20120424Report, New Credit Support Arrangements.pdf

ROCKY MOUNTAIN
POWER
A DIVISION OF PACIFICORP
April 23, 2012
VIA ELECTRONIC MAIL
AND OVERNIGHT DELIVERY
RE CE I V F: f)
2OI2 APR 2 AMIU:25
IDAH) PUBL UT1UTES COMMISSiON:
201 South Main, Suite 2300
Salt Lake City, Utah 84111
Jean D. Jewell
Commission Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83720
Re: Case No. PAC-E-03-1, Order No. 29201,
Report of New Credit Support Arrangements
Dear Ms. Jewell:
Pursuant to the referenced Order, PacifiCorp submits to the Commission one set of verified
copies of each of the following documents:
1)Reoffering Circulars dated April 16, 2012 and Supplement dated April 18, 2012
2)Reimbursement Agreements, dated April 18, 2012, among the Company and JP Morgan
Chase Bank, NA, as Letter of Credit Issuing Bank for the following Bond issues:
a.$45,000,000 City of Forsyth, Rosebud County, Montana Pollution Control Revenue
Refunding Bonds, Series 1988 (PacifiCorp Project)
b.$45,000,000 Emery County, Utah Pollution Control Revenue Refi.mding Bonds,
Series 1991 (PacifiCorp Project)
Because PacifiCorp has not issued any new securities in connection with the referenced
transaction, no Report of Securities Issued is enclosed.
PacifiCorp arranged for these replacement Letters of Credit to provide credit enhancement and to
help assure timely payment of amounts due with respect to each PCRB series. The new Letters
of Credit are expected to enable PacifiCorp to achieve a lower cost of money with respect to the
financing authorized by the above-listed Order.
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 at [phone] or Ted Weston, Regulatory Manager, at [phone] if
you have any questions about this letter or the enclosed documents.
Idaho Public Utilities Commission
Page 2
April 23, 2012
Sincerely,
Tanya Sacks
Assistant Treasurer
Enclosures
Cc: Terri Carlock
Ted Weston
REOFFERING-NOT A NEW ISSUE
The opinion of Chapman and Cutler delivered on January 14, 1988 stated that, subject to the condition that the
Issuer and the Company comply with certain covenants, under then existing law (i) 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 any person considered to be related to such
person (within the meaning of Section 103(b)(13) of the Internal Revenue Code of 1954, as amended), and (ii) 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. Such opinion of Bond Counsel was also to the effect that under then
existing law, the interest on the Bonds is exempt from individual income taxes imposed by the State of Montana. Such
opinions have not been updated as of the date hereof. In the opinion of Bond Counsel to be delivered in connection with the
delivery of the Letter of Credit, the delivery of the Letter of Credit will not cause the interest on the Bonds to become
includible in the gross income of the owners thereof for federal income tax purposes. See "TAX EXEMPTION" herein for a
more complete discussion.
DELIVERY OF
ALTERNATE CREDIT FACILITY AND REOFFERING
$45,000,000*
CITY OF FORSYTH, ROSEBUD COUNTY, MONTANA
CUSTOMIZED PURCHASE POLLUTION CONTROL REVENUE REFUNDING BONDS
(PACIFICORP PROJECT), SERIES 1988
Purchase Date: April 18, 2012 Due: January 1, 2018
The Bonds are limited obligations of the Issuer payable solely from and secured by a pledge of payments to be made
under a Loan Agreement between the Issuer and
PACIFICORP
and from funds drawn under an irrevocable direct pay Letter of Credit (the "Letter of Credit") to be issued by
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
Under the Letter of Credit, the Trustee will be entitled to draw through April 18, 2013 (unless earlier terminated or
extended) up to an amount sufficient to pay the principal of and, up to 65 days' accrued interest on the Bonds calculated at a
maximum interest rate of 12% per annum (a) to pay the principal of and interest on the Bonds and (b) to pay the purchase
price of Bonds tendered by the Owners thereof as provided in the Indenture.
The Bonds are currently secured by a Letter of Credit (the "Prior Letter of Credit") issued by BNP Paribas (the
"Prior Bank"). PacifiCorp (the "Company") has delivered notice that prior to or on April 18, 2012, the Letter of Credit will
be delivered to the Trustee to support the Bonds. After that date, the Bonds will not have the benefit of the Prior Letter of
Credit.
The Bonds are issuable as fully registered Bonds without coupons, initially in the denomination of $100,000 and
integral multiples of $5,000 in excess thereof. Interest on the Bonds while the Bonds bear interest at Daily, Weekly or
Monthly Rates will be payable monthly on each Interest Payment Date. As of the date hereof, the Bonds bear interest at a
Daily Rate. The Depository Trust Company, New York, New York ("DTC"), will continue to act as a securities depository
for Bonds. Such Bonds are registered in the name of Cede & Co., as registered owner and nominee of DTC, and, except for
the limited circumstances described herein, beneficial owners of interests in such Bonds will not receive certificates
representing their interests in such Bonds. Payments of principal of, and premium, if any, and interest on Bonds will be made
through DTC and its Participants and disbursements of such payments to purchasers will be the responsibility of such
Participants.
The Bonds are being offered solely on the basis of the Letter of Credit and the fmancial strength of
JPMorgan Chase Bank, National Association, and are not being offered on the basis of the financial strength of the
Company or any other security.
Certain legal matters related to the delivery of the Letter of Credit will be passed upon by Chapman and Cutler LLP,
Bond Counsel to the Company. Certain legal matters will be passed upon for the Company by Paul J. Leighton, Esq.,
counsel to the Company.
Price: 100%
The Bonds are reoffered, subject to prior sale and certain other conditions.
BARCLAYS
Remarketing Agent
April 16,2012
* The Bonds were issued in the aggregate principal amount of $45,000,000, all of which remain outstanding. This Supplement relates to the
remarketing, in a secondary market transaction, of $39,000,000 of the Bonds delivered for mandatory purchase by the respective owners thereof for
purchase on April 18, 2012. Owners of the remaining $6,000,000 aggregate principal amount of the Bonds have elected to retain such Bonds pursuant
to the Indenture.
No broker, dealer, salesman or other person has been authorized to give any information
or to make any representations other than those contained in this Supplement to Official
Statement in connection with the reoffering made hereby, and, if given or made, such
information or representations must not be relied upon as having been authorized by the Issuer,
PacifiCorp, JPMorgan Chase Bank, National Association, or the Remarketing Agent. Neither
the delivery of this Supplement to Official Statement nor any sale hereunder shall under any
circumstances create any implication that there has been no change in the affairs of the Issuer,
JPMorgan Chase Bank, National Association, or PacifiCorp since the date hereof. The Issuer
has not and will not assume any responsibility as to the accuracy or completeness of the
information in this Supplement to Official Statement. No representation is made by JPMorgan
Chase Bank, National Association, as to the accuracy, completeness or adequacy of the
information contained in this Supplement to Official Statement, except with respect to
APPENDIX B hereto and the information under the caption "THE LETrER OF CREDIT." The Bonds
are not registered under the Securities Act of 1933, as amended. Neither the Securities and
Exchange Commission nor any other federal, state or other governmental entity has passed upon
the accuracy or adequacy of this Supplement to Official Statement.
In connection with this offering, the Remarketing Agent may overallot or effect
transactions which stabilize or maintain the market price of the securities offered hereby at a
level above that which might otherwise prevail in the open market. Such stabilizing, if
commenced, may be discontinued at any time.
-•1-
-
TABLE OF CONTENTS
PAGE
GENERAL INFORMATION............ 1
THEBONDS ....................................................................................................................................... 3
Intereston the Bonds ..............................................................................................................3
Purchase on Demand of Owner .............................................................................................. 4
Redemptionof Bonds ..............................................................................................................5
THE LETTER OF CREDIT AND THE CREDIT AGREEMENT .................................................................... 5
TheLetter of Credit ................................................................................................................5
CreditAgreement .................................................................................................................... 6
REMARKETINGAGENT .................................................................................................................... 11
BOND TERMS AND RELATED DOCUMENTS ...................................................................................... 12
TAXExEMPrI0N ............................................................................................................................. 12
MISCELLANEOUS.............................................................................................................................13
APPENDIX A - PacifiCorp
APPENDIX B - JPMorgan Chase Bank, National Association
APPENDIX C - Official Statement Dated January 13, 1988
APPENDIX D - Proposed Form of Opinion of Bond Counsel
APPENDIX E - Form of Letter of Credit
-11-
$45,000,000
CITY OF FORSYTH, ROSEBUD COUNTY, MONTANA
CUSTOMIZED PURCHASE POLLUTION CONTROL REVENUE REFUNDING BONDS
(PACIFICORP PROJECT), SERIES 1988
GENERAl. INFORMATION
THE OFFICIAL STATEMENT DATED JANUARY 13,1988, A COPY OF WHICH IS ATTACHED
HERETO AS APPENDIX C (THE "ORIGINAL OFFICIAL STATEMENT" AND, TOGETHER WITH THIS
SUPPLEMENT TO OFFICIAL STATEMENT, THE "OFFICIAL STATEMENT"), WAS PREPARED 114
CONNECTION WITH THE OFFERING OF FIVE SEPARATE ISSUES OF BONDS RELATING TO THE
COMPANY. THIS SUPPLEMENT TO OFFICIAL STATEMENT RELATES ONLY TO THE BONDS
DESCRIBED ON THE COVER PAGE HERETO.
THIS SUPPLEMENT TO OFFICIAL STATEMENT DOES NOT CONTAIN COMPLETE
DESCRIPTIONS OF DOCUMENTS AND OTHER INFORMATION WHICH IS SET FORTH IN THE
ORIGINAL OFFICAL STATEMENT EXCEPT WHERE THERE HAS BEEN A CHANGE IN THE
DOCUMENTS OR MORE RECENT INFORMATION SINCE THE DATE OF THE ORIGINAL OFFICIAL
STATEMENT. THIS SUPPLEMENT TO OFFICIAL STATEMENT SHOULD THEREFORE BE READ
ONLY IN CONJUNCTION WITH THE ORIGINAL OFFICIAL STATEMENT.
This Supplement to Official Statement is provided to furnish certain information with
respect to the reoffering of the $45,000,000 outstanding principal amount of the Customized
Purchase Pollution Control Revenue Refunding Bonds (PacifiCorp Projects) Series 1988 (the
"Bonds") issued by the City of Forsyth, Rosebud County, Montana (the "Issuer").
The Bonds were issued pursuant to a Trust Indenture, dated as of January 1, 1988 (the
"Indenture") between the Issuer and The Bank of New York Mellon Trust Company, N.A.
(successor in interest to The First National Bank of Chicago), as Trustee (the "Trustee"). The
proceeds from the sale of the Bonds were loaned to Pacifi Corp (the "Company") pursuant to the
terms of a Loan Agreement dated as of January 1, 1988 (the "Agreement"), between the Issuer
and the Company. Under the Agreement, the Company is unconditionally obligated to pay
amounts sufficient to provide for payment of the principal of, premium, if any, and interest on
the Bonds (the "Loan Payments") and for payment of the purchase price of the Bonds.
The proceeds of the Bonds, together with certain other moneys of the Company, were
used for the purposes set forth in the Original Official Statement.
The Bonds, together with premium, if any, and interest thereon, are limited and not
general, obligations of the Issuer not constituting or giving rise to a pecuniary liability of
the Issuer nor any charge against its general credit or taxing powers nor an indebtedness of
or a loan of credit thereof, shall be payable solely from the Revenues (as defined in the
Indenture and which includes moneys drawn under the Letter of Credit) and other moneys
pledged therefor under the Indenture, and shall be a valid claim of the respective holders
thereof only against the Bond Fund (as defined in the Indenture), the Revenues and other
moneys held by the Trustee as part of the Trust Estate (as defined in the Indenture). The
Issuer shall not be obligated to pay the purchase price of Bonds from any source.
