporated, as Underwriter with respect to the Carbon Bonds and the
Moffat Bonds, have agreed to purchase the Bonds of such Issue from the Issuer thereof at a purchase price of
100% of the principal amount thereof. Each Underwriter is committed to purchase all of the Bonds of an Issue
if any are purchased. The Company has agreed to pay the Underwriters an aggregate fee of $757 645 in
connection with such purchases, to reimburse the Underwriters for their reasonable expenses in connection with
such purchases and to indemnify the Underwriters against certain liabilities, including liabilities under the
federal securities laws. The Underwriters may offer and sell the Bonds to certain dealers and others at prices
~~ -
lower than the initial offering price stated on the cover page hereof. After the initial public offering. the public
offering prices may be changed from time to time by the Underwriters.
In the ordinary course of their respective businesses, each of the Underwriters have engaged, and will in
the future engage, in commercial and investment banking activities with the Company and certain of itsaffiliates.
TAX EXEMPTION
The Code and the 1954 Code contain a number of requirements and restrictions which apply to the Bonds
including investment restrictions, periodic payments of arbitrage profits to the United States, requirements
regarding the proper use of bond proceeds and the facilities financed therewith, and certain other matters. The
Company and each Issuer have covenanted to comply with all requirements of the Code and the 1954 Code
that must be satisfied in order for the interest on the Bonds to be excludable from gross income. Failure by
the Company or an Issuer to comply with certain of such requirements could cause interest on all of the Bonds
to become subject to federal income taxation retroactive to the date of issuance of the Bonds.
Subject to the condition that the Company and each Issuer comply with the above-referenced covenants,
under present law, in the opinion of Bond Counsel , interest on the Bonds will not be includible in the .gross
income of the Owners thereof for federal income tax purposes, except for interest on any Bond for any period
during which such Bond is owJled by a person who is a substantial user of any of the Facilities or any person
considered to be related to such:person (within the meaning of Section 1O3(b) (13) of the 1954 Code). The
interest on the Bonds will not be treated as an item of tax preference in computing the alternative minimum tax
for individuals and corporations. Such interest will be taken into account, however, in computing an adjustment
used in determining the alternative minimum tax for certain corporations.
The Code includes provisions for an alternative minimum tax for corporations. The alternative minimum
tax is levied for taxable years beginning after December 31 , 1986 in addition to the corporate regular tax in
certain cases. The alternative minimum tax, if any, depends upon the corporation s alternative minimum
taxable income which is the corporation s taxable income with certain adjustments. One of the adjustment items
used in computing the alternative minimum taxable income of corporations (excluding S corporations, Regulated
Investment Companies, Real Estate Investment Trusts, and REMICs) is an amount equal to 75 % of the excess
of such corporation s "adjusted current earnings" over an amount equal to its alternative minimum taxable
income (before such adjustment item and the alternative tax net operating loss deduction). . Adjusted current
earnings" would include all tax exempt interest, including interest on the Bonds.
In rendering its opinion, Bond Counsel will rely upon certifications of the Company with respect to certain
material facts solely within the Company s knowledge relating to the Facilities and the application of the
proceeds of the Bonds, the Prior Bonds, the Emery May 1984 Bonds and the Sweetwater 1973 Bonds.
Ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers,
including, without limitation, corporations subject to either the environmental tax or the branch profits tax
financial institutions , certain insurance companies, certain S corporations, individual recipients of Social
Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued)
indebtedness to purchase or carry tax-exempt obligations. Prospective purchasers of the Bonds should consult
their tax advisors as to applicability of any such collateral consequences.
In the opinion of Bond Counsel, under the laws of the State of Utah, as presently enacted and construed,
interest on the Emery Bonds and Carbon Bonds will be exempt from taxes imposed by the' Utah Individual
Income Tax Act. Bond Counsel expresses- no opinion with respect to any other taxes (including the Utah
corporate franchise tax and the corporate net income tax) imposed by the State of Utah or any political
subdivision thereof. Ownership of the Emery Bonds and Carbon Bonds may result in other Utah tax
consequences to certain taxpayers, and Bond Counsel expresses no opinion regarding any such collateral
consequences arising with respect to the Emery Bonds or Carbon Bonds.
In the opinion of Bond Counsel, under present Wyoming law, the State of Wyoming imposes no income
taxes which would be applicable to the Lincoln Bonds, the Sweetwater Bonds or the Converse Bonds. Bond
Counsel expresses no opinion with respect to any other taxes imposed by the State of Wyoming or any political
subdivision thereof. Ownership of the Lincoln Bonds , the Sweetwater Bonds or the Converse Bonds may result
in other Wyoming tax consequences to certain taxpayers, and Bond Counsel expresses no opinion regarding any
such collateral consequences arising with respect to the Lincoln Bonds, the Sweetwater Bonds or the Converse
Bonds.
Under the laws, of the State of Colorado, as presently enacted and construed; so long as interest on the
Moffat Bonds is not included in gross income for federal income tax purposes, interest on the Moffat Bonds
is not included in Colorado taxable income for purposes of the income tax imposed by the State of Colorado
pursuant to Article 22 of Title 39 of the Colorado Revised Statutes, as amended, upon individuals, corporations,
and estates and trusts. No opinion is expressed regarding taxation of interest on the Moffat Bonds under any
other provisions of Colorado law. Ownership of the Moffat Bonds may result in other Colorado tax
consequences to certain taxpayers and Bond Counsel expresses no opinion regarding any such collateral
consequences arising with respect to the Moffat Bonds.
Except as described above, Bond Counsel expresses no opinion as to whether the Bonds will be subject
to any state or local taxes under applicable state or local law. Prospective purchasers of Bonds should consult
their tax advisors regarding the applicability of any such state or local taxes.
CERTAIN LEGAL MA TIERS
The validity of the Bonds will be passed upon by Chapman and Cutler, Bond Counsel, and each
Underwriter s obligation to purchase any issue of the Bonds is subject to the issuance of Bond Counsel'
opinion with respect thereto. Certain legal matters will be passed upon for the Company by Stoel Rives Boley
Jones & Grey, as counsel for the Company and for the Underwriters by Chapman and Cutler. Certain legal
matters will be passed upon for Carbon County, Utah by Gene Strate, County Attorney, for Converse County,
Wyoming by Thomas A. Burley, County Attorney, for Emery County, Utah by David A. Blackwell, County
Attorney and by Ray, Quinney & Nebeker, as Special Counsel for Emery County, for Lincoln County,
Wyoming by Joseph B. Bluemel, County Attorney. for Moffat County, Colorado by Thomas Thornberry,
County Attorney, and for Sweetwater County, Wyoming, by Sue Kearns, County and Prosecuting Attorney and
R. Stewart, Civil Deputy County and Prosecuting Attorney. The validity of the Standby Bond Purchase
Agreements will be passed upon for the Banks by their counsel, Davis, Polk & Wardwell.
Chapman and Cutler has represented other parties in matters involving subsidiaries of the Company where
the legal fees of Chapman and Cutler have been paid by such subsidiaries and has served as bond counsel for
the Prior Bonds.
MISCELLANEOUS
The attached Appendices (including the documents incorporated by reference therein) are an integral part
of this Official Statement and must be read together with all of the balance of this Official Statement.
The Issuers have not assumed nor will assume any responsibility for the accuracy or completeness of any
information contained herein (other than the material pertinent to each Issuer under "The Issuers" or
Litigation" above) or in the Appendices hereto, all of which was furnished by others.
APPENDIX A
PACIF1CORP
PacifiCorp is an electric utility that conducts a retail electric utility business through two divisions, Pacific
Power & Light Company ("Pacific Power ) and Utah Power & Light Company ("Utah Power ), and engages
in power production and sales on a wholesale basis under the name PacifiCorp. PacifiCorp is the indirect
owner, through PacifiCorp Holdings, Inc. (a wholly-owned subsidiary), of 87% of Pacific Telecom, Inc.
("Pacific Telecom ) and 100% of PacifiCorp Financial Services, Inc. ("PFS"
Pacific Power and Utah Power furnish electric service in portions of seven western states: California
Idaho, Montana, Oregon, Utah , Washington and Wyoming. Pacific Telecom, through its subsidiaries, provides
local telephone service and access to the long distance network in Alaska, seven other western states and three
midwestem states, provides intrastate and interstate long distance communication services in Alaska; provides
cellular mobile telephone services , and is engaged in sales of capacity in and operation of a submarine fiber
optic cable between the United States and Japan. PFS plans to sell substantial portions of its loan, leasing and
real estate investments over the next several years.
The principal executive offices of PacifiCorp are located at 700 NE Multnomah, Suite 1600. Portland,
Oregon 97232; the telephone number is [phone].
A V AILABLE INFORMATION
The Company is subject to the informational requirements of the Securities Exchange Act of 1934 and
in accordance therewith files reports, proxy statements and other information with the Securities and Exchange
Commission ("SEC"). Such reports, proxy statements and other information may be inspected and copied at
public reference facilities maintained by the SEC at 450 Fifth Street, N., Room 1024, Washington, D.
20549 and at the following Regional Offices at the SEC: Chicago Regional Office, 500 West Madison Street
Suite 1400, Chicago. II1inois 60661 , and New York Regional Office, 7 World Trade Center, 13th Floor, New
York, New York 10046. Copies of such material may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N. W., Washington, D.C. 20549 , upon payment of prescribed rates. The
Common Stock of the Company is listed on the New York and Pacific Stock Exchanges. Reports, proxy
statements, and other information concerning the Company may also be inspected at their respective offices at:
New York Stock Exchange, 20 Broad Street, New York, New York 10005, and Pacific Stock Exchange, 301
Pine Street, San Francisco, California 94104.
INCORPORA TION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the SEC are incorporated in this Official Statement
by reference:
(a)Annual Report on Form lO-K for the year ended December 31, 1993 (as amended by Form 10-
KIA dated June 7 , 1994);
Quarterly Reports on Form lO-Q for the quarters ended March 31 , 1994 , June 30, 1994 and
September 30, 1994; and
(b)
(c)Current Reports on Form 8-K dated January 18, 1994 , May 24, 1994, October 17 , 1994,
October 26, 1994 and November 1 , 1994.
All documents filed by the Company pursuant to Section 13 , 14 or 15(d) of the Securities Exchange Act
of 1934 after the date of this Official Statement and prior to the termination of the offering made by this
Official Statement shall be deemed to be incorporated by reference in this Official Statement and to be a part
hereof from the date of filing such documents (such documents and the documentS enumerated above, being
hereinafter referred to as "Incorporated Documents ; provided, however, that all documents filed by PacifiCorp
pursuant to Section 13 or 14 of the Exchange Act in each year during which the offering made by this Official
Statement is in effect prior to the filing with the SEC of the Company s Annual Report on Form IO-K covering
such year shall not be Incorporated Documents or be incorporated by reference in this Official Statement or be
a part hereof from and after such filing of such Annual Report on Form IO-K).
Any statement contained in an Incorporated Document shall be deemed to be modified or superseded for
purposes hereof to the extent that a statement contained herein or in any other subsequently filed Incorporated
Document 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 hereof.
The Company hereby undertakes to provide without charge to each person to whom a copy of this
Official Statement has been delivered, on the request of any such person, a copy of any or all of the
Incorporated Documents, other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference therein. Requests for such copies should be directed to Richard T. O'Brien, Vice
President, PacifiCorp, 700 N.E. Multnomah, Suite 700, Portland, Oregon 97232-4107, telephone number
[phone]. The information relating to the Company contained herein does not purport to be
comprehensive and should be read together with the information contained in the Incorporated Documents.