No recourse shall be had for the payment of the principal of, or premium, if any, or
interest on any of the Bonds or for any claim based thereon or upon any obligation,
covenant or agreement in the Indenture contained, against any past, present or future
officer or employee of the Issuer, or any incorporator, officer, director or member of any
successor corporation, as such, either directly, or through the Issuer or any successor
corporation, under any rule of law or equity, statute or constitution or by the enforcement
of any assessment or penalty or otherwise, and all such liability of any such incorporator,
officer, director or member as such was expressly waived and released as a condition of
and in consideration for the execution of the Indenture and the issuance of any of the
Bonds.
The Company has exercised its right under the Agreement and the Indenture to terminate
the Letter of Credit, dated September 15, 2004, as amended (the "Prior Letter of Credit"), issued
by BNP Paribas (the "Prior Bank"), which has supported payment of the principal, interest and
purchase price of the Bonds since the date such Prior Letter of Credit was issued. Pursuant to the
Indenture, the Company has elected to replace the Prior Letter of Credit with an Irrevocable
Letter of Credit (the "Letter of Credit") issued by JPMorgan Chase Bank, National Association
("JPMorgan"). The Letter of Credit will be delivered to the Trustee on April 18, 2012 (the
"Purchase Date") and, after such date, the Bonds will not have the benefit of the Prior Letter of
Credit.
All references in the Official Statement (unless expressly stated otherwise) to the
Letter of Credit shall be deemed to refer to the Letter of Credit and not to the Prior Letter
of Credit, and all references to the Bank shall be deemed to refer to JPMorgan and not to
the Prior Bank.
During the Daily, Weekly and Monthly Rate periods, the Trustee will be entitled to draw
under the Letter of Credit up to (a) an amount equal to the principal amount of the Bonds to be
used (i) to pay the principal of the Bonds, (ii) to enable the Trustee to pay the portion of the
purchase price equal to the principal amount of the Bonds delivered or deemed delivered to it for
purchase and not remarketed by the Remarketing Agent, and (iii) to enable the Company to
purchase the Bonds in lieu of redemption under certain circumstances, plus (b) an amount equal
to 65 days' accrued interest on the Bonds (calculated at an assumed maximum rate of 12% per
annum) (i) to pay interest on the Bonds or (ii) to enable the Trustee to pay the portion of the
purchase price of the Bonds properly delivered for purchase equal to the accrued interest, if any,
on the purchased Bonds.
The Letter of Credit constitutes an Alternate Credit Facility (defined below) under the
Indenture. At any time, the Company may, at its option, provide for the delivery to the Trustee
of an Alternate Credit Facility to replace the Letter of Credit or provide for the termination of the
-2-
Letter of Credit or any other Alternate Credit Facility then in effect, as described in the Original
Official Statement under the caption "THE LETTER OF CREDIT - Alternate Credit Facility."
Brief descriptions of the Issuer, the Bonds, the Letter of Credit, the Agreement and the
Indenture are included in this Supplement to Official Statement, including the Original Official
Statement attached as APPENDIX C hereto. Information regarding the business, properties and
financial condition of the Company is included in APPENDIX A attached hereto. A brief
description of JPMorgan is included as APPENDIX B hereto. The descriptions herein of the
Agreement, the Indenture and the Letter of Credit are qualified in their entirety by reference to
such documents, and the descriptions herein of the Bonds are qualified in their entirety by
reference to the form 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 may be obtained from the principal corporate trust office of the Trustee in
Chicago, Illinois and at the principal offices of the Remarketing Agent in New York, New York.
THE BoNDs
Reference is hereby made to the Bonds in their entirety for the detailed provisions
thereof. Certain terms used herein are set forth in the Original Official Statement under the
caption "THE BONDS—Interest on the Bonds" and in "APPENDIX F' thereto.
INTEREST ON THE BONDS
The Bonds currently bear interest at a Daily Interest Rate (not exceeding 12% while the
Letter of Credit is in effect) unless and until changed as described in the Original Official
Statement under "CONVERSION OF RATE." The Daily Interest Rate on the Bonds is determined
by the Remarketing Agent to be the interest rate which, in the judgment of the Remarketing
Agent, when borne by the Bonds, is the minimum interest rate necessary to enable the
Remarketing Agent to sell the Bonds on such date at the principal amount thereof plus accrued
interest, if any; provided, however, that (A) with respect to any day that is not a Business Day,
the Daily Interest Rate shall be the same rate as the Daily Interest Rate established for the
immediately preceding Business Day unless the Remarketing Agent is open for business on such
non-Business Day and determines a rate for such non-Business Day, in which case the Bonds
shall bear interest at the rate so determined, and (B) if for any reason a Daily Interest Rate is not
established by the Remarketing Agent or the rate established by the Remarketing Agent is held
to be invalid or unenforceable by a court of law with respect to any day, the Daily Interest Rate
for such day shall equal the Floating Interest Index determined by the Indexing Agent as of such
day. On the basis of such Daily Interest Rates, the Trustee shall calculate the amount of interest
payable during each Interest Period on the Bonds bearing interest at a Daily Interest Rate.
Interest accrued on the Bonds during each Interest Period (as defined below) shall be paid
to the Owner as of the Record Date (as defined below) on the next succeeding Interest Payment
Date (as defined below) and, while the Bonds bear interest at a Daily Interest Rate or other
-3-
Floating Interest Rate (as defined in the Official Statement), computed on the basis of a year of
365 or 366 days, as applicable, for the actual number of days elapsed.
"Interest Payment Date" means (a) during such time as the Bonds bear a Daily Interest
Rate, the fifth day after the Interest Accrual Date, and (b) any Conversion Date.
"Interest Period" means the period from and including the date interest starts to accrue
on the Bonds pursuant to a particular method of calculating interest to and including the next
succeeding Interest Accrual Date and each succeeding period from the day next succeeding such
Interest Accrual Date to and including (i) the next succeeding Interest Accrual Date or (ii) if
earlier, the day next preceding a Conversion Date.
"Interest Accrual Date" means, with respect to any Interest Period during which interest
on the Bonds accrues at a Daily Interest Rate, the last day of the calendar month.
"Record Date" means, when the Bonds bear interest at a Daily Interest Rate, the Interest
Accrual Date.
PURCHASE ON DEMAND OF OWNER
While the Bonds bear interest at a Daily Interest Rate, any Bond shall be purchased, on
the demand of the Owner thereof, on any Business Day at a purchase price equal to the principal
amount thereof plus accrued interest, if any, to the date of purchase (provided that if such
Business Day occurs prior to the Interest Payment Date for any Interest Period and after the
Record Date in respect thereto, the purchase price will equal the principal amount thereof plus
accrued interest, if any, only from such Record Date to the date of purchase), upon: (i) delivery
to the Remarketing Agent (and at the option of an Owner which is an Investment Company, with
a copy to the Trustee) at its Principal Office, by no later than 9:30 a.m. New York, New York
time, on such Business Day, of a written notice or a telephonic notice promptly confirmed by
tested telex, which states the principal amount of such Bonds to be purchased and the date on
which the same shall be purchased, and (ii) delivery of such Bond (with all necessary
endorsements) to the Remarketing Agent at its Principal Office, at or prior to 9:30 a.m., New
York, New York time, on the date specified in such notice.
Anything in the Indenture notwithstanding, (i) at any time when neither the Letter of
Credit nor an Alternate Credit Facility is outstanding, there shall be no purchases or sales of
Bonds as described above, and (ii) at any time during which the Letter of Credit or an Alternate
Credit Facility is outstanding, there shall be no sales of Bonds, if (A) there shall have occurred
and not have been cured or waived an Event of Default described in the Original Official
Statement in paragraph (a), (b), (c), (d) or (e) 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 in the Official Statement under
the caption "THE INDENTURE - Remedies" and such declaration has not been rescinded pursuant
to the Indenture.
is
REDEMPTION OF BONDS
Bonds bearing interest at a Daily Interest Rate are subject to optional redemption on any
Interest Payment Date by the Issuer in whole or in part (and if in part in an Authorized
Denomination), at the direction of the Company (but only with the timely written consent of the
Bank or of the Obligor on the Alternate Credit Facility, as the case may be), at the principal
amount thereof, plus accrued interest, if any, with 30 days' prior notice from the Company to the
Issuer and the Trustee.
The Bonds are also subject to redemption under certain circumstances including
(i) certain events relating to the Project, (ii) a Determination of Taxability, (iii) expiration or
termination of the Letter of Credit or Alternate Credit Facility and (iv) a Conversion Date as
described in the Original Official Statement under the captions "THE BONDS - Extraordinary
Optional Redemption of the Bonds," "- Mandatory Redemption of Bonds," "- Redemption
Upon Expiration or Termination of Letter of Credit or Alternate Credit Facility," and "-
Redemption Upon Conversion."
Notice requirements and other procedures relating to redemption of Bonds are as
described in the Original Official Statement under the caption "THE BONDS - Procedure for and
Notice of Redemption."
THE LETTER OF CREDIT AND THE CREDIT AGREEMENT
The following is a brief summary of certain provisions of the Letter of Credit and that
certain $800,000,000 Credit Agreement, dated July 6, 2006, as amended and supplemented,
among the Company, the financial institutions party thereto, the Administrative Agent (defined
below) and The Royal bank of Scotland plc, as syndication agent (together with all related
documents, the "Credit Agreement"). This summary is not a complete recital of the terms of the
Letter of Credit or the Credit Agreement and reference is made to the Letter of Credit or the
Credit Agreement, as applicable, in its entirety.
THE LETTER OF CREDIT
On the date of reoffering of the Bonds, JPMorgan will issue in favor of the Trustee a
Letter of Credit for the Bonds in the form of a direct pay letter of credit. The Letter of Credit
will be issued in the aggregate principal amount of the Bonds plus 65 days' interest at 12% per
annum, on the basis of a 365 day year (the "Original Stated Amount") (as from time to time
reduced and reinstated as provided in the Letter of Credit). The Letter of Credit will permit the
Trustee to draw up to an amount equal to the Original Stated Amount to pay the unpaid principal
thereof and accrued interest on the Bonds, subject to the terms, conditions and limitations stated
therein. The Letter of Credit will be substantially in the form attached hereto as APPENDIX E.
The Letter of Credit will expire on April 18, 2013. At any time there remains no less
than 90 days to the then current Stated Expiration Date (defined below), the Company may
request JPMorgan to extend such Stated Expiration Date for a period of one year. JPMorgan
-5-
may, in its sole discretion, extend the Stated Expiration Dated then in effect and will give written
notice of such election to extend to the Company and the Trustee within 30 days of receipt the of
request to extend. Failure by JPMorgan to notify the Company and the Trustee of any decision
Within 30 days will be deemed to be a rejection of such request. The date on which the Letter of
Credit expires as described in the preceding sentence and as it may be extended from time to
time, is defined in the Letter of Credit as the "Stated Expiration Date". For purposes of the
Letter of Credit, "Business Day" means any day other than a day on which banking institutions
in the city in which the principal corporate trust office of the Trustee or the principal corporate
trust office of the Tender Agent or the principal office of the Remarketing Agent is located, or
the city where the office of JPMorgan where drawings are made hereunder is located, are
required or authorized by law to remain closed, or other than a day on which the New York
Stock Exchange is closed.