SELECTED FINANCIAL INFORMATION
(Dollar amounts in millions, except per share amounts)
The following selected financial information for each of the three years in the period ended December 31
1993 and the nine months ended September 30, 1993 and 1994 has been derived from the consolidated financial
statements of the Company for the respective periods. The consolidated financial statements for the three-year
period ended December 31, 1993 have been audited by Deloitte & Touche LLP, independent auditors, and the
repons of Deloitte & Touche LLP (which include explanatory notes in the consolidated financial statements)
are incorporated in this Appendix by reference. This selected financial information should be read in
conjunction with the financial statements and related notes thereto included in the Incorporated Documents.
Twelve Months Ended
December 31.1991 1992 1993
Nine Months
Ended September 30.1993 1994
616
718
342
Income Statement Data:
Revenues $3,168 242 412 528
Income from Operations (1)941 633 916 684
Income from Continuing Operations 447 150 423 310
Discontinued Operations (2)(491)
Cumulative Effect on Prior Years of a Change
in Accounting for Income Taxes
Net Income (Loss)507 (341)479 366
Preferred Stock Dividend Requirements
Earnings (Loss) on Common Stock 481 (378)440 337
Earnings (Loss) per Common Share:
Continuing Operations 1.63 .42 1.40 1.03
Discontinued Operations (1.84)
Cumulative Effect on Prior Years of a
Change in Accounting for Income Taxes
342
312
1.10
September 30, 1994
AmountCapital Structure:
Long-Term Debt and Capital Lease Obligations
Preferred Stock
Preferred Stock Subject to Mandatory Redemption
Common Equity
Total
Short-Term Debt
Long-term Debt and Capital Lease Obligations
Currently Maturing
800
367
219
3.411
797
$ 478
105
48%
100
(1)
(2)
Income before income taxes, interest, other nonoperating items, discontinued operations and cumulative
effect of a change in an accounting principle.
Discontinued operations represents PacifiCorp interests in NERCO, Inc. and an international
communications subsidiary of Pacific Telecom.
RATIOS OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges of PacifiCorp for the years ended December 31 , 1989 through 1993
and for the nine months ended September 30, 1994 calculated as required by the Commission. are 2., 2.
2.4x, 1., 2.5x and 3.0x respectively. Excluding the effect of special char-g!:s. the ratio was 1.9x for the year
1992. For the purpose of computing such ratios. "earnings " represents the aggregate of (a) income from
continuing operations, (b) taxes based on income from continuing operations, (c) minority interest in the income
of majority-owned subsidiaries that have fixed charges, (d) fixed charges and (e) undistributed losses '(income)
of less than 50% owned affiliates without loan guarantees. "Fixed charges" represents consolidated interest
charges, an estimated amount representing the interest factor in rents and preferred stock dividend requirements
of majority-owned subsidiaries, and excludes discontinued operations.
The information contained and incorporated by reference in this Appendix A to the Official Statement
has been obtained from the Company. The Issuers and the Underwriters make no representation as to
the accuracy or completeness of such information.
- -, - -,
Appendix B
Municipal Bond Insurance Policy
AMBAC Indemnity Corporation
c/o CT Corporation Systems
44 Easr Mifflin Sr., Madison, Wisconsin H703
Adminisrrarive Office:
One Stare Screer Plaza. New York, NY 10004
Telephone: [phone]
AMBAC
Issuer:Policy Number:
Bonds:PlCmium:
AMBAC Indemnity Corporation (AMBAC) A Wisconsin Srock Insurance Company
in consideration of the payment of the premium and subject ro rhe terms of chis Policy, hereby agrees ro pay r
Company of New York, as rrusree, or irs successor (rhe -Insurance Trusree ), for the benefit of Bon older
cipal of and interest on the above-described debr obligarions (rhe '"Bonds') which shall become Due ~
reason of Nonpaymenr by the Issuer.
AMBAC will make such paymentS ro rhe Insurance Trusree within one (1) business da
ment. Upon a Bondholder's presentation and surrender ro rhe Insurance Trusree of su
canceled and in bearer form and free of any adverse claim, rhe Insurance Trusree
principal and intetest which is chen Due for Paymenr bur is unpaid. Upon su
surrendered Bonds and coupons and shall be fully subrogated ro all of r Bon
In cases whelC the Bonds are issuable only in a form whereby prine; te ndholders or their assigns, the
Insurance Trustee shall disburse principal ro a Bondholder as a~r e at n and surrender ro the Insurance Trustee
of the unpaid Bond, uncanceled and flCe of any adverse claim IRS U of assignment, in fotm satisfactory to the
Insurance Trustee. duly executed by' the Bondholder or ed representative, so as to permit ownership of
such Bond ro be registered in the name of AMBAC Or ir h e e onds are issuable only in a form whereby interest
is payable ro regisrered Bondholders or their assi ns, rh Ins nce St disburse inrerest to a Bondho1det as aforesaid only
upon presenration to the Insurance Trusree of p a rh laima tH on entitled to the payment of intetesr on the Bond and
delivety ro rhe Insurance Trustee of an in of menr i fo sarisfactory to the Insurance Ttustee. duly executed by the
cIaimanr Bondholder or such Bondholder au .ze rep e, transferring to AMBAC all tightS under such Bond to receive
the interest in tespect of which rhe . u ee me ade. AMBAC shall be subrogated to all rhe Bondholders' rightS to
paymenr on regiStered Bonds r e ext t f t ins e disbursements so made.
In the evenr the crustee or yi~t as notice thar any paymenr of ptincipal of or interne on a Bond which has
become Due for Paym i~ e to a 0 older by or on behalf of rhe Issuer of the Bonds has been deemed a prderential
rransfer and there r ver fr itS regisr red owner pursuanr to the United Stares Bankruptcy Code in accordance with a final,
nonappealable or r f m renr jurisdicrion, such regisrered owner will be enritled to payment from AMBAC to rhe extenr
of such recovery s fU re Ot orherwise available.
As used herein, the h det means any person ocher rhan rhe /ssuer who, ar the time of Nonpayment, is rhe ownet of a Bond
or of a coupon apperrai ond. As used herein. -Due for Payment , when referring to the principal of Bonds, is when the stated
maruriry dare or a ma roemption dare for the applicarion of a required sinking fund installment has been reached and docs nor
refer to any earlier date on which payment is due by reason of call fot redemption (other rhan by application of required sinking fund
insrallments), acceleration or ocher advancement of maturity; and, when referring ro interest on the Bonds, is when the stated date for
payment of interest has been reached. As used herein, -Nonpaymenr" means the failure of the Issuer to have provided sufficient funds
to the paying agent for payment in full of all principal of and iRlernr on the Bonds which are Due for Payment.
This Policy is noncancelable. The premium on this Policy is nor refundable for any reason, including parmenr of the Bonds pt"ior ro
maruriry This Policy does nor insure againsr loss of any prepayment or ocher accelerarion paymenr which ar any time may become d~
in mpecr of any Bond, ocher rhan at rhe sole option of AMBAC, nor against any risk ocher than Nonpaymenr.
In wirness whereof, AMBAC has caused this Policy to be affixed with a facsimile of itS corporare se-.1 and to be signed by irs duly
aurhorizec! officers in pcsimi1e to become effective as irs original seal and signatum and binding upon AMBAC by virtue of rhe counter-signature of its duly aurhorized tqlresentative.
United States Trusr
r portion of the prin-
all be unpaid by
Effective Date:
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Authorized Represen~
Form 11506-0003 (8/92)
r .
UNITED STATES TRUST COMPANY OF NEW YORK acknowledges that it
h2s agreed (0 perfonn the duties of Insurance Trustee under this Policy.
AMBAC~AMBAC Indemnity Corporation
c/o CT Corporation Systems
44 East Mifflin Street
Madison, Wisconsin 53703
Administrative Office:
One State Street Plaza
-New York, New York 10004Endorsement
Policy issued to:Auached h' :lnd forming pari of
Effective Dale of Endorsement:
Notwithstanding the terms and provisions contained in this Policy, it is th the term "Due
for Payment" shall also mean, when referring to the principal of an nd, any date on which
the Bonds shall have been duly called for special mandatory re t n a final detennination
by a court of competent jurisdiction or an administrative age y th . er t r payable on the Bonds
to other than a substantial user or a related person is as d le gross income of the owner
thereof for federal income tax purposes under the Unit ta e Due Code of 1986, as amended,
pu.-suant 10 Section nf the Trust Indenture . 19- _ring the Bonds.
NOIhingherein contained shall be h r xtend any of the terms, conditions, provisions. agreements or
limilations of the above mentione stated.
AMBAC Indemnity Corporation
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SCO"
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Authorized Representative
Form No.: 2B.mr7 (./94)
"form 528.0002131911
-- -" - - - --- --- "
AMBAC AMBAC Indemnity Corporation
c/o CT Corporation Systems
44 East Mifflin Street
Madison, Wisconsin 53703
Administrative Office:
One St:ilte Street PI:ilZ:il
New York, New York 10004Endorsement
Policy issued to:Attached to and formin~ part of
Effective Date of Endorsement:
The Policy to which this Endorsement is attached and of which it forms a part .
that the term "Due for Payment , when referring to principal of and inter
include any date on which a mandatory redemption ' date for Unremar e
Indenture dated as of between the Issuer and
as trustee) as described in Section of said Trust Inden
ended to provide
is expanded to
in the Trust
Nothing herein contained shall be h
limitalion.~ of the above mentione
r x,end any of ,he terms, conditions. provisions, agreements or
sclled,
AMBAC Indemnity Corporation
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: ~)I y OCJU.I r" :
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~'SCO"\\~.Secretary
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Authorized Representative
Form - S2B-OOO2 (3/91)
.... -
APPENDIX C
INFORMATION REGARDING BANKS
The Bank of New York
The Bank of New York is one of the largest commercial banks in the United States. It was founded in
1784 by Alexander Hamilton, and it is the nation s oldest bank operating under its original name. The Bank
is an important lender to major U.S. and multinational corporations and to mid-sized companies nationally.
It is one of the leading retail banks in the greater New York metropolitan area, the largest provider of securities
processing services to the market and a respected trust and investment manager. The Bank of New York is
a New York state-chartered bank and a member of the Federal Reserve System. As of July 31 , 1994, The
Bank of New York operated through 278 offices in the State of New York and 24 branches and representative
offices overseas. As of July 31 , 1994, The Bank of New York had $42.7 billion in total assets and ranked as
the tenth largest bank on that basis.
Additional information relating to The Bank of New York, including its annual report, is on file at the
offices of The Bank of New York and may be obtained by contacting its Manager of Investor and Public
Relations at The Bank of New York, 28 Wall Street, New York, New York, 10286; telephone: (212) 495-
2066. The Bank of New York's most recent annual report is incorporated in this Official Statement by
reference.
The Bank of Nova Scotia
As of July 31 , 1994 , The Bank of Nova Scotia ("Scotiabank") had assets in an amount equivalent to
approximately CAD$132 billion and deposits in an amount equivalent to approximately CAD$98 billion.
Scotiabank also possessed a total risk adjusted capital ratio of 10.84% as at July 31,1994. Its net income for
the fiscal year ended October 31. 1993 was equivalent to approximately CAD$714 million.