Each drawing honored by JPMorgan under the Letter of Credit will immediately reduce
the available amount thereunder by the amount of such drawing. Any drawing to pay interest
will be automatically reinstated on the ninth (9th) Business Day following the date such drawing
is honored by the Bank, unless JPMorgan gives notice of an Event of Default under that certain
Reimbursement Agreement, dated April 18, 2012 (the "Reimbursement Agreement"), between
the Company and JPMorgan, pursuant to which the Letter of Credit will be issued. Any drawing
to pay the purchase price of a Bond shall be automatically reinstated upon receipt by JPMorgan,
or the Trustee on behalf of JPMorgan, of an amount equal to the purchase price of such Bonds
(or portion thereof) plus accrued interest on such Bonds as required under the Reimbursement
Agreement. See APPENDIX E.
CREDIT AGREEMENT
General. The Company is party to the Credit Agreement. In addition, the Company has
executed and delivered the Reimbursement Agreement requesting that JPMorgan issue a letter of
credit for the Bonds and governing the issuance thereof. The Letter of Credit is issued pursuant
to the Credit Agreement and the Reimbursement Agreement.
The Credit Agreement defines the relationship between the Company and the financial
institutions party thereto, including JPMorgan; neither the Issuer nor the Trustee has any interest
in the Credit Agreement or in any of the funds or accounts created under it. Under the Credit
Agreement and the Reimbursement Agreement, the Company has agreed to reimburse JlPMorgan
for any drawings under a Letter of Credit, to pay certain fees and expenses, to pay interest on any
unreimbursed drawings or other amounts unpaid, and to reimburse JPMorgan for certain other
costs and expenses incurred.
Defined Terms. Capitalized terms used in this section and in the Credit Agreement, as
applicable, that are not otherwise defined in this Reoffering Circular will have the meanings set
forth below.
"Administrative Agent" means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent for the Syndicate Banks and its successors in such capacity.
"Commitment" means (i) with respect to any Syndicate Bank listed on the signature
pages to the Credit Agreement, the amount set forth opposite its name on the commitment
schedule as its Commitment and (ii) with respect to each additional Syndicate Bank or assignee
which becomes a Syndicate Bank pursuant to the Credit Agreement, the amount of the
Commitment thereby assumed by it, in each case as such amount may from time to time be
reduced or increased pursuant to the Credit Agreement.
"Debt" of any Person means at any date, without duplication, (i) all obligations of such
Person for borrower money, (ii) all obligations of such Person evidenced by bonds (other than
surety bonds), debentures, notes or other similar instruments, (iii) all obligations of such Person
to pay the deferred purchase price of property or services, except trade accounts payable arising
in the ordinary course of business, (iv) all Capitalized Lease Obligations (as defined in the Credit
Agreement) of such Person, (v) all non-contingent reimbursement, indemnity or similar
obligations of such Person in respect of amounts paid under a letter of credit, surety bond or
similar instrument, (vi) all Debt of others secured by a Lien on any asset of such Person, whether
or not such Debt is assumed by such Person, and (vii) all Debts of others Guaranteed (as defined
in the Credit Agreement) by such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, or
any successor statute.
"ERISA Group" means all members of a controlled group of corporations and all trades
or business (whether or not incorporated) under common control which, together with Company,
are treated as a single employer under Section 414 of the Internal Revenue Code.
"Issuing Bank" means any Syndicate Bank designated by Company that may agree to
issue letters of credit pursuant to an instrument in form reasonably satisfactory to the
Administrative Agent, each in its capacity as an issuer of a letter of credit under the Credit
Agreement.
"Loans" means Committed Loans or Competitive Bid Loans (as such terms are defined
in the Credit Agreement) or any combination of the foregoing pursuant to the Credit Agreement.
"Material Debt" means Debt of the Company arising under a single or series of related
instruments or other agreements exceeding $35,000,000 in principal amount.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to
any or all of its functions under ERISA.
"Person" means any individual, a corporation, a partnership, an association, a trust or
any other entity or organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Reimbursement Obligations" means all such amounts paid by an Issuing Bank and
remaining unpaid by the Company after the date and time required for payment under the Credit
Agreement.
-7-
"Required Banks" means at any time Syndicate Banks having more than 50% of the total
Commitments under the Credit Agreement, or if the Commitments shall have been terminated,
holding more than 50% of the sum of the outstanding Loans and letter of credit liabilities.
"Syndicate Bank" or "Syndicate Banks" means, individually or collectively, each bank
or other financial institution listed on the signature pages to the Credit Agreement, each assignee
which becomes a Syndicate Bank pursuant to the Credit Agreement, and their respective
successors.
Events of Default and Remedies. Any one or more of the following events constitute an
event of default (an "Event of Default") under the Credit Agreement:
(a)the Company shall fail to pay when due any principal of any Loan or any
Reimbursement Obligation or shall fail to pay, within five days of the due date thereof,
any interest, commitment fees or facility fees payable hereunder or shall fail to cash
collateralize any letter of credit pursuant to the Credit Agreement;
(b)the Company shall fail to pay any other amount claimed by one or more
Syndicate Banks under the Credit Agreement within five days of the due date thereof,
unless (i) such claim is disputed in good faith by the Company, (ii) such unpaid claimed
amount does not exceed $100,000 and (iii) the aggregate of all such unpaid claimed
amounts does not exceed $300,000;
(c)the Company shall fail to observe or perform certain specified financial
covenants contained in the Credit Agreement;
(d)the Company shall fail to observe or perform any covenant or agreement
contained in the Credit Agreement (other than those covered by clause (a), (b) or (c)
above) for 15 days after written notice thereof has been given to the Company by the
Administrative Agent at the request of any Syndicate Bank;
(e)any representation, warranty, certification or statement made by the
Company in the Credit Agreement or in any certificate, financial statement or other
document delivered pursuant to the Credit Agreement shall prove to have been incorrect
in any material respect when made (or deemed made);
(1) the Company shall fail to make any payment in respect of any Material
Debt (other than Loans or any Reimbursement Obligation) or Material Hedging
Obligations (as defined in the Credit Agreement) when due or within any applicable
grace period;
(g) any event or condition shall occur which results in the acceleration of the
maturity of any Material Debt of the Company or enables the holder of such Material
Debt or any Person acting on such holder's behalf to accelerate the maturity thereof;
(h)the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property; or shall consent to any such relief or to the appoint of
or taking possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become due, or shall take any corporate action
to authorize any of the foregoing;
(i)an involuntary case or other proceeding shall be commenced against the
Company seeking liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Company under the federal bankruptcy laws as now or
hereafter in effect;
(j)the Company or any member of the ERISA Group shall fail to pay when
due an amount or amounts aggregating in excess of $25,000,000 which it shall have
become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
intent to terminate certain material plans identified in the Credit Agreement (each a
"Material Plan") shall be filed under Title IV of ERISA by any member of the ERIISA
Group, any plan administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose liability in excess
of $25,000,000 (other than for premiums under Section 4.007 of ERISA) in respect of, or
to cause a trustee to be appointed to administer any Material Plan or a proceeding shall be
instituted by a fiduciary of any multiemployer plan (identified in the Credit Agreement)
against any member of the ERISA Group to enforce Section 515 or 4219(c)(5) of ERISA
in respect of an amount or amounts aggregating in excess of $25,000,000, and such
proceeding shall not have been dismissed within 20 days thereafter; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that
any Material Plan must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA, with
respect to, one or more Multiemployer Plans which would cause one or more members of
the ERISA Group to incur a current payment obligation in excess of $25,000,000;
(k)a judgment or order for the payment of money in excess of $25,000,000
shall be rendered against the Company and such judgment or order shall continue
unsatisfied and unstayed for a period of 30 days;
(1) MidAmerican Energy Holdings Company or any wholly-owned subsidiary
thereof that owns common stock of the Company ("MidAmerican") shall fail to own
(directly or indirectly through one or more Subsidiaries) at least 80% of the outstanding
shares of common stock of the Company; any person or group of persons (within the
-9-
meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as amended), except
Berkshire Hathaway Inc. or any wholly-owned subsidiary thereof, shall acquire a
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities
and Exchange Commission under said Act) of 35% or more of the outstanding shares of
common stock of MidAmerican; or, during any period of 14 consecutive calendar months
commencing on or after March 21, 2006, individuals who were directors of the Company
on the first day of such period and any new director whose election by the board of
directors of the Company or nomination for election by the Company's shareholders was
approved by a vote of at least a majority of the directors then still in office who either
were directors at the beginning of the applicable period or whose election or nomination
for election was previously so approved, shall cease to constitute a majority of the board
of directors of the Company.
Upon the occurrence of any Event of Default under the Credit Agreement, the
Administrative Agent shall (i) if requested by the Required Banks, by notice to the Company
terminate the Commitments and the obligation of each Syndicate Bank to make Loans
thereunder and the obligation of each Issuing Bank to issue any letter of credit thereunder and
such obligations to make Loans and issue new letters of credit shall thereupon terminate, and (ii)
if requested by the Required Banks, by notice to the Company declare the Loans (together with
accrued interest thereon) and any outstanding Reimbursement Obligations in respect of any
drawing under a letter of credit issued under the Credit Agreement to be, and the same shall
thereupon become, immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company; provided that in the case of
any of the Events of Default specified in clause (h) or (i) above with respect to the Company,
without any notice to the Company or any other act by the Administrative Agent or the Syndicate
Banks, the Commitments shall thereupon terminate and the Loans (together with accrued interest
thereon) and any outstanding Reimbursement Obligations in respect of any drawing under a
letter of credit issued under the Credit Agreement shall become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which are hereby waived
by the Company.
The Company agrees, in addition to the Events of Default provisions above, that upon the
occurrence and during the continuance of any Event of Default, it shall, if requested by the
Administrative Agent upon the instruction of the Required Banks or any Issuing Bank having an
outstanding letter of credit issued under the Credit Agreement, pay to the Administrative Agent
an amount in immediately available funds (which funds shall be held as collateral pursuant to
arrangements satisfactory to the Administrative Agent) equal to the aggregate amount available
for drawing under all letters of credit issued under the Credit Agreement outstanding at such time
(or, in the case of a request by an Issuing Bank, all such letters of credit issued by it); provided
that, upon the occurrence of any Event of Default specified in clause (h) or (i) above with respect
to the Company, and on the scheduled termination date of the Credit Agreement, the Company
shall pay such amount forthwith without any notice or demand or any other act by the
Administrative Agent, any Issuing Bank or any Syndicate Bank.
-10-
REMARKETING AGENT
Barclays Capital, Inc. (the "Remarketing Agent"), will continue as remarketing agent for
the Bonds. Subject to certain conditions, the Remarketing Agent has agreed to determine the
rate of interest on the Bonds and use its best efforts to remarket all tendered Bonds.
In the ordinary course of its business, the Remarketing Agent has engaged, and may in
the future engage, in investment banking and/or commercial banking transactions with the
Company, its subsidiaries and its other affiliates, for which it has received and will receive
customary compensation.
The Remarketing Agent is Paid by the Company. The Remarketing Agent's
responsibilities include determining the interest rate from time to time and remarketing Bonds
that are optionally or mandatorily tendered by the owners thereof (subject, in each case, to the
terms of the Indenture and the Remarketing Agreement), all as further described in this
Reoffering Circular. The Remarketing Agent is appointed by the Company and paid by the
Company for its services. As a result, the interests of the Remarketing Agent may differ from
those of existing Holders and potential purchasers of Bonds.
The Remarketing Agent May Purchase Bonds for Its Own Accounts. The Remarketing
Agent acts as remarketing agent for a variety of variable rate demand obligations and, in its sole
discretion, may purchase such obligations for its own accounts. The Remarketing Agent is
permitted, but not obligated, to purchase tendered Bonds for its own accounts and, in its sole
discretion, may acquire such tendered Bonds in order to achieve a successful remarketing of the
Bonds (i.e., because there otherwise are not enough buyers to purchase the Bonds) or for other
reasons. However, the Remarketing Agent is not obligated to purchase Bonds, and may cease
doing so at any time without notice. The Remarketing Agent may also make a market in the
Bonds by purchasing and selling Bonds other than in connection with an optional or mandatory
tender and remarketing. Such purchases and sales may be at or below par. However, the
Remarketing Agent is not required to make a market in the Bonds. The Remarketing Agent may
also sell any Bonds it has purchased to one or more affiliated investment vehicles for collective
ownership or enter into derivative arrangements with affiliates or others in order to reduce its
exposure to the Bonds. The purchase of Bonds by the Remarketing Agent may create the
appearance that there is greater third party demand for the Bonds in the market than is actually
the case. The practices described above also may result in fewer Bonds being tendered in a
remarketing.
Bonds May Be Offered at Different Prices on Any Date Including an Interest Rate
Determination Date. Pursuant to the Indenture and the Remarketing Agreement, the
Remarketing Agent is required to determine the applicable rate of interest that, in its judgment, is
the lowest rate that would permit the sale of the Bonds bearing interest at the applicable interest
rate at par plus accrued interest, if any, on and as of the applicable interest rate determination
date. The interest rate will reflect, among other factors, the level of market demand for the Bonds
(including whether the Remarketing Agent is willing to purchase Bonds for its own accounts).
There may or may not be Bonds tendered and remarketed on an interest rate determination date,
the Remarketing Agent may or may not be able to remarket any Bonds tendered for purchase on
-11-
such date at par and the Remarketing Agent may sell Bonds at varying prices to different
investors on such date or any other date. The Remarketing Agent is not obligated to advise
purchasers in a remarketing if it does not have third party buyers for all of the Bonds at the
remarketing price. In the event the Remarketing Agent owns any Bonds for its own account, it
may, in its sole discretion in a secondary market transaction outside the tender process, offer
such Bonds on any date, including the interest rate determination date, at a discount to par to
some investors.
The Ability to Sell the Bonds Other Than Through the Tender Process May Be Limited.
The Remarketing Agent may buy and sell Bonds other than through the tender process.
However, it is not obligated to do so and may cease doing so at any time without notice and may
require Holders that wish to tender their Bonds to do so through the Trustee with appropriate
notice. Thus, investors who purchase the Bonds, whether in a remarketing or otherwise, should
not assume that they will be able to sell their Bonds other than by tendering the Bonds in
accordance with the tender process.
The Remarketing Agent May Resign, be Removed or Cease Remarketing the Bonds,
Without a Successor Being Named. Under certain circumstances the Remarketing Agent may be
removed or have the ability to resign or cease its remarketing efforts, without a successor having
been named, subject to the terms of the Indenture and the Remarketing Agreement.
BOND TERMS AND RELATED DOCUMENTS
Descriptions of provisions of the Bonds and summaries of the Agreement and the
Indenture are set forth in the Original Official Statement under the following captions and the
information under the following captions in the Original Official Statement is incorporated by
reference in this Supplement to Official Statement:
THE BONDS
"Alternate Credit Facility," "Substitute Letter of Credit" and "Termination of Letter of
Credit or Alternate Credit Facility" under "THE LETTERS OF CREDIT."
CONVERSION OF RATE
THE AGREEMENTS
THE INDENTURES
APPENDIX F - ALTERNATIVE INTEREST RATES
TAX EXEMPTION
Original Opinion. The opinion of Chapman and Cutler delivered on January 14, 1988
stated that, subject to the condition that the Issuer and the Company comply with certain
covenants made to satisfy pertinent requirements of the Internal Revenue Code of 1986 (the
"Code"), 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 Pollution Control
Facilities or any person considered to be related to such person (within the meaning of
-12-
Section 1 03(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
(since the Prior Bonds were issued prior to August 8, 1986). Interest on the Bonds will be taken
into account, however, in computing an adjustment used in determining the alternative minimum
tax for certain corporations. Ownership of the Bonds may result in other federal tax
consequences to certain taxpayers; no opinion was expressed regarding any such collateral
consequences arising with respect to the Bonds. In rendering this opinion, Chapman and Cutler
relied upon a certificate of the Company with respect to certain material facts solely within the
Company's knowledge relating to the Plant (as defined in the Indenture) and the application of
the proceeds of the Prior Bonds (as defined in the Indenture) and the Bonds.
In addition, such opinion stated that, under present Montana law, interest on the Bonds is
exempt from individual income taxes imposed by the State of Montana.
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
confirm that such covenants have been complied with.
Supplemental Opinion. Chapman and Cutler LLP will deliver an opinion in connection
with the delivery of the Letter of Credit to the effect that the delivery of the Letter of Credit (i) is
authorized under the Agreement and complies with the terms thereof and (ii) will not impair the
validity under the Act of the Bonds or will not cause the interest on the Bonds to become
includible in the gross income of the Owners thereof for federal income tax purposes. Except as
necessary to render the foregoing opinions, Chapman and Cutler LLP has not reviewed any
factual or legal matters relating to its opinion dated January 14, 1988 subsequent to its issuance
other than with respect to the Company in connection with (a) the adjustment of the interest rate
on the Bonds described in our opinion dated February 28, 1996, (b) the delivery of an Alternate
Credit Facility, dated as of December 19, 1996, (c) the delivery of an Alternate Credit Facility,
dated as of December 12, 2001, (d) delivery of the Prior Letter of Credit, dated September 15,
2004 and (e) the delivery of the Letter of Credit described herein. The opinion delivered in
connection with delivery of the Letter of Credit is not to be interpreted as a reissuance of the
original approving opinion as of the date of this Supplement to Official Statement.
MIscELLAI'wous
This Supplement to Official Statement has been approved by the Company for
distribution by the Remarketing Agent to current Bondholders and potential purchasers of the
Bonds. THE ISSUER MAKES NO REPRESENTATION WITH RESPECT TO AND HAS NOT
PARTICIPATED IN THE PREPARATION OF ANY PORTION OF THIS SUPPLEMENT TO OFFICIAL
STATEMENT.
-13-
APPENDIX A
PAcffIColtp
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 Agent, 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, or
that the information contained or incorporated herein by reference is correct as of any time after
the date hereof.
The Company, which includes PacifiCorp and its subsidiaries, is a United States
regulated electric company serving 1.7 million retail customers, including residential,
commercial, industrial and other customers in portions of the states of Utah, Oregon, Wyoming,
Washington, Idaho and California. PacifiCorp owns, or has interests in, 75 thermal,
hydroelectric, wind-powered and geothermal generating facilities, with a net owned capacity of
10,597 megawatts. PacifiCorp also owns, or has interests in, electric transmission and
distribution assets, and transmits electricity through approximately 16200 miles of transmission
lines. PacifiCorp also buys and sells electricity on the wholesale market with other utilities,
energy marketing companies, financial institutions and other market participants as a result of
excess electricity generation or other system balancing activities. The Company is subject to
comprehensive state and federal regulation. The Company's subsidiaries support its electric
utility operations by providing coal mining and environmental remediation services. The
Company is an indirect subsidiary of MidAmerican Energy Holdings Company ("MEHC"), a
holding company based in Des Moines, Iowa, that owns subsidiaries principally engaged in
energy businesses. MEHC is a consolidated subsidiary of Berkshire Hathaway Inc. ("Berkshire
Hathaway"). MEHC controls substantially all of the Company voting securities, which include
both common and preferred stock.
The Company's operations are exposed to risks, including general economic, political
and business conditions, as well as changes in laws and regulations affecting the Company or the
electric utility industry; changes in, and compliance with, environmental laws, regulations,
decisions and policies that could, among other items, increase operating and capital costs, reduce
generating facility output, accelerate generating facility retirements or delay generating facility
construction or acquisition; the outcome of general rate cases and other proceedings conducted
by regulatory commissions or other governmental and legal bodies; changes in economic,
industry or weather conditions, as well as demographic trends, that could affect customer growth
and usage, electricity supply or the Company's ability to obtain long-term contracts with
customers; a high degree of variance between actual and forecasted load that could impact the
Company's hedging strategy and the costs of balancing generation resources and wholesale
activities with its retail load obligations; hydroelectric conditions, as well as the cost, feasibility
and eventual outcome of hydroelectric relicensing proceedings, that could have a significant
impact on electric capacity and cost and the Company's ability to generate electricity; changes in
prices, availability and demand for both purchases and sales of wholesale electricity, coal,
natural gas, other fuel sources and fuel transportation that could have a significant impact on
A-i
generation capacity and energy costs; the financial condition and creditworthiness of the
Company's significant customers and suppliers; changes in business strategy or development
plans; availability, terms and deployment of capital, including reductions in demand for
investment-grade commercial paper, debt securities and other sources of debt financing and
volatility in the London Interbank Offered Rate, the base interest rate for the Company's credit
facilities; changes in the Company's credit ratings; the impact of derivative contracts used to
mitigate or manage volume, price and interest rate risk, including increased collateral
requirements, and changes in the commodity prices, interest rates and other conditions that affect
the fair value of derivative contracts; the impact of investment performance and changes in
interest rates, legislation, healthcare cost trends, mortality and morbidity on the Company's
pension and other postretirement benefits expense and funding requirements; unanticipated
construction delays, changes in costs, receipt of required permits and authorizations, ability to
fund capital projects and other factors that could affect future generating facilities and
infrastructure additions; the impact of new accounting guidance or changes in current accounting
estimates and assumptions on consolidated financial results; other risks or unforeseen events,
including the effects of storms, floods, litigation, wars, terrorism, embargoes and other
catastrophic events; and other business or investment considerations that may be disclosed from
time to time in the Company's filings with the United States Securities and Exchange
Commission (the "Commission") or in other publicly disseminated written documents. 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,
Portland, Oregon 97232; the telephone number is [phone]. The Company was initially
incorporated in 1910 under the laws of the state of Maine under the name Pacific Power & Light
Company. In 1984, Pacific Power & Light Company changed its name to PacifiCorp. In 1989, it
merged with Utah Power and Light Company, a Utah corporation, in a transaction wherein both
corporations merged into a newly formed Oregon corporation. The resulting Oregon corporation
was re-named PacifiCorp, which is the operating entity today.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports and other
information with the Commission. Such reports and other information (including proxy and
information 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 1-800-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 .
A-2
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 Form 10-K for the fiscal year ended December 31, 2011.
2.Current Report on Form 8-K, dated January 6, 2012.
3.Current Report on Form 8-K, dated March 6, 2012.
4.Current Report on Form 8-K, dated April 3, 2012.
5.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 Annual Report on Form 10-K for the year ended
December 31, 2011 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 10-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 10-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 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 PacifiCorp, 825 N.E. Multnomah, 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.
A-3
APPENDIX B
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
The following information concerning JPMorgan Chase Bank, National Association has
been provided by representatives of JPMorgan Chase Bank, National Association and has not
been independently confirmed or verified by the Issuer, the Company or any other party. No
representation is made by the Company or the Issuer as to the accuracy, completeness or
adequacy of such information and no representation is made as to the absence of material
adverse changes 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.
JPMorgan Chase Bank, National Association ("JPMorgan ") is a wholly owned
subsidiary of JPMorgan Chase & Co., a Delaware corporation whose principal office is located
in New York, New York. JPMorgan offers a wide range of banking services to its customers,
both domestically and internationally. It is chartered and its business is subject to examination
and regulation by the Office of the Comptroller of the Currency.