The Bank of Nova Scotia maintains offices in 44 countries worldwide and is headquartered in Toronto,
Ontario, Canada. Corporate banking operations in the United States of America began in 1885 , and currently,
The Bank of Nova Scotia operates Scotiabank - Portland Branch, Portland, Oregon, and has other offices in
New York, Boston, Atlanta, Chicago, Houston, and San Francisco. Scotiabank - Portland Branch is aUthorized
to conduct business in the state of Oregon by the Department of Consumer and Business Services of the State
of Oregon and is subject to the regulations and periodic examination of that authority.
The Bank of Nova Scotia was founded in 1832 in Halifax , Nova Scotia, Canada, and is now one of
Canada s largest financial institutions. Common shares of Scotiabank are traded on the Vancouver, Alberta
Winnipeg, Toronto, Montreal and London stock exchanges. In addition to the corporate banking services
provided in the United States of America, Scotiabank provides corporate, investment, commerdal, and
consumer services in Canada through 1 379 offices, as well as select services throughoUt its international
banking network.
Additional information relating to The Bank of Nova Scotia, including its annual report, is on file at the
offices of Scotiabank and may be obtained by contacting its Manager - Operations at The Bank of Nova Scotia -
Portland Branch, 888 SW Fifth Avenue, Suite 750 , Portland , Oregon 97204; telephone: [phone].
Scotiabank's most recent annual report is incorporated in this Official Statement by reference.
APPENDIX D
Upon delivery of the Carbon Bonds, Chapman and Cutler, Bond Counsel, proposes, to issue
its final approving opinion in substantially the following fonn:
Law OffICes of
CHAPMAN AND CUTLER
Theodore S. Chapman
1877-1943
Henry E. Culler
1879-1959
50 South Main Street, Salt Lake City, Utah 84144-0402
FAX (80l) 533-9595
Telephone [phone]
2 Nonh Cenlral Avenue
Phoenix, Arizona 85004
(602) 2564060
111 Wesl Monroe Slreel
Chicago. Illinois 60603
[phone]
Re:365 000 Carbon County, Utah, Pollution Control
Revenue Refunding Bonds (PacifiCorp Project)
Series 1994
We hereby certify that we have examined certified copy of the proceedings of record of the
Board of County Commissioners of Carbon County, Utah (the Issuer
),
a political subdivision of
the State of Utah, preliminary to the issuance by the Issuer of its Pollution Control Revenue
Refunding Bonds (PacifiCorp Project) Series 1994, in the aggregate principal amount of $9,365,000
(the Bonds ). The Bonds are being issued pursuant to the provisions of the Utah Industrial Facilities
and Development Act, Title 11 , Chapter 17, Utah Code Annotated 1953, as amended and
supplemented (the Act
),
for the purpose of refunding the Issuer s Pollution Control Revenue Bonds
(Utah Power & Light Company Project) Series A of 1974 now outstanding in the amount of
$9,365,000 (the Refunded Bonds ). The Refunded Bonds were issued for the purpose of financing
a portion of the cost of solid waste disposal or air or water pollution control facilities (the ProjeCt
at the Carbon coal-fired electric generating plant (the Station in Carbon County, Utah for use by
Utah Power & Light Company, a Utah corporation which, subsequent to the issuance of the Refunded
Bonds, merged with PacifiCorp, an Oregon corporation (the Company
).
The proceeds of the
Bonds , together with other moneys to be provided by the Company, are to be deposited with the
trustee for the Refunded Bonds to provide for the payment of the Refunded Bonds.
The Bonds mature on November 1 , 2024, bear interest from time to time computed as set
forth in each of the Bonds and are subject to purchase and redemption prior to maturity at the times,
in the manner and upon the tenns set forth in each of the Bonds. The Bonds are issuable in
AUthorized Denominations as provided in the hereinafter-defined Indenture as fully-registered Bonds
without coupons.
From such examination ' of the proceedings of the Board of County Commissioners of the
Issuer referred to above and from an examination of the Act, we are of the opinion that such
proceedings show lawful authority for said issue of Bonds under the laws of the State of Utah now
in force.
Pursuant to a Loan Agreement , dated as of November 1, 1994 (the Loan Agreement"),
and between the Company and the Issuer, the Issuer has agreed to loan the proceeds from the sale
of the Bonds to the Company for the purpose of refunding the Refunded Bonds, and the Company
has agreed to pay amounts at least sufficient to pay the principal of, premium, if any, and interest
on the Bonds when due, whether at stated maturity, call for redemption or acceleration. The Loan
Agreement (an executed counterpart of which has been examined by us) has, in our opinion, been
duly authorized, executed and delivered by the Issuer, and, assuming the due authorization, execution
and delivery by the Company, is a valid and binding obligation of the Issuer, enforceable in
accordance with its terms, subject to the qualification that the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors
rights generally or usual equity principles in the event equitable remedies should be sought.
We have also examined an executed counterpart of the Trust Indenture, dated as of
November 1 , 1994 (the Indenture
),
by and between the Issuer and The First National Bank of
Chicago, as Trustee (the "Trustee
),
securing the Bonds and setting forth the covenants and
undertakings of the Issuer in connection with the Bonds and making provision under certain
conditions for the remarketing of the Bonds by a Remarketing Agent (the Remarketing Agent
),
for
the fixing of variable interest rates to be borne by the Bonds from time to time , which variable
interest rate may be a Daily Interest Rate, a Weekly Interest Rate or a Flexible Interest Rate (each
as defined in the Indenture), and for the conversion of the interest rate borne by the Bonds to a
different variable interest rate or to a Term Interest Rate (as defined in the Indenture) under certain
conditions. The Indenture provides that the Bonds bear interest at a Daily Interest Rate until
conversion to a different variable interest rate or to a Term Interest Rate. Under the Indenture, the
revenues derived by the Issuer under the Loan Agreement, together with -certain of the rights of the
Issuer thereunder, are pledged and assigned to the Trustee as security for the Bonds. From such
examination, we are of the opinion that the proceedings of the Board of County Commissioners of
the Issuer referred to above show lawful authority for the execution and delivery of the Indenture
that the Indenture is a valid and binding obligation of the Issuer, enforceable in accordance with its
terms, subject to the qualification that the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights
generally or usual equity principles in the event equitable remedies should be sought, that the Bonds
have been validly issued under. the Indenture, and that all requirements under the Indenture precedent
to delivery of the Bonds have been satisfied.
In connection with the issuance of the Bonds, the Company has entered into a Standby Bond
Purchase Agreement dated as of November 1, 1994 (the Standby Purchase Agreement
),
with The
Bank of New York (the Bank"). Pursuant to the Standby Purchase Agreement, the Bank has agreed
to provide (a) an amount sufficient to pay the purchase price or portion of the purchase price equal
to the principal amount of Bonds delivered to the Trustee for purchase and not remarketed, plus (b)
an amount equal to 62 days' accrued interest on the outstanding Bonds to pay the portion of the
purchase price of the Bonds delivered to the Trustee equal to the accrued interest, if any, on such
Bonds. Execution of the Standby Purchase Agreement , however, does not release the Company from
its payment obligation under the Loan Agreement. The stated expiration date of the Standby Purchase
Agreement is November 17, 1999, subject to the provisions of the Standby Purchase Agreement.
For the purpose of securing the Company s obligation to repay the loan of the proceeds of
sale of the Bonds made to the Company by the Issuer pursuant to the Loan Agreement, the Company
has delivered to the Trustee, in trust for the benefit of the holders of the Bonds, its First Mortgage
and Collateral Trust Bonds in the aggregate principal amount of $9 365 000 (the First Mortgage
Bonds ), issued by the Company under the Mortgage and Deed of Trust, dated as of January 9,
1989, between the Company and Chemical Bank, as successor trustee, as supplemented and amended
by ten supplemental indentures , including a Tenth Supplemental Indenture dated as of August 1 , 1994
(collectively, the Mortgage
).
Pursuant to the provisions of the Indenture, payments by the
Company representing principal of and interest on the First Mortgage Bonds are deposited into the
Bond Fund created under the Indenture and are used to pay the principal of and interest on the Bonds
on an equal and ratable basis as the same become due. The First Mortgage Bonds are being issued
as a part of a series of $216,470,000 aggregate principal of First Mortgage and Collateral Trust
Bonds pursuant to the Mortgage on the date hereof to secure the Bonds and five other issues of
pollution control revenue refunding bonds being issued on the date hereof by Emery County, Utah,
Converse County, Wyoming, Lincoln County, Wyoming, Sweetwater County, Wyoming and Moffat
County, Colorado (collectively, the "Other Issuers ), to refinance certain pollution control or solid
waste disposal facilities (the "Facilities ) for the benefit of the Company.
We further certify that we have examined the form of bond prescribed in the Indenture and
find the same in due form of law and in our opinion the Bonds, to the amount named , are valid and
legally binding upon the Issuer according to the import thereof and, as provided in the Indenture and
tbe Bonds, are payable by the Issuer solely out of payments to be made by the Company under the
--'.--- .-
Loan Agreement and all moneys and investments held by the Trustee under the Indenture or
otherwise available to the Trustee for the payment thereof.
Subject to the condition that the Company, the Issuer and the Other Issuers comply with
certain covenants made to satisfy pertinent requirements of the Internal Revenue Code of 1954, as
amended (the "1954 Code
),
and the Internal Revenue Code of 1986, we are of the opinion that
under present law interest on the Bonds is not includible in gross income of the owners thereof for
federal income tax purposes, except for interest on any Bond for any period during which such Bond
is owned by a person who is a substantial user of the Project or the Facilities or any person
considered to be related to such person (within the meaning of Section 1O3(b)(l3) of the 1954 Code),
and interest on the Bonds will not be treated as an item of tax preference in computing the alternative
minimum tax for individuals and corporations. Interest on the Bonds will be taken into account,
however, in computing an adjustment used in determining the alternative minimum tax for certain
corporations. Failure to comply with certain of such covenants could cause the interest on the Bonds
to be included in gross income retroactive to the date of issuance of the Bonds. Ownership of the
Bonds may result in other federal tax consequences to certain taxpayers; we express no opinion
regarding any such collateral consequences arising with respect to the Bonds. In rendering this
opinion, we have relied upon certifications of even date herewith of the Company relating to the
Station, the Project and the application of the proceeds of the Refunded Bonds and the proceeds of
the Bonds with respect to certain material facts solely within the knowledge of the Company.
In our opinion, under the laws of the State of Utah as presently enacted and construed,
interest on the Bonds will be exempt from taxes imposed by the Utah Individual Income Tax Act.
No opinion is expressed with respect to any other taxes imposed by the State of Utah or any political
subdivision thereof. Ownership of the Bonds may result in other Utah tax consequences to certain
taxpayers; we express no opinion regarding any such collateral consequences arising with respect to
the Bonds.
We are not passing upon the Standby Purchase Agreement or any action taken by the Bank
in connection,therewith. The validity of the Standby Purchase Agreement has been passed upon by
Davis Polk & Wardwell.
Stoel Rives Boley Jones & -Grey, counsel to the Company, has delivered an opinion of even
date herewith concerning the obligations of the Company under the Loan Agreement. In rendering
this opinion, we have relied upon said opinion with respect to, among other things: (i) the due
organization of the Company, (ii) the good standing or existence of the Company in the States of
Utah and Oregon , (iii) the approval of the execution and delivery by the Company of the Loan
Agreement by all necessary regulatory authorities exercising jurisdiction over the Company, (iv) the
corporate power of the Company to enter into, and the due authorization, ex.ecution and delivery by
the Company of, the Loan Agreement, and (v) the binding effect of the Loan Agreement on the
Company.
Stool Rives Boley Jones & Grey has also rendered an opinion of even date herewith, as to
the due authorization, execution and delivery of the First Mortgage Bonds and the Mortgage, the
validity and binding effect thereof, the enforceability thereof in accordance with their respective terms
and the requisite issuance of all orders, approvals, authorizations and consents of any court or
administrative or governmental body with respect to the First Mortgage Bonds.
Gene Strate, County Attorney of the Issuer, has delivered an opinion of even date herewith
with respect to the obligations of the Issuer under the Bonds, the Loan Agreement and the Indenture.
We express no opinion as to the title to, the description of, or the existence of any liens
charges or encumbrances on the Project or the Station.
CHAPMAN AND CUTLER
ApPElIi"DIX E
Upon delivery of the Emery Bonds, Chapman and Cutler, Bond Counsel, proposes to issue
its final approving opinion in substantially the following form:
Law Offices of
CHAPMAN AND CUTLER
Theodore S. Chapman
1877-1943
Henry E. Culler
1879.1959
50 South Main Street, Salt Lake City, Utah 84144-0402
FAX [phone]
Telephone [phone]
2 Nonh Cenlral Avenue
Phoenix. Arizona 85004
[phone]
III Wesl Monroe Sucet
Chicago. Illinois 60603
(312) 845-jOOO
Re:$121 940,000 Emery County, Utah, Pollution Control
Revenue Refunding Bonds (PacifiCorp Project)
Series 1994
We hereby certify that we have examined certified copy of the proceedings of record of the
Board of County Commissioners of Emery County, Utah (the Issuer
),
a political subdivision of the
State of Utah, preliminary to the issuance by the Issuer of its Pollution Control Revenue Refunding
Bonds (PacifiCorp Project) Series 1994, in the aggregate principal amount of $121 940 000 (the
Bonds ). The Bonds are being issued pursuant to the provisions of the Utah Industrial Facilities and
Development Act, Title 11, Chapter 17, Utah Code Annotated 1953, as amended and supplemented
(the Act
),
for the purpose of refunding the Issuer s Pollution Control Revenue Bonds (Utah Power
& Light Company Proj~ct) Series A of 1974, Pollution Control Revenue Bonds, 6 3/8 % Series due
November 1, 2006 (Utah Power & Light Company Project), Pollution Control Revenue Bonds,
90% Series due April 1 , 2008 (Utah Power & Light Company Project) and Pollution Control
Revenue Bonds (Utah Power & Light Company Project), 10.70% Series Due September 1 , 2014
collectively outstanding in the amount of $121 940 000 (collectively, the Refunded Bonds
).
The
Refunded Bonds were issued for the . purpose of financing or refinancing a portion of the cost of
certain solid waste disposal and air or water pollution control facilities (the Projects ) at the Hunter
coal-fired steam electric generating plant (formerly known as the Emery Generating plant) and the
Huntington coal-fired electric generating plant (collectively, the Stations in Emery County, Utah
for use by Utah Power & Light Company, a Utah corporation which, subsequent to the issuance of
the Refunded Bonds, merged with PacifiCorp, an Oregon corporation (the Company
).
The
proceeds of the Bonds, together with other moneys to be provided by the Company, are to be
deposited with the respective trustee for each series of Refunded Bonds to provide for the payment
of the Refunded Bonds.
The Bonds mature on November I , 2024, bear interest from time to time -computed as set
forth in each of the Bonds and are subject to purchase and redemption prior to maturity at the times,
in the manner and upon the terms set forth in each of the Bonds. The Bonds are issuable in
Authorized Denominations as provided in the hereinafter-defined Indenture as fully-registered Bonds
without coupons.
From such examination of the proceedings of the Board of County Conunissioners of the
Issuer referred to above and from an examination of the Act, we are of the opinion that such
proceedings show lawful authority for said issue of Bonds under the laws of the State of Utah now
in force.
Pursuant to a Loan Agreement , dated as of November 1 , 1994 (the Loan Agreement
),
and between the Company and the Issuer, the Issuer has agreed to loan the proceeds from the sale
of the Bonds to the Company for the purpose of refunding the Refunded Bonds, and the Company
has agreed to pay amounts at least sufficient to pay the principal of, premium, if any, and interest
on the Bonds when due , whether at stated matUrity, call for redemption or acceleration. The Loan
Agreement (an executed counterpart of which has been examined by us) has, in our opinion, been
duly authorized, executed and delivered by the Issuer, and , assuming the due aUthorization, execUtion
and delivery by the Company, is a valid and binding obligation of the Issuer, enforceable in
accordance with its terms, subject to the qualification that the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization and other similar laws relating to the enfo((:ement of creditors
rights generally or usual equity principles iiuhe event equitable remedies should be sought.
We have also examined an executed counterpart of the Trust Indenture, dated as of
November 1 , 1994 (the Indenture
),
by and between the Issuer and The First National Bank of
Chicago. as Trustee (the Trustee
),
securing the Bonds and setting forth the covenants and
undertakings of the Issuer in connection with the Bonds and making provision under certain
conditions for the remarketing of the Bonds by a Remarketing Agent (the Remarketing Agent
),
for
the fixing of variable interest rates to be borne by the Bonds from time to time, which variable
interest rate may be a Daily Interest Rate, a Weekly Interest Rate or a Flexible Interest Rate (each
as defined in the Indenture), and for the conversion of the interest rate borne by the Bonds to a
different variable interest rate or to a Term Interest Rate (as defined in the Indenture) under certain
conditions. The Indenture provides that the Bonds bear interest at a Daily Interest Rate until
conversion to a different variable interest rate or to a Term Interest Rate. Under the Indenture, the
revenues derived by the ISSljer under the Loan Agreement, together with certain of the rights of the
Issuer thereunder, are pledged and assigned to the Trustee as security for the Bonds. From such
examination, we are of the opinion that the proceedings of the Board of County Conunissioners of
the Issuer referred to above show lawful aUthority for the execution and delivery of the Indenture
that the Indenture is a valid and binding obligation of the Issuer, enforceable in accordance with its
terms , subject to the qualification that the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization and other similar laws relating to the enforcement of creditors ' rights
generally or usual equity principles in the event equitable remedies should be sought, that the Bonds
have been validly issued under the Indenture, and that all requirements under the Indenture precedent
to delivery of the Bonds have been satisfied.
In connection with the issuance of the Bonds, the Company has entered into a Standby Bond
Purchase Agreement dated as of November 1 , 1994 (the Standby Purchase Agreement
),
with The
Bank of Nova Scotia (the Bank"
).
Pursuant to the Standby Purchase Agreement, the Bank has
agreed to provide (a) an amount sufficient to pay the purchase price or portion of the purchase price
equal to the principal amount of Bonds delivered to the Trustee for purchase and not remarketed, plus
(b) an amount equal to 62 days' accrued interest on the outstanding Bonds to pay the portion of the
purchase price of the Bonds delivered to the Trustee equal to the accrued interest, if any, on such
Bonds. Execution of the Standby Purchase Agreement, however, does not release the Company from
its payment obligation under the Loan Agreement. The stated expiration date of the Standby
Purchase Agreement is November 17, 1999, subject to the provisions of the Standby Purchase
Agreement.
For the purpose of securing the Company s obligation to repay the loan of the proceeds of
sale of the Bonds made to the Company by the Issuer pursuant to the Loan Agreement, the Company
has delivered to the Trustee, in trust for the benefit of the holders of the Bonds, its First Mortgage
and Collateral Trust Bonds in the aggregate principal amount of $121 940,000 (the First Mortgage
Bonds ), issued by the Company under the Mortgage and Deed of Trust, dated as of January 9,
1989, between the Company and Chemical Bank, as successor trustee, as supplemented and amended
by ten supplemental indentures, including a Tenth Supplemental Indenture dated as of August 1 , 1994
(collectively, the Mortgage
).
Pursuant to the provisions of the Indenture, payments by the
Company representing principal of and interest on the First Mortgage Bonds are deposited into the
Bond Fund created under the Indenture and are used to pay the principal of and interest on the Bonds
on an equal and ratable basis as the same become due. The First Mortgage Bonds are being issued
as a part of a series of $216,470,000 aggregate principal of First Mortgage and Collateral Trust
Bonds pursuant to the Mortgage on the date hereof to secure the Bonds and five other issues of
. pollution control revenue refunding bonds being issued on the date hereof by Carbon County, Utah,
Converse County, Wyoming. Lincoln County, Wyoming, Sweetwater County, Wyoming and Moffat
County, Colorado (collectively, the "Other Issuers ), to refinance certain pollution -control or solid
waste disposal facilities (the "Facilities ) for the benefit of the Company.
We further certify that we have examined the fonn of bond prescribed in the Indenture and
find the same in due form of law and in our opinion the Bonds, to the amount named, are valid and
legally binding upon the Issuer according to the import thereof and, as provided in the Indenture and
the Bonds, are payable by the Issuer solely out of payments to be made by the Company under the
Loan Agreement and all moneys and investments held by the Trustee under the Indenture or
otherwise available to the Trustee for the payment thereof.
Subject to the condition that the Company, the Issuer and the Other Issuers comply with
certain covenants made to satisfy pertinent requirements of the Internal Revenue Code of 1954, as
amended (the "1954 Code
),
and the Internal Revenue Code of 1986, we are of the opinion that
under present law interest on the Bonds is not includible in gross income of the owners thereof for
federal income tax purposes, except for interest on any Bond for any period during which such Bond
is owned by a person who is a substantial user of any of the Projects or the Facilities or any person
considered to be related to such person (within the meaning of Section 103(b)(l3) of the 1954 Code),
and interest on the Bonds will not be treated as an item of tax preference in computing the alternative
minimum tax for individuals and corporations. Interest on the Bonds will be taken into account
however, in computing an adjustment used in determining the alternative minimum tax for certain
corporations. Failure to comply with certain of such covenants could cause the interest on the Bonds
to be included in gross income retroactive to the date of issuance of the Bonds. Ownership of the
Bonds may result in other federal tax consequences to certain taxpayers; we express no opinion
regarding any such collateral consequences arising with respect to the Bonds. In rendering this
opinion, we have relied upon certifications of even date herewith of the Company relating to the
Stations, the Projects and the application of the proceeds of the Bonds, the Refunded Bonds and the
Issuer s $16 750,000 Pollution Control Revenue Bonds (Utah Power & Light Company Project),
dated May 11 , 1984, with respect to certain material facts solely within the knowledge of the
Company.
In our opinion, under the laws of the State of Utah as presently enacted and construed
interest on the Bonds will be exempt from taxes imposed by the Utah Individual Income Tax Act.
No opinion is expressed with respect to any other taxes imposed by the State of Utah or any political
subdivision thereof. Ownership of the Bonds may result in other Utah tax consequences to certain
taxpayers; we express no opinion regarding any such collateral consequences arising with respect to
the Bonds.
We are not passing upon the Standby Purchase Agreement or any action taken by the Bank
in connection therewith. The validity of the Standby Purchase Agreement has been passed upon by
Davis Polk & Wardwell.
Stoel Rives Boley Jones & Grey, counsel to the Company, has delivered an opinion of evendate herewith concerning the obligations of the Company under the Loan Agreement. In renderingthis opinion, we have relied upon said opinion with respect to, among other things: (i) the due
organization of the Company, (ii) the good standing or existence of the Company in the States of
Utah and Oregon, (Hi) the approval of the execution and delivery by the Company of the Loan
Agreement by all necessary regulatory authorities exercising jurisdiction over the Company, (iv) the
corporate power of the Company to enter into, and the due authorization, execution and delivery by
the Company of, the Loan Agreement, and (v) the binding effect of the Loan Agreement on the
Company.