As of December 31, 2011, JPMorgan, had total assets of $1,811.7 billion, total net loans
of $580.1 billion, total deposits of $1,190.7 billion, and total stockholder's equity of $131.0
billion. These figures are extracted from JPMorgan's unaudited Consolidated Reports of
Condition and Income (the "Call Report") as of December 31, 2011, prepared in accordance
with regulatory instructions that do not in all cases follow U.S. generally accepted accounting
principles. The Call Report including any update to the above quarterly figures is filed with the
Federal Deposit Insurance Corporation and can be found at www.fdic.gov .
Additional information, including the most recent annual report on Form 10-K for the
year ended December 31, 2011, of JPMorgan Chase & Co., the 2011 Annual Report of
JPMorgan Chase & Co., and additional annual, quarterly and current reports filed with or
furnished to the Securities and Exchange Commission by JPMorgan Chase & Co., as they
become available, may be obtained without charge by each person to whom this Official
Statement is delivered upon the written request of any such person to the Office of the Secretary,
JPMorgan Chase & Co., 270 Park Avenue, New York, New York 10017 or at the SEC's website
at www.sec.gov .
The information contained in this Appendix relates to and has been obtained from
JPMorgan. The delivery of the Official Statement shall not create any implication that there has
been no change in the affairs of JPMorgan since the date hereof, or that the information
contained or referred to in this Appendix is correct as of any time subsequent to its date.
APPENDIX C
OFFICIAL STATEMENT DATED JANUARY 13,1988
c-i
[This Page Intentionally Left Blank]
FIVE NEW ISSUES Subject to compliance by the Company and the Issuer of each issue of Bonds with certain
covenants, in the opinion of Chapman and Cutler, Bond Counsel, under present law (i) interest
Customized Purchase Bonds* on each issue of Bonds will not be includible in gross income of the owners thereof for federal
CP Bonds* 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 related Project or any person considered to
be related to such person (within the meaning of Section 103(b)(13) of the Internal Revenue
Code of 1954, as amended) and (ii) interest on the Bends 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." Bond Counsel is also of
the opinion that such interest is exempt from certain Montana and Wyoming taxes, as the case
may be, as more fully discussed under the heading "TAX EXEMPTION" herein.
$164,700,000
Customized Purchase Pollution Control Revenue Refunding Bonds
(PacifiCorp Projects)
$17,000,000
Converse County, Wyoming
Series 1988
Due: January 1, 2014
$50,000,000
Sweetwater County, Wyoming
Series 1988A
Due: January 1, 2017
Dated: January 1, 1988
Due: As stated above
Price: 100%
(Plus accrued interest, if any)
$45,000,000
City of Forsyth, Rosebud
County, Montana
Series 1988
Due: January 1, 2018
$11,500,000
Sweetwater County, Wyoming
Series 1988B
Due: January 1, 2014
$41,200,000
City of Gillette, Campbell
County, Wyoming
Series 1988
Due: January 1, 2018
The Bonds of each issue will be limited obligations of the respective Issuer, payable solely from and secured by a pledge of
payments to be made under a separate Loan Agreement between the respective Issuer and
PacifiCorp
From the date of initial authentication and delivery of the Bonds through January 14, 1993, unless earlier terminated as described herein,
the Bonds of each issue will be payable from funds drawn under irrevocable Letters of Credit issued, with respect to the Converse Bonds,
by the Seattle Branch of
The Sumitomo Bank, Limited
with respect to the-Forsyth Bonds, by the Los Angeles Agency of
The Industrial Bank of Japan, Limited
with respect to the Gillette Bonds, by the New York Branch of
Deutsche Bank AG
and, with respect to both issues of Sweetwater Bonds, by the San Francisco Overseas Branch of
National Westminster Bank PLC
Under each Letter of Credit, the Trustee will be entitled to draw up to an amount sufficient to pay the principal of and, initially, up to
294 days' accrued interest on the related issue of Bonds to be used (a) to pay the principal of and interest on the Bonds when due and
(b) to pay the purchase price of Bonds tendered by the Owners thereof as provided in the related Indenture.
Upon the terms and conditions described herein, the Bonds of each issue will be purchased on the demand of the Owners thereof and
will be subject to redemption prior to maturity.
Initially, each Bond will bear interest from the date of actual authentication and delivery thereof at the CP Rate, determined by the
Remarketing Agent, for the CP Period selected by the Owner thereof, as described herein.
The Bonds of each issue are subject to conversion to interest rates other than the CP Rate as more fully described herein under the
caption "CONVERSION OF RATE." After such conversion, such Bonds may cease to be subject to purchase as described herein.
The Bonds of each issue are issuable as fully registered Bonds without coupons, initially in the denomination of $100,000 each or integral
multiples thereof. Interest on the Bonds while the Bonds bear interest at a CP Rate will be payable on the CP Date with respect to each
Bond by check mailed to the persons in whose names such Bond is registered at the close of business on the record date, which is the
fourth day preceding the CP Date for CP Periods longer than three days and the first day of a CP Period in all other cases. Interest may,
at the option of any Owner of Bonds in an aggregate principal amount of at least $1,000,000, be transmitted by wire transfer to such
Owner. Principal of and premium, if any, on all Bonds will be payable at the office of The First National Bank of Chicago, as Trustee, in
Chicago, Illinois.
The Bonds of each issue are offered when, as and if issued by the respective Issuers and accepted by the Underwriter, subject to prior
sale, to withdrawal or modification of the offer without notice and to the approval of legality by Chapman and Cutler, as Bond Counsel, the
approval of certain matters by Stoei Rives Boley Jones & Grey, Counsel for the Company, and by Kutak Rock & Campbell, counsel for
the Underwriter, and certain other conditions. It is expected that delivery of the Bonds will be made on or about January 14, 1988 in New York, New York against payment therefor.
E.F. Hutton & Company Inc.
Dated: January 13, 1988
* "Customized Purchase Bonds" and "CP Bonds" are trademarks of E. F. Hutton & Company Inc.
No broker, dealer, salesman or other person has been authorized to give any information or
to make any representations other than those contained in this Official Statement in connection
with the offering made hereby and, if given or made, such information or representations must
not be relied upon as having been authorized by the Issuers, PacifiCorp, The Sumitomo Bank,
Limited, The Industrial Bank of Japan, Limited, Deutsche Bank AG, National Westminster Bank
PLC or the Underwriter. 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, The Sumitomo Bank, Limited, The Industrial Bank of Japan, Limited, Deutsche
Bank AG, National Westminster Bank PLC or PacifiCorp since the date hereof. None of the Issuers
has or will assume any responsibility as to the accuracy or completeness of the information in
this Official Statement, other than that relating to itself under the caption "THE ISSUERS," all of
which has been furnished by others. Upon issuance, the Bonds of each issue 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
Official Statement or, other than the respective Issuers, approved the Bonds of each issue for sale.
TABLE OF CONTENTS
Page
Introductory Statement ........................................... 3
The Issuers ..................................................... 5
TheBonds ....................................................... 5
The Letters of Credit ............................................. 14
Conversion of Rate ............................................... 17
The Agreements ................................................. 18
The Indentures .................................................. 21
Underwriting .................................................... 26
Tax Exemption .................................................. 27
Certain Legal Matters ............................................ 28
Miscellaneous .................................................... 28
APPENDIX A—PacifiCorp
APPENDIX B—The Sumitomo Bank, Limited
APPENDIX C—The Industrial Bank of Japan, Limited
APPENDIX D—Deutsche Bank AG
APPENDIX E—National Westminster Bank PLC
APPENDIX F—Alternative Interest Rates
IN CONNECTION WITH THE OFFERING, THE UNDERWRITER MAY OVERALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
2
$164,7009000
Customized Purchase Pollution Control
Revenue Refunding Bonds
(PacifiCorp Projects)
INTRODUCTORY STATEMENT
This Official Statement is provided to furnish certain information with respect to the offer by the
respective issuers named below (individually, the "Issuer," and collectively, the "Issuers") of five
separate issues of revenue refunding bonds (collectively, the "Bonds") in the aggregate principal
amount of $164,700,000, as follows:
(i)$17,000,000 Converse County, Wyoming Customized Purchase Pollution Control Revenue
Refunding Bonds (PacifiCorp Project) Series 1988 (the "Converse Bonds");
(ii)$45,000,000 City of Forsyth, Rosebud County, Montana Customized Purchase Pollution
Control Revenue Refunding Bonds (PacifiCorp Project) Series 1988 (the "Forsyth Bonds");
(iii)$41,200,000 City of Gillette, Campbell County, Wyoming Customized Purchase Pollution
Control Revenue Refunding Bonds (PacifiCorp Project) Series 1988 (the "Gillette Bonds");
(iv)$50,000,000 Sweetwater County, Wyoming Customized Purchase Pollution Control
Revenue Refunding Bonds (PacifiCorp Project) Series 1988A (the "Sweetwater Series A Bonds");
and
(v)$11,500,000 Sweetwater County, Wyoming Customized Purchase Pollution Control
Revenue Refunding Bonds (PacifiCorp Project) Series 1988B (the "Sweetwater Series B Bonds,"
and, together with the Sweetwater Series A Bonds, the "Sweetwater Bonds").
Each issue of Bonds is being issued pursuant to a separate Trust Indenture dated as of January 1,
1988 (individually, an "indenture," and collectively, the "Indentures") between the respective Issuer
and The First National Bank of Chicago, as Trustee (the "Trustee"). The proceeds from the sale of
the Bonds will be loaned to PacifiCorp (formerly Pacific Power & Light Company) (the "Company")
pursuant to the terms of a separate Loan Agreement for each issue of Bonds dated as of January 1,
1988 (individually, an "Agreement," and collectively, the "Agreements") and used, together with
certain other moneys, to provide for the refunding (the "Refunding") of the outstanding bonds
(collectively, the "Prior Bonds") of each of the following issues of bonds: (a) in the case of the Converse
Bonds, the $17,000,000 Converse County, Wyoming, Floating Rate Monthly Demand Pollution Control
Refunding Revenue Bonds (PacifiCorp Project) Series 1984, previously issued to refund certain bonds
of Converse County, Wyoming ("Converse"), the proceeds of which were used to finance a portion
of the costs of the acquisition, construction, improvement and installation of certain air and water
pollution control facilities located at the Dave Johnston coal-fired, steam electric generating plant in
Converse County, Wyoming; (b) in the case of the Forsyth Bonds, the $45,000,000 City of Forsyth,
Rosebud County, Montana, Floating Rate Monthly Demand Pollution Control Revenue Bonds (Pacific
Power & Light Company Colstrip Project) Series 1981, the proceeds of which were used to finance
a portion of the cost of the Company's undivided interest in the acquisition and improvement of certain
air and water pollution control and solid waste disposal facilities at the Coistrip coal-fired, steam
electric generating plant located near the City of Forsyth ("Forsyth") in Rosebud County, Montana;
(c) in the case of the Gillette Bonds, the $41,295,000 outstanding principal amount of the City of Gillette,
Campbell County, Wyoming, Pollution Control Revenue Bonds (Pacific Power & Light Company
Project) Series 1984, the proceeds of which were used to finance a portion of the cost of the Company's
undivided interest in the acquisition and improvement of certain air and water pollution control
facilities at the Wyodak coal-fired, steam electric generating plant located near the City of Gillette
("Gillette") in Campbell County, Wyoming; and (d) in the case of the Sweetwater Series A Bonds and
the Sweetwater Series B Bonds, respectively, the $50,000,000 Sweetwater County, Wyoming, Floating
3
Rate Monthly Demand Pollution Control Revenue Bonds (Pacific Power & Light Company Project)
Series 1983 and the $11,500,000 Sweetwater County, Wyoming, Floating Rate Monthly Demand
Pollution Control Refunding Revenue Bonds (PacifiCorp Project) Series 1984, the proceeds of which
were used, respectively, to finance a portion of the Company's undivided interest (the "Sweetwater
Project") in the acquisition and improvement of certain air and water pollution control facilities at
the Jim Bridger coal-fired, steam electric generating plant located near Rock Springs in Sweetwater
County, Wyoming ("Sweetwater"), and to refund certain prior bond issues of Sweetwater, the proceeds
of which were used to finance a portion of the Sweetwater Project.