Stoel Rives Boley Jones & Grey has also rendered an opinion of even date herewith: as to
the due authorization, execution and delivery of the First Mortgage Bonds and the Mortgage, thevalidity and binding effect thereof, the enforceability thereof in accordance with their respective terms
and the requisite issuance of all orders, approvals, authorizations and consents of any court or
administrative or governmental body with respect to the First Mortgage Bonds.
Ray, Quinney & Nebe~er, speci~l counsel to the Issuer, ~nd I?avid A. Blackwell , County
Attorney of the Issuer, have delivered opinIOns of even date herewIth wIth respect to the obligations
of the Issuer under the Bonds, the Loan Agreement and the Indenture.
We express no opinion as to the title to, the description or the existence of any liens,
charges or encumbrances on the Projects onhe Stations.
CHAPMAN AND CUTLER
E-4
" .. '. ' . - -- - ' . '
ApPENDIX F
Upon delivery of the Converse Bonds, Chapman and Cutler, Bond Counsel , proposes to issue
its final approving opinion in substantially the following form:
Law Offices of
CHAPMAN AND CUTLER
Theodore S. Chapman
1877-1943
Henry E. Culler
1879-1959
50 South Main Street, Salt Lake City, Utah 84144-0402
FAX [phone]
Telephone (80t) 533-0066
2 Nonh Cemral Avenue
Phoenix. Arizona 85004
[phone]
111 West Monroe Street
Chicago, Illinois 60603
[phone]
$8,190 000 Converse County, Wyoming,
Pollution Control Revenue Refunding Bonds
(PacifiCorp Project) Series 1994
We hereby certify that we have examined certified copy of the proceedings of record of the
Board of County Commissioners of Converse County, Wyoming (the Issuer"), a political subdivision
of the State of Wyoming, preliminary to the issuance by the Issuer of its Pollution Control R-evenue
Refunding Bonds (PacifiCorp Project) Series 1994, in the aggregate principal amount of $8,190 000
(the Bonds
).
The Bonds are being issued pursuant to the provisions of Sections 15-701 to 15-
710, inclusive, Wyoming Statutes (1977), as amended and supplemented (the Act
),
for the
purpose of refunding the Issuer s Collateralized Pollution Control Revenue Bonds (Pacific Power &
Light Company Project) Series 1977 now outstanding in the amount of $8,190,000 (the Refunded
Bonds ). The Refunded Bonds were issued for the purpose of financing a ponion of the cost
water and air pollution control facilities (the Project at the Dave Johnston Plant (the Station
Converse County, Wyoming, for use by Pacific Power & Light Company, a Maine corporation
which, subsequent to the issuance of the Refunded Bonds, merged with PacifiCorp, an Oregon
corporation (the Company
).
The proceeds of the Bonds, together with other moneys to be provided
by the Company, are to be deposited with the trustee for the Refunded Bonds to provide for the
payment of the Refunded Bonds.
Re:
The Bonds mature on November 1 , 2024 , bear interest from time to time computed as set
forth in each of the Bonds and are subject to purchase and redemption prior to maturity at the times,
in the manner and upon the terms set forth in each of the Bonds. The Bonds are issuable in
Authorized Denominations as provided in the hereinafter-defined Indenture as fully-registered Bonds
without coupons.
From such examination of the proceedings of the Board of County Commissioners of the
Issuer referred to above and from an examination of the Act , we are of the opinion that such
proceedings show lawful authority for said issue of Bonds under the laws of the State of Wyoming
now in force.
Pursuant to a Loan Agreement, dated as of November 1 , 1994 (the Loan Agreement ), by
and between the Company and the Issuer, the Issuer has agreed to loan the proceeds from the sale
of the Bonds to the Company for the purpose of refunding the Refunded Bonds, and the Company
has agreed to pay amounts at least sufficient to pay the principal of, premium, if any, and interest
on the Bonds when due, whether at stated maturity, call for redemption or acceleration. The Loan
Agreement (an executed counterpart of which has been examined by us) has, in our opinion, been
duly authorized, executed and delivered by the Issuer, and, assuming the due authorization, execution
and delivery by the Company, is a valid and binding obligation of the Issuer, enforceable in
accordance with its terms , subject to the qualification that the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors
rights generally or usual equity principles in the event equitable remedies should be sought.
We have also examined an executed counterpart of the Trust Indenture, dated as of
November 1 , 1994 (the Indenture ), by and between the Issuer and The First National Bank of
Chicago , as Trustee (the '"Trustee ), securing the Bonds and setting forth the covenants and
undertakings of the Issuer in connection with the Bonds and making provision under certain
conditions for the remarketing of the Bonds by a Remarketing Agent (the Remarketing Agent
),
for
the fixing of variable interest rates to be borne by the Bonds from time to time, which variable
interest rate may be a Daily Interest Rate, a Weekly Interest Rate or a Flexible Interest Rate (each
as defined in the Indenture), and for the conversion of the interest rate borne by the Bonds to a
different variable interest rate or to a Term Interest Rate (as defined in the Indenture) under certain
conditions. The Indenture provides that the Bonds bear interest at a Daily Interest Rate until
conversion to a different variable interest rate or to a Term Interest Rate. Under the Indenture, the
revenues derived by the Issuer under the Loan Agreement, together with certain of the rights of the
Issuer thereunder, are pledged and assigned to the Trustee as security for the Bonds. From such
examination. we are of the opinion that the proceedings of the Board of County Commissioners of
the Issuer referred to above show lawful authority for the execution and delivery of the Indenture,
that the Indenture is a valid and binding obligation of the Issuer, enforceable in acr:ordance with its
terms , subject to the qualification that the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights
generally or usual equity principles in the event equitable remedies should be sought, that the Bonds
have been validly issued under the Indenture, and that all requirements under the Indenture precedent
to delivery of the Bonds, have been satisfied.
In connection with the issuance of the Bonds, the Company has entered into a Standby Bond
Purchase Agreement dated as of November 1 , 1994 (the Standby Purchase Agreement
),
with The
Bank of New York (the Bank"
).
Pursuant to the Standby Purchase Agreement, the Bank has agreed
to provide (a) an amount sufficient to pay the purchase price or portion of the purchase price equal
to the principal amount of Bonds delivered to the Trustee for purchase and not remarketed , plus (b)
an amount equal to 62 days' accrued interest on the outstanding Bonds to pay the portion of the
purchase price of the Bonds delivered to the Trustee equal to the accrued interest, if any, on such
Bonds. ExecUtion of the Standby Purchase Agreement, however , does not release the Company from
its payment obligation under the Loan Agreement. The stated expiration date of the Standby Purchase
Agreement is November 17 , 1999, subject to the provisions of the Standby Purchase Agreement.
For the purpose of securing the Company s obligation to repay the loan of the proceeds of
sale of the Bonds made to the Company by the Issuer pursuant to the Loan Agreement, the Company
has delivered to the Trustee, in trust for the benefit of the holders of the Bonds, its First Mortgage
and Collateral Trust Bonds in the aggregate principal amount of $8 190 000 (the First Mortgage
Bonds"
),
issued by the Company under the Mortgage and Deed of Trust, dated as of January 9,
1989, between the Company and Chemical Bank, as successor trustee, as supplemented and amended
by ten supplemental indentures , including a Tenth Supplemental Indenture dated as of August 1 , 1994
(collectively, the Mortgage
).
Pursuant to the provisions of the Indenture, payments by the
Company representing principal of and interest on the First Mortgage Bonds are deposited into the
Bond Fund created under the Indenture and are used to pay the principal of and interest on the Bonds
on an equal and ratable basis as the same become due. The First Mortgage Bonds are being issued
as a part of a series of $216 470,000 aggregate principal of First Mortgage and Collateral Trust
Bonds pursuant to the Mortgage on the date hereof to secure the Bonds and five other issues of
pollution control revenue refunding bonds being issued on the date hereof by Emery County, Utah
Carbon County, Utah , Lincoln County, Wyoming, Sweetwater County, Wyoming and Moffat County,
Colorado (collectively, the "Other Issuers ), to refinance certain pollution control or solid waste
disposal facilities (the "Facilities ) for the benefit of the Company.
We further certify that we have examined the form of bond prescribed in the Indenture and
find the same in due fonn of law and in our opinion the Bonds, to the amount named, are valid and
legally binding upon the Issuer according to the import thereof and, as provided in the Indenture and
the Bonds, are payable by the Issuer solely out of payments to be made by the Company under the
Loan Agreement and all moneys and investmentS held by the Trustee under the Indenture or
otherwise available to the Trustee for the payment thereof.
Subject to the condition that the Company, the Issuer and the Other Issuers comply with
certain covenants made to satisfy pertinent requirements of the Internal Revenue Code of 1954, as
amended (the "1954 Code
),
and the Internal Revenue Code of 1986, we are of the opinion that
under present law interest on the Bonds is not includible in gross income of the owners thereof for
federal income tax purposes, except for interest on any Bond for any period during which such Bond
is owned by a person who is a substantial user of the Project or the Facilities or any person
considered to be related to such person (within the meaning of Section 1O3(b)(l3) of the 1954 Code),
and interest on the Bonds will not be treated as an item of tax preference in computing the alternative
minimum tax for individuals and corporations. Interest on the Bonds will be taken into account
however, in computing an adjustment used in determining the alternative minimum tax for 1::ertain
corporations. Failure to comply with certain of such covenants could cause the interest on the Bonds
to be included in gross income retroactive to the date of issuance of the Bonds. Ownership of the
Bonds may result in other federal tax consequences to certain taxpayers; we express no opinion
regarding any such collateral consequences arising with respect to the Bonds. In rendering this
opinion, we have relied upon certifications of even date herewith of the Company relating to the
Station, the Project and the application of the proceeds of the Refunded Bonds and the proceeds of
the Bonds with respect to certain material factS solely within the knowledge of the Company.
In our opinion , under present Wyoming law, the State of Wyoming imposes no income taxes
that would be applicable to interest on the Bonds. No opinion is expressed with respect to any other
taxes imposed by the State of Wyoming or any political subdivision thereof. Ownership of the Bonds
may result in other Wyoming tax consequences to certain taxpayers; we express no opinion regarding
any such collateral consequences arising with respect to the Bonds.
We are not passing upon the Standby Purchase Agreement or any action taken by the Bank
in connection therewith. The validity of the Standby Purchase Agreement has been passed upon by
Davis Polk & Wardwell.
Stoel Rives Boley Jones & Grey, counsel to the Company, has delivered an opinion of even
date herewith concerning the obligations of the Company under the Loan Agreement. In rendering
this opinion, we have relied upon said opinion with respect to, among other things: (i) the due
organization of the Company, (ii) the good standing or existence of the Company in the States of
Wyoming and Oregon, (iii) the approval of the execution and delivery by the Company of the Loan
Agreement by all necessary regulatory authorities exercising jurisdiction over the Company, (iv) the
corporate power of the Company to enter into, and the due authorization, execution and delivery by
the Company of, the Loan Agreement, and (v) the binding effect of the Loan Agreement on the
Company.