The Bonds of each issue will be limited, and not general, obligations of the Issuer thereof as
described under the caption "THE BONDS—Limited Obligations." Under the Agreements, the
Company is unconditionally obligated to pay amounts sufficient to provide for payment of the principal
of, premium, if any, and interest on the Bonds (the "Loan Payments") and for payment of the purchase
price of the Bonds.
The Bonds of each issue will be secured under a separate irrevocable Letter of Credit (individually,
the "Letter of Credit," and, collectively, the "Letters of Credit"). The Converse Bonds will be secured
by an irrevocable Letter of Credit to be issued by The Sumitomo Bank, Limited, a bank organized
under the laws of Japan, acting through its Seattle Branch. The Forsyth Bonds will be secured by
an irrevocable Letter of Credit to be issued by The Industrial Bank of Japan, Limited, a bank organized
under the laws of Japan, acting through its Los Angeles Agency. The Gillette Bonds will be secured
by an irrevocable Letter of Credit to be issued by Deutsche Bank AG, a bank organized under the
laws of the Federal Republic of Germany, acting through its New York Branch, and the two issues
of Sweetwater Bonds will be respectively secured by separate irrevocable Letters of Credit to be issued
by National Westminster Bank PLC, a bank organized under the laws of England, acting through
its San Francisco Overseas Branch. The Sumitomo Bank, Limited, The Industrial Bank of Japan,
Limited, Deutsche Bank AG and National Westminster Bank PLC are hereafter referred to
individually as the "Bank" and, collectively, as the "Banks." With respect to the Bonds of each issue,
the Trustee will be entitled to draw under the related Letter of Credit up to (a) an amount equal to
the principal amount of such Bonds to be used (i) to pay the principal of such Bonds, (ii) to enable
E. F. Hutton & Company Inc., as Remarketing Agent (the "Remarketing Agent"), to pay the portion
of the purchase price equal to the principal amount of such Bonds delivered or deemed delivered to
it for purchase and not remarketed, (iii) to enable the Trustee to pay the portion of the purchase price
equal to the principal amount of such Bonds delivered or deemed delivered to it for purchase, (iv) to
enable the Trustee to pay the purchase price of Bonds not retained by an Owner on a CP Date (as
hereafter defined) or (v) to enable the Company to purchase such Bonds in lieu of redemption under
certain circumstances, plus (b) an amount equal to 294 days' accrued interest on such Bonds (calculated
at an assumed maximum rate of 127o per annum), (i) to pay interest on such Bonds or (ii) to enable
the Trustee or the Remarketing Agent to pay the portion of the purchase price of such Bonds properly
delivered for purchase equal to the accrued interest, if any, on such Bonds. The Company is permitted
under the Agreements and the Indentures to provide a letter of credit (the "Substitute Letter of
Credit") issued by the same Bank which issued the Letter of Credit in substitution for which the
Substitute Letter of Credit is to be provided and which is identical to such Letter of Credit except
for (i) an increase or decrease in the Interest Coverage Rate (as hereafter defined), (ii) an increase
or decrease in the Interest Coverage Period (as hereafter defined) or (iii) any combination of (i) and
(ii). As used hereafter, "Letter of Credit" shall, unless the context otherwise requires, mean such
Substitute Letter of Credit from and after the issuance date thereof. The Company also is permitted
under the Agreements and Indentures to provide for the delivery of an alternate credit facility,
including a letter of credit of a commercial bank or a credit facility from a financial institution, or
any other credit support agreement or mechanism arranged by the Company (which may involve a
letter of credit or other credit facility or first mortgage bonds of the Company or an insurance policy),
the administration provisions of which are acceptable to the Trustee (an "Alternate Credit Facility"),
to replace a Letter of Credit or provide for the termination of a Letter of Credit or any Alternate
Credit Facility then in effect. The entity (other than the Company) obligated to make payments under
an Alternate Credit Facility shall be referred to hereafter as the "Obligor on the Alternate Credit
Facility." See "Tnt LErrus OF CREDIT" and "THE BONDS—Purchase of Bonds."
The Bonds of each issue contain substantially the same terms and provisions as, but will be
• entirely separate from, the Bonds of the other issues. The Bonds of one issue will not be payable from
or entitled to any revenues delivered to the Trustee in respect of Bonds of the other issues. The
mechanism for determining the interest rate may result in a rate for the Bonds of one issue different
from that of the Bonds of the other issues. Redemption of the Bonds of one issue may be made in
the manner described below without redemption of the other issues, and a default in respect of the
Bonds of one issue will not 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.
Brief descriptions of the Issuers, the Bonds, the Letters of Credit, the method by which the interest
rate on the Bonds is changed, the Agreements and the Indentures are included in this Official
Statement, including Appendix F hereto. Information regarding the business, properties and financial
condition of the Company is included in Appendix A attached hereto. Brief descriptions of The
Sumitomo Bank, Limited, The Industrial Bank of Japan, Limited, Deutsche Bank AG and National
Westminster Bank PLC are included as Appendices B, C, D and E, respectively, hereto. The
descriptions herein of the Agreements, the Indentures and the Letters of Credit are qualified in their
entirety by reference to such documents, and the descriptions herein of the 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 may be obtained from the principal corporate trust office of the Trustee
in Chicago, Illinois and, during the initial offering period, at the principal offices of E. F. Hutton &
Company Inc. and of Shearson Lehman Brothers Inc. in New York, New York.
THE ISSUERS
Forsyth is a municipal corporation and political subdivision duly organized and existing under
the Constitution and laws of the State of Montana. Forsyth is authorized by Sections 90-5-101 through
90-5-114, inclusive, of the Montana Code Annotated, as amended (the "Montana Act"), to issue the
Forsyth Bonds for the purpose of refunding all of the related Prior Bonds, to enter into the related
Indenture and the related Agreement and to secure such Bonds by an assignment to the Trustee of
the payments to be made by the Company under the related Agreement and a pledge of other moneys
deposited with the Trustee under the related Indenture.
Gillette is a municipal corporation and political subdivision, and Converse and Sweetwater are
political subdivisions, duly organized and existing under the Constitution and laws of the State of
Wyoming. Pursuant to Sections 15-1-701 to 15-1-710, inclusive, of the Wyoming Statutes (1977), as
amended (the "Wyoming Act"), Gillette, Converse and Sweetwater are authorized to issue their
respective Bonds for the purpose of refunding all or a portion of the related Prior Bonds, to enter
into the related Indenture and the related Agreement and to secure such Bonds by an assignment
to the Trustee of the payments to be made by the Company under the related Agreement and a pledge
of other moneys deposited with the Trustee under the related Indenture.
The Montana Act and the Wyoming Act are hereafter referred to collectively as the "Act."
The Bonds will be limited obligations of the respective Issuers as described under the caption
"THE BONDS—Limited Obligations."
THE BONDS
The Bonds of each issue will be independent of the others, and a default in respect of one issue
will not of itself constitute a default in respect of the other issues; however, the same occurrence
may constitute a default with respect to more than one issue. The five issues of Bonds contain
substantially the same terms and provisions, and the following is a summary of certain provisions
common to the Bonds of the five issues. Reference is hereby made to the Bonds in their entirety for
the detailed provisions thereof. All references in this description are to the documents or the Letters
of Credit (or Alternate Credit Facilities) corresponding to the respective issues of Bonds.
5
General
The Bonds will be dated January 1, 1988 and will mature as set forth on the cover page hereof.
Bonds authenticated prior to the first Interest Payment Date (as hereafter described) shall bear
interest from the date of the first authentication and delivery of Bonds. Bonds authenticatedon or
after the first Interest Payment Date thereon shall bear interest from the Interest Payment Date
next preceding the date of authentication thereof (except that if the Bonds bear interest at a Daily
Interest Rate, as hereafter described, the Bonds shall bear interest from the day next succeeding the
Interest Accrual Date, as hereafter described, next preceding such date of authentication), unless such
date of authentication shall be an Interest Payment Date to which interest on the Bonds has been
paid in full or duly provided for, in which case they shall bear interest from such date of authentication
(or, if the Bonds bear interest at a Daily Interest Rate, from the day next succeeding the Interest
Accrual Date next preceding such date of authentication); provided that if, as shown by the records
of the Registrar (as hereinafter defined) interest on the Bonds shall be in default, Bonds issued in
exchange for or upon the registration of transfer of Bonds shall bear interest from the date to which
interest has been paid in full on the Bonds or, if no interest has been paid on the Bonds, the date of
the first authentication and delivery of fully executed and authenticated Bonds under the Indenture.
Each Bond shall bear interest on overdue principal and, to the extent permitted by law, on overdue
premium, if any, and interest at the rates of interest borne by the Bonds during such time.
The First National Bank of Chicago is Trustee and Registrar under the Indenture and has its
corporate trust office in Chicago, Illinois. First Chicago Trust Company of New York has been
appointed agent of the Registrar under the Indenture. The Registrar may be removed or replaced
by the Issuer at the direction of the Company.
Principal of, premium, if any, and interest on the Bonds are payable at the place or places and
in the manner specified on the cover page of this Official Statement. Bonds may be transferred or
exchanged for Bonds of authorized denominations at the corporate trust office in New York, New
York of First Chicago Trust Company of New York, as agent of the Registrar, without cost, except
for any tax or other governmental charge.
E. F. Hutton & Company Inc. has, at the direction of the Company, been appointed Remarketing
Agent under the Indenture. The principal office of E. F. Hutton & Company Inc. is located in New
York, New York. The Remarketing Agent may be removed or replaced by the Issuer at the direction
of the Company and with the written consent of the Bank (or the Obligor on the Alternate Credit
Facility, as the case may be) and the Issuer. For a description of the proposed acquisition of
E. F. Hutton & Company. Inc. by Shearson Lehman Brothers Inc. and of Shearson Lehman Brothers
Inc. as successor Remarketing Agent, see the caption "UNDERWRITING" herein.
Interest on the Bonds
CP Rate. The Bonds shall initially bear interest at a OP Rate not exceeding 12% per annum,
which is, with respect to each Bond for a OP Period, an interest rate on such Bond established as
hereafter described. Such interest will be payable on the OP Date for such Bond. "OP Date" means,
with respect to each Bond, the day next succeeding the last day of a OP Period. "OP Period" means,
with respect to each Bond, each consecutive period (one to no more than 270 days, or one to 365 or
366 days, as applicable to a particular year, as determined by the Company, as described under the
caption "THE LETTERS OF CREDIT—Substitute Letter of Credit") established pursuant to the Indenture
during which such Bond shall bear interest at a particular OP Rate. "OP Date Parameters" means
the parameters stated in Exhibit E to the Indenture regarding allowable OP Periods. On the date
interest starts to accrue on the Bonds at a OP Rate and on each OP Date thereafter, except any CP
Date that is a Conversion Date, the Remarketing Agent shall determine for each OP Period allowable
under the OP Date Parameters the interest rate which, in the judgment of the Remarketing Agent,
when borne by a Bond having such a OP Period would be the minimum interest rate necessary to
enable the Remarketing Agent to sell such Bond on such date at a price equal to the principal
amount thereof.
Each Bond shall bear interest during the OP Period selected for such Bond at a rate per annum
equal to the interest rate determined as described above for such OP Period, or, in the event such
Bond is not remarketed, the OP Rate shall be the OP Rate equal to the interest rate for the shortest
allowable OP Period under the CP Date Parameters. If for any reason a OP Rate is not established
by the Remarketing Agent or the rate established by the Remarketing Agent is held to be invalid
or unenforceable by a court of law with respect to any CP Period, the CP Rate for such CP Period
shall equal the Floating Interest Index (as defined in the Indenture) determined by the Indexing Agent
(as defined in the Indenture) as of the date such CP Rate was to have been determined.
Conversion to Alternative Rates. The method of determining interest payable on the Bonds
may be converted from a CP Rate to another Floating Interest Rate (a Daily Interest Rate, a Weekly
Interest Rate or a Monthly Interest Rate), a Tender Interest Rate or a Fixed Interest Rate (as each
of those terms is described in Appendix F hereto) or from any such method of determination to any
other method of determination under the conditions described below under the caption "CONVERSION
OF RATE." The date on which the method of determining the interest on the Bonds is converted to
another method is a "Conversion Date." Certain terms applicable to the Bonds at such time as the
Bonds are not bearing interest at a CP Rate are described in Appendix F hereto.
Payment and Accrual of Interest. The Bonds shall bear interest from and including the date
of first authentication and delivery thereof until payment of the principal or redemption price thereof
shall have been made or provided for in accordance with the provisions of the Indenture, whether
at maturity, upon redemption, acceleration or otherwise, at the lesser of (i) the Maximum Rate (as
hereafter defined) or (ii) the rate determined as described under the caption "THE BONDS—Interest
on the Bonds" and in Appendix F hereto. "Maximum Rate" means (i) while a Letter of Credit (or an
Alternate Credit Facility, if applicable) is outstanding, the lesser of 20% per annum or the Interest
Coverage Rate and (ii) at all other times, 20% per annum. "Interest Coverage Rate" means the rate
specified in the Letter of Credit (or an Alternate Credit Facility, if applicable), initially 127-, which
is used to determine the maximum amount that can be drawn to pay interest on the Bonds (or the
portion of the purchase price corresponding to accrued interest) (the "Interest Component") for the
number of days specified in the Letter of Credit (the "Interest Coverage Period"), initially 294 days.
Interest accrued on the Bonds during each Interest Period (as hereafter described) shall be paid
to the Owner as of the Record Date (as hereafter described) on the next succeeding Interest Payment
Date and, while the Bonds bear a Floating Interest Rate, computed on the basis of a year of 365 or
366 days, as applicable to a particular year, for the actual number of days elapsed and, while the Bonds
bear a Fixed Interest Rate or a Tender Interest Rate, computed on the basis of a year of 360 days
consisting of twelve 30-day months.
"Authorized Denomination" means (i) $100,000 while the Bonds bear interest at a Floating Interest
Rate and (ii) $5,000 while the Bonds bear interest at a Tender Interest Rate or a Fixed Interest Rate
and, in all cases, integral multiples thereof.
"Business Day" means a day on which banks located in the city in which the principal office of
the Bank (or of the Obligor on the Alternate Credit Facility, as the case may be) is located and banks
located in the city in which the principal office of the Trustee is located are not required or authorized
by law to remain closed and are not closed, and on which The New York Stock Exchange and the
principal office of the Remarketing Agent are not closed.
"Interest Accrual Date" means, with respect to any Interest Period (i) during which interest on
the Bonds accrues at a CP Rate, the last day of the applicable CP Period, (ii) during which interest
on the Bonds accrues at a Daily Interest Rate, the last day of the calendar month, (iii) during which
interest on the Bonds accrues at the Weekly Interest Rate or the Monthly Interest Rate (as hereafter
described), the day next preceding the first Business Day of the next succeeding calendar month and
(iv) during which interest on the Bonds accrues at a Tender Interest Rate or at a Fixed Interest Rate,
the day next preceding January 1 and July 1 of each year.
"Interest Payment Date" means (a) during such time as the Bonds bear a Daily Interest Rate,
the fifth day after the Interest Accrual Date, (b) during such time as the Bonds bear interest
determined by any other method, the day next succeeding the Interest Accrual Date and (c) any
Conversion Date.
"Interest Period" means the period from and including the date interest starts to accrue on the
Bonds pursuant to a particular method of calculating interest to and including the next succeeding
Interest Accrual Date and each succeeding period from the day next succeeding such Interest Accrual
Date to and including (i) the next succeeding Interest Accrual Date or (ii) if earlier, the day next
preceding a Conversion Date.
"Owner" means the person or persons in whose name any Bond is registered on the books of
the Issuer maintained by the Registrar.
"Record Date" means (a) when a Bond bears interest at a CP Rate, the third day next preceding
the Interest Accrual Date, except for a Bond with a CP Period of less than four days, in which case
the Record Date means the first day of such CP Period; (b) when the Bonds bear interest at a Daily
Interest Rate, the Interest Accrual Date; (c) when the Bonds bear interest at a Weekly Interest Rate,
the day on which the Weekly Interest Rate applicable to the Interest Accrual Date is determined;
(d) when the Bonds bear interest at a Monthly Interest Rate, the third day next preceding the Interest
Accrual Date; and (e) when the Bonds bear a Tender Interest Rate or a Fixed Interest Rate, the
fifteenth day of the calendar month next preceding any Interest Payment Date.
Purchase of Bonds
Purchase While Bonds Bear CP Rate. On the CP Date with respect to a Bond, such Bond shall
be purchased at a purchase price equal to the principal amount thereof upon delivery of the Bond
(with all necessary endorsements) to the Remarketing Agent. If the Owner elects not to have his Bond
purchased on such CP Date, the Owner shall give telephonic or written notice to the Remarketing
Agent not later than 10:00 a.m., New York, New York time, on the Business Day next preceding the
CP Date stating that the Owner elects not to have his Bond purchased on such CP Date and stating
the next CP Period (which shall be within the CP Date Parameters) for such Bond, in which event
and upon receipt of appropriate information confirmed in writing from the Remarketing Agent, the
Trustee shall issue a new Bond to such Owner reflecting the next CP Period in exchange for the Bond
then held by such Owner. Bonds to be purchased which are not delivered by the Owner thereof shall
be deemed to have been delivered by the Owner thereof for purchase and to have been purchased,
provided that there have been irrevocably deposited with the Trustee moneys in accordance with the
Indenture in an amount sufficient to pay the purchase price of such Bonds. Moneys deposited with
the Trustee for such purchase of Bonds shall be held in trust in a separate escrow account without
liability for interest thereon and shall be paid to the Owners of such Bonds upon presentation thereof.
The Trustee shall on the last day of each month give written notice to the Company whether Bonds
have not been delivered, and upon direction to do so by the Company, the Trustee shall give notice
by mail to each Owner whose Bonds are deemed to have been purchased that such moneys are on
deposit at the principal office of the Trustee and that interest on such Bonds ceased to accrue on the
applicable CP Date.
While Bonds Bear Alternative Rates. While a Bond bears a Daily Interest Rate, a Weekly
Interest Rate, a Monthly Interest Rate or a Tender Interest Rate, such Bond will be purchased on
the demand of the Owner thereof, as described in Appendix F hereto.
Funds for Purchase ofBonds. On the date on which Bonds delivered to the Remarketing Agent
or the Trustee for purchase as specified above under "THE BoNIs—Purchase of Bonds—Purchase
While Bonds Bear CP Rate" or as described in Appendix F hereto are to be purchased, such Bonds
shall be purchased with immediately available funds at a purchase price equal to the principal amount
thereof, plus accrued interest, if any. Funds for the payment of such purchase price shall be derived
solely from the following sources in the order of priority indicated, neither the Trustee nor the
Remarketing Agent being obligated to use funds from any other source:
(a)Available Moneys (as hereinafter defined) directed by the Company to be used to purchase
Bonds as described in the indenture;
(b)proceeds of the sale of such Bonds by the Remarketing Agent;
(c)Available Moneys or moneys drawn under the Letter of Credit or Alternate Credit Facility,
as the case may be, for the purchase of defeased Bonds;
(d)proceeds of a drawing under the Letter of Credit or an Alternate Credit Facility, as the
case may be, for such purchase; and
(e)any other moneys furnished by the Company 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) during such time as a Letter of Credit or an Alternate Credit
Facility which does not consist of first mortgage bonds of the Company is outstanding, (i) moneys
on deposit in trust with the Trustee for a period of 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, (ii) proceeds of the issuance of refunding bonds if, in the written opinion of nationally
recognized counsel experienced in bankruptcy matters and acceptable to the Issuer and the Trustee
(which opinion shall be delivered to the Trustee at or prior to the time of the deposit of such proceeds
with the Trustee), the deposit and use of such proceeds 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 and (iii) any other money (x) approved in
writing by Moody's Investors Service ("Moody's"), if the Bonds are then rated by Moody's, and
Standard and Poor's Corporation ("S&P"), if the Bonds are then rated by S&P and (y) the application
of which will not, in the written opinion of nationally recognized counsel experienced in bankruptcy
matters and acceptable to the Issuer and the Trustee (which opinion shall be delivered to the Trustee
at or prior to the time of such application), constitute a voidable preference under Section 544 or 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, and (b) at any time that a Letter of Credit or an Alternate
Credit Facility is not outstanding, or if an Alternate Credit Facility consisting of first mortgage bonds
of the Company is outstanding, any moneys on deposit with the Trustee and proceeds from the
investment thereof.
Remarketing of Bonds
While the Bonds bear interest at a CP Rate, the Remarketing Agent shall offer for sale and use
its best efforts to remarket any Bond to be purchased on a CF Date on such CF Date, any such
remarketing to be made at a price equal to the principal amount thereof and for such CP Periods
as are available within the CF Date Parameters. In the event more than one prospective purchaser
has offered to purchase a Bond on a CF Date, the Remarketing Agent shall remarket the Bond to
the purchaser from among such prospective purchasers who has selected the next CP Period for such
Bond which will, in the Remarketing Agent's judgment, taking into consideration the overall yield
curve determined as of such CP Date and projected market conditions during the 270 days or 365 or
366 days, as applicable to a particular year (depending on the maximum length of the then current
Interest Coverage Period), next succeeding such CF Date, be the most beneficial for the financing
program while the Bonds bear interest at a CP Rate. If a Bond cannot be remarketed, the CF Date
for such Bond shall be the next Business Day. While Bonds bear a Daily Interest Rate, a Weekly
Interest Rate, a Monthly Interest Rate or a Tender Interest Rate, the Remarketing Agent will offer
for sale and use its best efforts to remarket Bonds to be purchased on the dates and at the purchase
prices as described in this Official Statement.
No Purchases or Sales After Certain Defaults. Anything in the Indenture to the contrary
notwithstanding, (i) at any time when neither the Letter of Credit nor an Alternate Credit Facility,
as the case may be, is outstanding, there shall be no purchases or sales of Bonds as described above,
and (ii) at any time during which the Letter of Credit or an Alternate Credit Facility, as the case may
be, is outstanding, there shall be no sales of Bonds, if, in either case, there shall have occurred and
not have been cured or waived an Event of Default described in paragraph (a), (b), (c), (d) or (e) under
the caption "THE INDENTURES—Defaults" of which the Remarketing Agent and the Trustee have
actual knowledge.
Limited Obligations
The Bonds, together with the premium, if any, and interest thereon, are limited, and not general,
obligations of the Issuer not constituting or giving rise to a pecuniary liability of the Issuer or any
charge against its general credit or taxing powers nor an indebtedness of or a loan of credit thereof
and shall be payable solely from the revenues to be received by the Issuer under the Agreement and
from any other moneys made available to the Issuer for such purpose, including moneys drawn under
the Letter of Credit or an Alternate Credit Facility, as the case may be. The Issuer shall not be obligated
to pay the purchase price of the Bonds from any source.