Stoel Rives Boley Jones & Grey has also rendered an opinion of even date herewith, as to
the due authorization, execUtion and delivery of the First Mortgage Bonds and the Mortgage, the
validity and binding effect thereof, the enforceability thereof in accordance with their respective terms
and the requisite issuance of all orders, approvals, authorizations and consents of any court or
administrative of governmental body with respect to the First Mortgage Bonds.
Thomas A. Burley, Esq., County Attorney of the Issuer, has delivered an opinion of even
date herewith with respect to the obligations of the Issuer under the Bonds , the Loan Agreement and
the Indenture.
We express no opinion as to the title to, the description of, or the existence of any liens,
charges or encumbrances on the Project or the Station.
CHAPMAN AND CUTLER
APPENDIX G
Upon delivery of the Lincoln Bonds, Chapman and Cutler, Bond Counsel, proposes to issue
its final approving opinion in substantially the following form:
,;,!~,
Law Offices of
CHAPMAN AND CUTLER
Theodore S. Chapman
1877-1943
Henrv E. Curler
1879:1959
50 South Main Street, Salt Lake City, Utah 84144-0402
FAX [phone]
Telephone (80l) 533-0066
2 Nonh Central Avenue
Phoenix. Arizona 85004
[phone]
11 Wesl Monroe Streci
Chicago. Illinois 60603
(312) 845.)000
$15 060 000 Lincoln County, Wyoming,
Pollution Control Revenue Refunding Bonds
(PacifiCorp Project) Series 1994
We hereby certify that we have examined certified copy of the proceedings of record of the
Board of County Commissioners of Lincoln County, Wyoming (the Issuer
),
a political subdivision
of the State of Wyoming, preliminary to the issuance by the Issuer of its Pollution Control Revenue
Refunding Bonds (PacifiCorp Project) Series 1994 , in the aggregate principal amount ofS15,060,OOO
(the Bonds
).
The Bonds are being issued pursuant to the provisions of Sections 15-701 to 15-
710, inclusive , Wyoming Statutes (1977), as amended and supplemented (the Act
),
for the
purpose of refunding the Issuer s Pollution Control Revenue Bonds (Utah Power & Light Company
Project) Series A of 1974 now outstanding in the amount of $15,060,000 (the Refunded Bonds"
The Refunded Bonds were issued for the purpose of financing a portion of the cost of solid waste
disposal or air pollution control facilities (the
H Project at the Naughton coal-fired electric generating
plant (the Station in Lincoln County, Wyoming, for use by Utah Power & Light Company, a
Utah corporation which, subsequent to the issuance of the Refunded Bonds , merged with PacifiCorp,
an Oregon corporation (the Company H
).
The proceeds of the Bonds, together with other moneys
to be provided by the Company, are to be deposited with the trustee for the Refunded Bonds to
provide for the payment of the Refunded Bonds.
Re:
The Bonds mature on November 1, 2024, bear interest from time to time computed as set
forth in each of the Bonds and are subject to purchase and redemption prior to maturity at the times
in the manner and upon the terms set forth in each of the Bonds. The Bonds are issuable in
Authorized Denominations as provided in the hereinafter-defined Indenture as fully-registered Bonds
without coupons.
From such examination of the proceedings of the Board of County Commissioners of the
Issuer referred to above and from an examination of the Act, we are of the opinion that such
proceedings show lawful authority for said issue of Bonds under the laws of the State of Wyoming
now in force.
Pursuant to a Loan Agreement, dated as of November I , 1994 (the Loan Agreement
),
and between the Company and the Issuer. the Issuer has agreed to loan the proceeds from the sale
of the Bonds to the Company for the purpose of refunding the Refunded Bonds, and the Company
has agreed to pay amounts at least sufficient to pay the principal of, premium, if any, and interest
on the Bonds when due, whether at stated maturity, call for redemption or acceleration. The Loan
Agreement (an executed counterpart of which has been examined by us) has, in our opinion, been
duly authorized, executed and delivered by the Issuer, and, assuming the due authorization, execution
and delivery by the Company, is a valid and binding obligation of the Issuer, enforceable in
accordance with its terms, subject to the qualification that the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization and other similar laws relating to the enfor-cement of (:reditors
rights generally or usual equity principles in the event equitable remedies should be sought.
We have also examined an executed counterpart of the Trust Indenture , dated as of
November 1 , 1994 (the Indenture
),
by and between the Issuer and The First National Bank of
Chicago, as Trustee (the Trustee
),
securing the Bonds and setting forth the covenants and
undertakings of the Issuer in connection with the Bonds and making provision under certain
conditions for the remarketing of the Bonds by a Remarketing Agent (the Remarketing Agent
),
for
the fixing of variable interest rates to be borne by the Bonds from time to time, which variable
interest rate may be a Daily Interest Rate, a Weekly Interest Rate or a Flexible Interest Rate ~.each
as defined in the Indenture), and for the conversion of the interest rate borne by the Bonds to a
different variable interest rate or to a Term Interest Rate (as defined in the Indenture) under certainconditions. The Indenture provides that the Bonds bear interest at a Daily Interest Rate untilconversion to a different variable interest rate or to a Term Interest Rate. Under the Indenture, the
revenues derived by the Issuer under the Loan Agreement, together with certain of the rights of the
Issuer thereunder, are pledged and assigned to the Trustee as security for the Bonds. From such
examination, we are of the opinion that the proceedings of the Board of County Commissioners of
the Issuer referred to above show lawful authority for the execution and delivery of the Indenture
that the Indenture is a valid and binding obligation of the Issuer, enforceable in accordance with its
terms, subject to the qualification that the enforcement thereof may be limited by bankruptcy;
insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights
generally or usual equity principles in the event equitable remedies should be sought, that the Bonds
have been validly issued under the Indenture, and that all requirements under the Indenture precedent
to delivery of the Bonds have been satisfied.
In connection with the issuance of the Bonds, the Company has entered into a Standby Bond
Purchase Agreement dated as of November 1 , 1994 (the Standby Purchase Agreement
),
with The
Bank of New York (the Bank"
).
Pursuant to the Standby Purchase Agreement, the Bank has agreed
to provide (a) an amount sufficient to pay the purchase price or portion of the purchase price equal
to the principal amount of Bonds delivered to the Trustee for purchase and not remarketed, plus (b)
an amount equal to 62 days ' accrued interest on the outstanding Bonds to pay the portion of the
purchase price of the Bonds delivered to the Trustee equal to the accrued interest, if any, on such
Bonds. Execution of the Standby Purchase Agreement , however, does not release the Company from
its payment obligation under the Loan Agreement. The stated expiration date of the Standby Purchase
Agreement is November 17, 1999, subject to the provisions of the Standby Purchase Agreement.
For the purpose of securing the Company s obligation to repay the loan of the proceeds of
sale of the Bonds made to the Company by the Issuer pursuant to the Loan Agreement, the Company
has delivered to the Trustee, in trust for the benefit of the holders of the Bonds , its First Mortgage
and Collateral Trust Bonds in the aggregate principal amount of $15 060,000 (the First Mortgage
Bonds"), issued by the Company under the Mortgage and Deed of Trust, dated as of January 9,
1989, between the Company and Chemical Bank, as successor trustee, as supplemented and amended
by ten supplemental indentures, including a Tenth Supplemental Indenture dated as of August 1, 1994
(collectively, the Mortgage
).
Pursuant to the provisions of the Indenture, payments by the
Company representing principal of and interest on the First Mortgage Bonds are deposited into the
Bond Fund created under the Indenture and are used to pay the principal of and interest on the Bonds
on an equal and ratable basis as the same become due. The First Mortgage Bonds are being issued
as a part of a series of $216,470,000 aggregate principal of First Mortgage and Collateral Trust
Bonds pursuant to the Mortgage on the date hereof to secure the Bonds and five other issues of
pollution control revenue refunding bonds being issued on the date hereof by Emery County, Utah
Carbon County, Utah, Converse County, Wyoming, Sweetwater County, Wyoming and Moffat
County, Colorado (collectively, the "Other Issuers "), to refinance certain pollution control or 'Solid
waste disposal facilities (the "Facilities ) for the benefit of the Company.
We further certify that we have examined the form of bond prescribed in the Indenture and
find the same in due fonD of law and in our opinion the Bonds, to the amount named, are valid and
legally binding upon the Issuer according to the import thereof and, as provided in the Indenture and
the Bonds, are payable by the Issuer solely out of payments to be made by the Company under the
Loan Agreement and all moneys and investments held by the Trustee under the Indenture or
otherwise available to the Trustee for the payment thereof.
Subject to the conditi~m that the Comp~ny, the Issuer and the Other Issuers comply with
certain covenants made to satIsfy pertment requlfements of the Internal Revenue Code of 1954 , as
amended (the "1954 Code
),
and the Internal Revenue Code of 1986, we are of the opinion that
under present law interest on the Bonds is not includible in gross income of the owners thereof for
federal income tax purposes, except for interest on any Bond for any period during which such Bond
is owned by a person who is a substantial user of the Project or the Facilities or any person
considered to be related to such person (within the meaning of Section 1O3(b )(13) of the 1954 Code),
and interest on the Bonds will not be treated as an item of tax preference in computing the alternative
minimum tax for individuals and corporations. Interest on the Bonds will be taken into account,
however, in computing an adjustment used in determining the alternative minimum tax for certain
corporations. Failure to comply with certain of such covenants could cause the interest on the Bonds
to be included in gross income retroactive to the date of issuance of the Bonds. Ownership of the
Bonds may result in other federal tax consequences to certain taxpayers; we express no opinion
regarding any such collateral consequences arising with respect to the Bonds. In rendering this
opinion, we have relied upon certifications of even date herewith of the Company relating to the
Station, the Project and the application of the proceeds of the Refunded Bonds and the proceeds of
the Bonds with respect to certain material facts solely within the knowledge of the Company.
In our opinion, under present Wyoming law, the State of Wyoming imposes no income taxes
that would be applicable to interest on the Bonds. No opinion is expressed with respect to any other
taxes imposed by the State of Wyoming or any political subdivision thereof. Ownership of the Bonds
may result in other Wyoming tax consequences to certain taxpayers; we express no opinion regarding
any such collateral consequences arising with respect to the Bonds.
We are not passing upon the Standby Purchase Agreement or any action taken by the Bank
in connection therewith. The validity of the Standby Purchase Agreement has been passed upon by
Davis Polk & Wardwell.
Stoel Rives Boley Jones & Grey, counsel to the Company, has delivered an opinion of even
date herewith concerning the obligations of the Company under the Loan Agreement. In rendering
this opinion, we have relied upon said opinion with respect to, among other things: (i) the due
organization of the Company, (ii) the good standing or existence of the Company in the States of
Wyoming and Oregon, (Hi) the approval of the execution and delivery by the Company of the Loan
Agreement by all necessary regulatory authorities exercising jurisdiction over the Company, (iv) the
corporate power of the Company to enter into, and the due authorization , execution and delivery by
the Company of, the Loan Agreement, and (v) the binding effect of the Loan Agreement on the
Company.
Stoel Rives Boley Jones & Grey has also rendered an opinion of even date herewith, as to
the due authorization, execution and delivery of the First Mortgage Bonds and the Mortgage, the
validity and binding effect thereof, the enforceability thereof in accordance with their respective terms
and the requisite issuance of all orders , approvals , authorizations and consents of any court or
administrative or goverrunental body with respect to the First Mortgage Bonds.
Joseph B. Bluemel, County Attorney of the Issuer, has delivered an opinion of even date
herewith with respect to the obligations of the Issuer under the Bonds, the Loan Agreement and the
Indenture.
CHAPMAN AND CUTLER
We express no opinion as to the title to, the description of, or the existence of any liens,
charges or encumbrances on the Project or the Station.
ApP&"IDIX H
Upon delivery of the Sweetwater Bonds, Chapman and Cutler , Bond Counsel, proposes to
issue its final approving opinion in substantially the following form:
Law Offices of
CHAPMAN AND CUTLER
Theodore S. Chapman
t877-1943
Henry E. Culler
1879-1959
50 South Main Street, Salt Lake City, Utah 84144-0402
FAX [phone]
Telephone [phone]
2 NOM Central Avenue
Phoenix, Arizona 85004
(602) 2564060
11 t West Monroe Street
Chicago. Illinois 60603
[phone]
$21 260 000 Sweetwater County, Wyoming,
Pollution Control Revenue Refunding Bonds
(PacifiCorp Project) Series 1994
We hereby certify that we have examined certified copy of the proceedings of record of the
Board of County Commissioners of Sweetwater County, Wyoming (the Issuer
),
a political
subdivision of the State of Wyoming, preliminary to the issuance by the Issuer of its Pollution
Control Revenue Refunding Bonds (PacifiCorp Project) Series 1994 , in the aggregate principal
amount of $21 260 000 (the Bonds"
).
The Bonds are being issued pursuant to the provisions of
Sections 15-701 to 15-710, inclusive, Wyoming Statutes (1977), as amended and supplemented
(the Act
),
for the purpose of refunding the Issuer s Taxable Pollution Control Revenue Refunding
Bonds (PacifiCorp Project) Series 1994T now outstanding in the amount of $21,260 000 (the
Refunded Bonds ). The Refunded Bonds were issued for the purpose of refunding the Issuer
Pollution Control Revenue Bonds (Pacific Power & Light Company Project) Series 1973 (the "1973
Bonds ) which were issued by the Issuer for the purpose of financing a portion of the cost of certain
air and water pollution control facilities in which PacifiCorp, an Oregon corporation (the Company")
owns a 66 2/3% undivided interest (the Project") at the Jim Bridger coal-fired steam electric
generating plant (the Station in Sweetwater County, Wyoming. The proceeds of the Bonds
together with other moneys to be provided by the Company, are to be deposited with the trustee for
the Refunded Bonds to provide for the payment of the Refunded Bonds.
Re:
The Bonds mature on November 1 , 2024, bear interest from time to time computed as set
forth in each of the Bonds and are subject to purchase and redemption prior to maturity at the times
in the manner and upon the terms set forth in each of the Bonds. The Bonds are issuable in
Authorized Denominations as provided in the hereinafter-defined Indenture as fully-registered Bonds
without coupons.
From such examination of the proceedings of the Board of County Commissioners of the
Issuer referred to above and from an examination of the Act, we are of the opinion that such
proceedings show lawful authority for said issue of Bonds under the laws of the State of Wyoming
now in force.
Pursuant to a Loan Agreement, dated as of November 1 , 1994 (the Loan Agreement"),
and between the Company and the Issuer, the Issuer has agreed to loan the proceeds from the sale
of the Bonds to the Company for the purpose of refunding the Refunded Bonds , and the Company
has agreed to pay amounts at least sufficient to pay the principal of, premium, if any, and interest
on the Bonds when due, whether at stated maturity, call for redemption or acceleration. The Loan
Agreement (an executed counterpart of which has been examined by us) has, in our opinion
, ,
been
duly authorized, executed and delivered by the Issuer, and, assuming the due authorization, execution
and delivery by the Company, is a valid and binding obligation of the Issuer, enfora:able in
accordance with its terms , subject to the qualification that the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization and other similar laws relating to the enfor.cement of creditors
rights generally or usual equity principles in the event equitable remedies should be sought.
We have also examined an executed counterpart of the Trust Indenture, dated as of
November 1 , 1994 (the Indenture
),
by and between the Issuer and The First National Bank of
Chicago, as Trustee (the 7rustee
),
secur:ing the Bonds and setting forth the -covenants and
undertakings of the Issuer in connection with the Bonds and making provision under certain
conditions for the remarketing of the Bonds by a Remarketing Agent ,the Remarketing Agent"
),
for
the fixing of variable interest rates to be borne by the Bonds from time to time, which variable
interest rate may be a Daily Interest Rate, a Weekly Interest Rate or a Flexible Interest Rate (each
as defined in the Indenture), and for the conversion of the interest rate borne by the Bonds to a
different variable interest rate or to a Term Interest Rate (as defined in the Indenture) under certainconditions. The Indenture provides that the Bonds bear interest at a Daily Interest Rate until
conversion to a different variable interest rate or to a Term Interest Rate. Under the Indenture, the
revenues derived by the Issuer under the Loan Agreement, together with certain of the rights of the
Issuer thereunder, are pledged and assigned to the Trustee as security for the Bonds. From such
examination, we are of the opinion that the proceedings of the Board of County Commissioners of
the Issuer referred to above show lawful authority for the execution and delivery of the Indenture
that the Indenture is a valid and binding obligation of the Issuer, enforceable in accordance with its
terms, subject to the qualification that the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights
generally or usual equity principles in the event equitable remedies should be sought , that the Bonds
have been validly issued under the Indenture, and that all requirements under the Indenture precedent
to delivery of the Bonds have been satisfied.
In connection with the issuance of the Bonds, the Company has entered into a Standby Bond
Purchase Agreement dated as of November 1 , 1994 (the Standby Purch~e Agreement
),
with The
Bank of New York (the Bank"
).
Pursuant to the Standby Purchase Agreement, the Bank has agreed
. to provide (a) an amount sufficient to pay the purchase price or portion of the purchase price equal
to the principal amount of Bonds delivered to the Trustee for purchase and not remarketed, plus (b)
an amount equal to 62 days' accrued interest on the outstanding Bonds to pay the portion of the
purchase price of the Bonds delivered to the Trustee equal to the accrued interest, if any, on such
Bonds. Execution of the Standby Purchase Agreement, however, does not release the Company from
its payment obligation under the Loan Agreement. The stated expiration date of the Standby Purchase
Agreement is November 17, 1999, subject to the provisions of the Standby Purchase Agreement.
For the purpose of securing the Company s obligation to repay the loan of the proceeds of
sale of the Bonds made to the Company by the Issuer pursuant to the Loan Agreement, the Company
has delivered to the Trustee, in trust for the benefit of the holders of the Bonds, its First Mortgage
and Collateral Trust Bonds in the aggregate principal amount of $21,260 000 (the First Mortgage
Bonds"
),
issued by the Company under the Mortgage and Deed of Trust, dated as of January 9
1989, between the Company and Chemical Bank, as successor trustee , as supplemented and amended
by ten supplemental indentures, including a Tenth Supplemental Indenture dated as of August 1, 1994
(collectively, the Mortgage
).
Pursuant to the provisions of the Indenture, payments by the
Company representing principal of and interest on the First Mortgage Bonds are deposited into the
Bond Fund created under the Indenture and are used to pay the principal of and interest on the Bonds
on an equal and ratable basis as the same become due. The First Mortgage Bonds are being issued
as a part of a series of $216 470 000 aggregate principal of First Mortgage and Collateral Trust
Bonds pursuant to the Mortgage on the date hereof to secure the Bonds and five other issues of
pollution control revenue refunding bonds being issued on the date hereof by Emery County, Utah
Carbon County, Utah, Converse County, Wyoming, Lincoln County, Wyoming and Moffat County,
Colorado (collectively, the "Other Issuers "), to refinance certain pollution control or solid waste
disposal facilities (the "Facilities ) for the benefit of the Company.
We further certify that we have examined the form of bond prescribed in the Indenture and
find the same in due form of law and in our opinion the Bonds, to the amount named, are valid and
legally binding upon the Issuer according to the import thereof and, as provided in the Indenture and
the Bonds, are payable by the Issuer solely out of payments to be made by the Company under the
Loan Agreement and all moneys and investments held by the Trustee under the Indenture or
otherwise available to the Trustee for the payment thereof.
Subject to the condition that the Company, the Issuer and the Other Issuers comply with
certain covenants made to satisfy pertinent requirements of the Internal Revenue Code of 1954, as
amended (the "1954 Code
),
and the Internal Revenue Code of 1986, we are of the opinion that
under present law interest on the Bonds is not includible in gross inco~e of th~ own~rs thereof for
federal income tax purposes , except for interest on any Bond for any perIod durmg whIch such Bond
is owned by a person who is a substantial user of the Project or the Facilities or any person
considered to be related to such person (within the meaning of Section 1O3(b)(l3) of the 1954 Code),
and interest on the Bonds will not be treated as an item of tax preference in computing the alternative
minimum tax for individuals and corporations. Interest on the Bonds will be taken into account,
however, in computing an adjustment used in determining the alternative minimum tax for certain
corporations. Failure to comply with certain of such covenants -could cause the interest on the Bonds
to be included in gross income retroactive to the date of issuance of the Bonds. Ownership of the
Bonds may result in other federal tax consequences to certain taxpayers; we express no opinion
regarding any such collateral consequences arising with respect to the Bonds. In rendering this
opinion. we have relied upon certifications of even date herewith of the Company relating to the
Station, the Project and the application of the proceeds of the 1973 Bonds and the Refunded Bonds
and the proceeds of the Bonds with respect to certain material facts solely within the knowledge of
the Company.
In our opinion, under present Wyoming law, the State of Wyoming imposes no income taxes
that would be applicable to interest on the Bonds. No opinion is expressed with respect to any other
taxes imposed by the State of Wyoming or any political subdivision thereof. Ownership of the Bonds
may result in other Wyoming tax consequences to certain taxpayers; we express no opinion regarding
any such collateral consequences arising with respect to the Bonds.
We are not passing upon the Standby Purchase Agreement or any action taken by the Bank
in connection therewith. The validity of the Standby Purchase Agreement has been passed upon by
Davis Polk & Wardwell.
Stoel Rives Boley Jones & Grey, counsel to the Company, has delivered an opinion of even
date herewith concerning the obligations of the Company under the Loan Agreement. In rendering
this opinion, we have relied upon said opinion with respect to, among other things: (i) the due
organization of the Company, (ii) the good standing or existence of the Company in the States of
Wyoming and Oregon, (iii) the approval of the execution and delivery l?Y the Company of the Loan
Agreement by all necessary regulatory authorities exercising jurisdiction over the Company, (iv) the
corporate power of the Company to enter into, and the due authorization, execution and delivery by
the Company of, the Loan Agreement, and (v) the binding effect of the Loan Agreement on the
Company.
Stoel Rives Boley Jones & Grey has also rendered an opinion of even date herewith, as to
the due authorization, execution and delivery of the First Mortgage Bonds and the Mortgage. the
validity arid binding effect thereof, the enforceability thereof in accordance with their respective terms
and the requisite issuance of an orders, approvals, authorizations and -consents of any 'court or
administrative or goverrunental body with respect to the First Mort-gage Bonds.
Sue Kearns, County and Prosecuting Attorney, and G. R. Stewart, Civil Deputy County and
Prosecuting Attorney of the Issuer, have delivered an opinion of even date herewith with respect to
the obligations of the Issuer under the Bonds, the Loan Agreement and the Indenture.
We express no opinion as to the title to, the description of, or the existence of any liens,
charges or encumbrances on the Project or the Station.
CHAPMAN AND CUTLER
ApPENDIX I
Upon delivery of the Moffat Bonds, Chapma~ and Cutler, Bond Counsel , proposes to issue
its final approving opinion in substantially the followmg form:
Law Offices of
CHAPMAN AND CUTLER
Theodore S. Chapman
1877-1943
Henry E. Culler
1879-1959
50 South Main Street, Salt Lake City, Utah 84144-0402
FAX [phone]
Telephone (801) 533.()()66
2 Nonh Central Avenue
Phoenix, Arizona 85004
[phone]
III Wesl Monroe SUCCI
Chicago, Illinois 60603
[phone]
Re:$40 655 000 Moffat County, Colorado
Pollution Control Revenue Refunding Bonds
(PacifiCorp Project) Series 1994
We hereby certify that we have examined certified copy of the proceedings of record of the
Board of County Commissioners of Moffat County, Colorado (the Issuer
),
a body corporate and
politic of the State of Colorado, preliminary to the issuance by the Issuer of its Pollution Control
Revenue Refunding Bonds (PacifiCorp Project) Series 1994, in the aggregate principal amount of
$40 655,000 (the Bonds"
).
The Bonds are being issued pursuant to the provisions of the County
and Municipality Development Revenue Bond Act, Colorado Revised Statutes 1973, as amended and
supplemented (the Act ), for the purpose of refunding the Issuer s Pollution Control Revenue Bonds,
Series 1978 (Colorado-Ute Electric Association, Inc. Project) now outstanding in the amount of
$40,655 000 (the Refunded Bonds ). The Refunded Bonds were issued for the purpose of financing
a portion of the cost of air and water pollution control facilities (the Project at the electric
generating Units 1 and 2 at the Craig Station steam electric generating station (the Station ) in
Moffat County, Colorado, for use by the Colorado-Ute Electric Association, Inc. Colorado-Ute
Subsequent to the issuance of the Refunded Bonds, PacifiCorp, an. Oregon corporation (the
Company
),
purchased the Project from Colorado-Ute and assumed certain obligations and rights
of Colorado-Ute with respect to the Project and the Refunded Bonds. The proceeds of the Bonds
together with other moneys to be provided by the Company, are to be deposited with the trustee for
the Refunded Bonds to provide for the payment of the Refunded Bonds.
The Bonds matUre on May 1 , 2013, bear interest from time to time computed as set forth in
each of the Bonds and are subject to purchase and redemption prior to maturity at the times, in the
manner and upon the terms set forth in each of the Bonds. The Bonds are issuable in Authorized
Denominations as provided in the hereinafter-defined Indenture as fully-registered Bonds without
coupons.
From such examination of the proceedings of the Board of County Conunissioners of the
Issuer referred to above and from an examination of the Act, we are of the opinion that such
proceedings show lawful authority for said issue of Bonds under the laws of the State of Colorado
now in force.
Pursuant to a Loan Agreement, dated as of November 1 , 1994 (the Loan Agreement
),
and between the Company and the Issuer , the Issuer has agreed to loan the proceeds from the sale
of the Bonds to the Company for the purpose of refunding the Refunded Bonds, and the Company
has agreed to pay amounts at least sufficient to pay the principal of, premium, if any, and interest
on the Bonds when due , whether at stated maturity, calI for redemption or acceleration. The Loan
Agreement (an executed counterpart of which has been examined by us) has, in our opinion, been
duly authorized, executed and delivered by the Issuer, and, assuming the due authorization .execution
and delivery by the Company, is a valid and binding obligation of the Issuer, enforceable in
accordance with its terms, subject to the qualification that the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of -creditors ,
rights generaIly or usual equity principles in the event equitable remedies should be sought.
We have also examined an executed counterpart of the Trust Indenture, dated as of
November 1 , 1994 (the W Indenture ), by and between the Issuer and The First National Bank of
Chicago, as Trustee (the 7rustee
),
securing the Bonds and setting forth the covenants and
undertakings of the Issuer in connection with the Bonds and making provision under -certain
conditions for the remarketing of the Bonds by a Remarketing Agent (the Remarketing Agent
),
for
the fixing of variable interest rates to be borne by the Bonds from time to time, whi-ch variable
interest rate may be a Daily Interest Rate, a Weekly Interest Rate or a Flexible Interest Rate (each
as defined in the Indenture), and for the conversion of the interest rate borne by the Bonds to a
different variable interest rate or to a Term Interest Rate (as defined in the Indenture) under certain
conditions. The Indenture provides that the Bonds bear interest at a Daily Interest Rate until
conversion to a different variable interest rate or to a Term Interest Rate. Under the Indenture, the
revenues derived by the Issuer under the Loan Agreement, together with certain of the rights of the
Issuer thereunder, are pledged and assigned to the Trustee as security for the Bonds. From such
examination, we are of the opinion that the proceedings of the Board of County Commissioners of
the Issuer referred to above show lawful authority for the execution and delivery of the Indenture,
that the Indenture is a valid and binding obligation of the Issuer, enforceable in accordance with its
terms, subject to the qualification that the enforcement thereof may be limited by bankrupt~y,
insolvency, reorganization and other similar laws relating to the enforcement of creditors ' rights
generally or usual equity principles in the event equitable remedies should be sought, that the Bonds
have been validly issued under the Indentlire, and that all requirements under the Indenture precedent
to delivery of the Bonds have been satisfied.
In connection with the issuance of the Bonds, the Company has entered into a Standby Bond
Purchase Agreement dated as of November 1 , 1994 (the Standby Purchase Agreement
),
with The
Bank of New York (the BankW
).
Pursuant to the Standby Purchase Agreement, the Bank has agreed
to provide (a) an amount sufficient to pay the purchase price or portion of the purchase price equal
to the principal amount of Bonds delivered to the Trustee for purchase and not remarketed, plus (b)
an amount equal to 62 days' accrued interest on the outstanding Bonds to pay the portion of the
purchase price of the Bonds delivered to the Trustee equal to the accrued interest, if any, on such
Bonds. Execution of the Standby Purchase Agreement, however, does not release the Company from
its payment obligation under the Loan Agreement. The stated expiration date of the Standby Pur-chase
Agreement is November 17, 1999, subject to the provisions of the Standby Purchase Agreement.
For the purpose of securing the Company s obligation to repay the loan of the proceeds of
sale of the Bonds made to the Company by the Issuer pursuant to the Loan Agreement, the Company
has delivered to the Trustee, in trust for the benefit of the holders of the Bonds, its First Mortgage
and CoIlateral Trust Bonds in the aggregate principal amount of $40,655 000 (the First Mortgage
Bonds
),
issued by the Company under the Mortgage and Deed of Trust, dated as of January 9
1989, between the Company and Chemical Bank, as successor trustee, as supplemented and amended
by ten supplemental indentures, including a Tenth Supplemental Indenture dated as of August 1 , 1994
(collectively, the Mortgage
).
Pursuant to the provisions of the Indenture, payments by the
Company representing principal of and interest on the First Mortgage Bonds are deposited into the
Bond Fund created under the Indenture and are used to pay the principal of and interest on the
Bonds on an equal and ratable basis as the same become due. The First Mortgage Bonds are being
issued as a part of a series of $216,470,000 aggregate principal of First Mortgage and CoIlateral
Trust Bonds pursuant to the Mortgage on the date hereof to secure the Bonds and five other issues
of pollution control revenue refunding bonds being issued on the date hereof by Emery County,
Utah, Carbon County, Utah, Converse County, Wyoming, Lincoln County, Wyoming, and
Sweetwater County, Wyoming (collectively, the "Other Issuers ), to refinance -certain pollution
control or solid waste disposal facilities (the "Facilities ) for the benefit of the Company.
We further certify that we have examined the fonn of bond prescribed in the Indenture and
find the same in due fonn of law and in our opinion the Bonds. to the amount named , are valid and
legally binding upon the Issuer according to the import thereof and, as provided in the IndentUre and
the Bonds, are payable by the Issuer solely out of payments to be made by the Company under the
Loan Agreement and all moneys and investments held by the Trustee under the Indenture or
otherwise available to the Trustee for the payment thereof.
Subject to the condition that the Company, the Issuer and the Other Issuers comply with
certain covenants made to satisfy pertinent requirements of the Internal Revenue Code of 1954, as
amended (the ")954 Code
),
and the Internal Revenue Code of 1986, we are of the opinion that
under present law interest on the Bonds is not includible in gross income of the owners thereof for
federal income tax purposes , except for interest on any Bond for any period during which such Bond
is owned by a person who is a substantial user of the Project or the Facilities or any person
considered to be related to such person (within the meaning of Section 103(b)(l3) of the 1954 Code),
and interest on the Bonds will not be treated as an item of tax preference in computing the alternative
minimum tax for individuals and corporations. Interest on the Bonds will be taken into account
however, in computing an adjustment used in determining the alternative minimum tax for certain
corporations. Failure to comply withcertainof such covenants could cause the interest on the Bonds
to be included in gross income retroactive to the date of issuance of the Bonds. Ownership of the
Bonds may result in other federal tax consequences to certain taxpayers; we express no opinion
regarding any such collateral consequences arising with respect to the Bonds. In rendering this
opinion, we have relied upon certifications of even date herewith of the Company relating to the
Station , the Project and the application of the proceeds of the Refunded Bonds and the proceeds of
the Bonds with respect to certain material facts solely within the knowledge of the Company.
In our opinion , under the laws of the State of Colorado, as presently enacted and -construed,
so long as interest on the Bonds is not included in gross income for federal income tax purposes,
interest on the Bonds is not included in Colorado taxable income for purposes of the income tax
imposed by the State of Colorado pursuant to Article 22 of Title 39 of the Colorado Revised Statutes,
as amended, upon individuals, corporations, and estates and trusts. No opinion is expressed
regarding taxation of interest on the Bonds under any other provisions of Colorado law. Ownership
of the Bonds may result in other Colorado tax consequences to certain taxpayers and we express no
opinion regarding any such collateral consequences arising with respect to the Bonds.
We are not passing upon the Standby Purchase Agreement or any action taken by the Bank
in connection therewith. The validity of the Standby Purchase Agreement has been passed upon by
Davis Polk & Wardwell.
Stoel Rives Boley Jones & Grey, counsel to the Company, has delivered an opinion of even
date herewith concerning the obligations of the Company under the Loan Agreement. In rendering
this opinion , we have relied upon said opinion with respect to, among other things: (i) the due
organization of the Company, (ii) the good standing or existence of the Company in the States of
Colorado and Oregon, (iii) the approval of the execution and delivery by the Company of the Loan
Agreement by all necessary regulatory authorities exercising jurisdiction over the Company, (iv) the
corporate power of the Company to enter into, and the due authorization, execution and delivery by
the Company of, the Loan Agreement, and (v) the binding effect of the Loan Agreement on the
Company.
Stoel Rives Boley Jones & Grey has also rendered an opinion of even date herewith, as to
the due authorization, execution and delivery of the First Mortgage Bonds and the Mortgage, the
validity and binding effect thereof, the enforceability thereof in accordance with their respective terms
and the requisite issuance of all orders, approvals, authorizations and consents of any court or
administrative or governmental body. with respect to the First Mortgage Bonds.
Thomas Thornberry, County Attorney of the Issuer, has delivered an opinion of even date
herewith with respect to the obligations of the Issuer under the Bonds, the Loan Agreement and the
Indenture.
We express no opinion as to the title to, the description of, or the existence of any liens,
charges or encumbrances on the Project or the Station.
CHAPMAN AND CUTLER