Mandatory Redemption of Bonds
While the Bonds bear interest at a Tender Interest Rate or at a Fixed Interest Rate, the Bonds
are subject to mandatory redemption in whole or in part at the principal amount thereof plus accrued
interest to the date of redemption within 180 days following a "Determination of Taxability" as
described below. The Bonds shall be redeemed either in whole or in part in such principal amount
that the interest payable on the Bonds remaining outstanding after such redemption would not be
included in the gross income of any Owner thereof, other than an Owner of a Bond who is a "substantial
user" of the Facilities (as hereafter defined) or a "related person" within the meaning of Section
103(bX13) of the Internal Revenue Code of 1954, as amended (the "1954 Code").
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 Internal
Revenue Code of 1986 (the "Code") (other than an Owner who is a "substantial user" or "related
person" within the meaning of Section 103(b)(13) 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 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 aconclusion of any appellate review, if sought, then the Trustee
shall promptly give notice thereof to the Company, the Bank (or the Obligor on the 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 Agreement and 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 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 Agreement, which failure results in a Determination of Taxability.
A DETERMINATION OF TAXABILITY MAY NOT OCCUR FOR A SUBSTANTIAL PERIOD
OF TIME AFTER INTEREST FIRST BECOMES INCLUDIBLE IN THE GROSS INCOME OF
OWNERS OF THE BONDS. IN SUCH EVENT, THE TAX LIABILITY OF OWNERS OF THE
BONDS MAY EXTEND TO YEARS FOR WHICH INTEREST WAS RECEIVED ON THE BONDS
AND FOR WHICH THE RELEVANT STATUTE OF LIMITATIONS HAS NOT YET RUN.
MOREOVER, OWNERS OF BONDS WILL NOT RECEIVE ANY ADDITIONAL INTEREST,
PREMIUM OR OTHER PAYMENT TO COMPENSATE THEM FOR FEDERAL INCOME TAXES,
INTEREST AND PENALTIES WHICH MAY BE ASSESSED WITH RESPECT TO SUCH
INTEREST.
Optional Redemption of Bonds
(a)During any CP Period, the Bonds shall be subject to optional redemption on any Business
Day by the Issuer, in whole or in part (and if in part, in an Authorized Denomination), at the direction
of the Company (but only with the timely written consent of the Bank or of the Obligor on the Alternate
-Credit Facility, as the case may be), at the principal amount thereof plus accrued interest, if any, on
30 days' prior notice from the Company to the Issuer and the Trustee.
(b)While the Bonds bear interest at a Daily Interest Rate, a Weekly Interest Rate or a Monthly
Interest Rate, the Bonds shall be subject to optional redemption on any Interest Payment Date by
the Issuer, in whole or in part (and if in part, in an Authorized Denomination), at the direction of the
Company (but only with the timely written consent of the Bank or of the Obligor on the Alternate
10
Credit Facility, as the case may be), at the principal amount thereof plus accrued interest, if any, with
30 days' prior notice from the Company to the Issuer and the Trustee.
(c) While the Bonds bear interest at a Fixed Interest Rate or at a Tender Interest Rate, the Bonds
shall be subject to optional redemption on any Interest Payment Date by the Issuer, in whole or in
part (and if in part, in an Authorized Denomination), at the direction of the Company (but only with
the timely written consent of the Bank or of the Obligor on the Alternate Credit Facility, as the case
may be), with 30 days' prior notice from the Company to the Issuer and the Trustee; provided, however,,
that the Bonds shall not be redeemable during the No-Call Period shown below, which shall begin
on the first day of the Fixed Rate Period or Tender Period. On and during the six months after the
Interest Payment Date that ends the No-Call Period (or the next succeeding Interest Payment Date,
if the No-Call Period does not end on an Interest Payment Date), the Bonds shall be redeemable at
the percentage of their principal amount shown in the Initial Redemption Price column plus interest
accrued to the redemption date. The redemption price shall decline semiannually by the amount shown
in the SemiAnnual Reduction in Redemption Price column until the Bonds shall be redeemable without
premium in the year or portion of a year indicated in the No Premium column and in any later years
or periods in the Fixed Rate Period or Tender Period.
Fixed Rate Period
or Tender Period
Equal to
or Greater But Less
Than Than
18 Years
12 Years
9 Years
7 Years
5 Years
3 Years
2 Years
1 Year
6 Months
N/A
18 Years
12 Years
9 Years
7 Years
5 Years
3 Years
2 Years
1 Year
No-Call
Period
5 Years
5 Years
5 Years
5 Years
3 Years
2 Years
1 Year
6 Months
6 Months
Initial
Redemption
Price
103 %
103
102
101
101
100½
1001/4
100'/s
100
SemiAnnual
Reduction in
Redemption
Price
'/2%
'/2
½
'/2
½
¼
¼
N/A
No Premium
9th Year
9th Year
8th Year
7th Year
5th Year
4th Year
18th Month
12th Month
N/A
If the Fixed Rate Period or Tender Period is less than six months, the Bonds will not be redeemable
pursuant to this subparagraph. While a Letter of Credit or an Alternate Credit Facility is outstanding,
the Company may only cause a redemption of Bonds pursuant to this subparagraph which would
require a payment of a premium if on the date of the giving of notice of redemption the Trustee has
Available Moneys in the Bond Fund or can draw under the Letter of Credit or an Alternate Credit
Facility, as the case may be, in an amount sufficient to pay such premium due on the date of redemption.
The initial Letter of Credit does not provide for drawings in respect of the amount of any such
redemption premium.
If the interest rate borne by the Bonds is converted pursuant to the Indenture, and if in connection
with such conversion the Company directs in writing to the Trustee and the Remarketing Agent
pursuant to the Indenture that the foregoing schedule of premiums and No-Call Periods be revised
and specifies the new premiums and No-Call Periods, the foregoing schedule of premiums and No-Call
Periods shall be revised in accordance with such direction of the Company.
(d) At any time, the Bonds shall be subject to redemption by the Issuer in whole or in part (and
if in part, in an Authorized Denomination), at the direction of the Company (but only with the timely
written consent of the Bank if required by the Letter of Credit or, if applicable, of the Obligor on
the Alternate Credit Facility if required by such Alternate Credit Facility), with 30 days' prior notice
from the Company to the Issuer and the Trustee, at the principal amount thereof plus accrued interest
to the redemption date, but without premium, if the Company shall deliver a certificate stating that
one of the following events has occurred:
(i)the Company shall have determined that the continued operation of the Project (as defined
in the Indenture) is impracticable, uneconomical or undesirable for any reason; or
(ii)the Company shall have determined that the continued operation of the pollution control
facilities or the solid waste disposal facilities, as the case may be (the "Facilities"), at the steam
11
electric generating plant of which the Project is a part 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 Facilities, or other liabilities
or burdens with respect to the Facilities 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 Facilities; or
(iii)all or substantially all of the Facilities or the Project shall have been condemned or taken
by eminent domain; or
(iv)the operation of the Facilities or the Project 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.
Redemption Upon Expiration or Termination
of Letter of Credit or Alternate Credit Facility
Except for Bonds redeemed as described under "THE BONDS—Redemption Upon Conversion,"
the Bonds are subject to mandatory redemption by the Issuer, in whole, at a price equal to the principal
amount thereof, plus accrued interest, if any, on the earlier of (i) the Interest Payment Date next
preceding the date of the expiration of the term of the Letter of Credit or the term of the Alternate
Credit Facility except as provided in the following clause (ii), or (ii) a Business Day not less than five
days next preceding the Business Day next preceding the termination date of the Letter of Credit
or Alternate Credit Facility specified by the Company in a notice given by the Company as described
herein in the second paragraph under the caption "THE LETTERS OF CREDIT—Alternate Credit
Facility," or in the second paragraph under the caption "THE LETTERS OF CREDIT—Termination of
Letter of Credit or Alternate Credit Facility," provided that there shall not be so redeemed (a) Bonds
delivered to the Remarketing Agent or the Trustee for purchase on such Interest Payment Date or
on such Business Day or on any Business Day from the date of notice of such redemption through
the date of such redemption, (b) Bonds with respect to which the Trustee shall have received written
directions not to so redeem the same from the Owners thereof, (c) Bonds purchased or deemed to
have been purchased pursuant to the Indenture as described below under "THE BONDS—Purchase
by Company in Lieu of Redemption," and (d) Bonds issued in exchange for or upon the registration
of transfer of Bonds referred to in the preceding clauses (a) and (b).
An Owner of Bonds may direct the Issuer not to redeem any Bond or Bonds owned by it by
delivering to the Trustee at its principal office on or before the third Business Day preceding the date
fixed for such redemption an instrument or instruments in writing executed by such Owner which,
among other things, (1) specifies the numbers and denominations of the Bonds held by such Owner,
(ii) specifically acknowledges each of the matters set forth in a notice given by the Trustee, and (iii)
directs the Issuer not to redeem such Bonds. Any such instrument delivered to the Trustee shall be
irrevocable with respect to the redemption for which such instrument was delivered and shall be
binding upon subsequent Owners of such Bonds, including Bonds issued in exchange therefor or upon
the registration of the transfer thereof.
Redemption Upon Conversion
The Bonds shall be subject to mandatory redemption by the Issuer, in whole, on a Conversion
Date, at the principal amount thereof or, in the case of Bonds to be redeemed upon conversion from
a Tender Interest Rate or a Fixed Interest Rate, at the percentage of their principal amount at which
they would be redeemed as described above under paragraph (c) of "THE BONDS—Optional
Redemption of Bonds" on the Conversion Date plus accrued interest, if any; provided that there shall
not be so redeemed (a) Bonds delivered to the Remarketing Agent or the Trustee for purchase on
such Conversion Date or on any Business Day from the date notice of such redemption is given through
the date of such redemption, (b) Bonds with respect to which the Trustee shall have received written
directions not to so redeem the same from the Owners thereof, (c) Bonds purchased or deemed to
have been purchased pursuant to the Indenture as described below under "THE BoNDs—Purchase
by Company in Lieu of Redemption," and (d) Bonds issued in exchange for or upon the registration
12
of transfer of Bonds referred to in clauses (a) and (b) above. While a Letter of Credit or an Alternate
Credit Facility is outstanding, the Company may only cause a redemption of Bonds pursuant to this
paragraph which would require a payment of a premium if on the date of the giving of notice of
redemption the Trustee can draw under the Letter of Credit or an Alternate Credit Facility, as the
case may be, in an amount sufficient to pay such premium due on the date of redemption. The initial
Letter of Credit does not provide for drawings in respect of the amount of any such redemption
premium.
An Owner may direct the Issuer not to redeem any Bond or Bonds owned by it by delivering
to the Trustee at its principal office on or before the third Business Day (sixth Business Day if the
Bonds are to be converted to a Tender Interest Rate or a Fixed Interest Rate) preceding the date
fixed for such redemption an instrument or instruments in writing executed by such Owner which,
among other things, (i) specifies the numbers and denominations of the Bonds held by such Owner,
(ii) specifically acknowledges each of the matters set forth in a notice given by the Trustee, and (iii)
directs the Issuer not to redeem such Bonds. Any such instrument delivered to the Trustee shall be
irrevocable with respect to the redemption for which such instrument is delivered and shall be binding
upon subsequent Owners of such Bonds, including Bonds issued in exchange therefor or upon the
registration of the transfer thereof.
Denomination Redemption
The Bonds or portions thereof are subject to mandatory redemption by the Issuer on the Interest
Payment Date upon which the Bonds begin to accrue interest at a Floating Interest Rate following
conversion from a Tender Interest Rate or a Fixed Interest Rate in such amounts so that all
outstanding Bonds are in Authorized Denominations.
Purchase by Company in Lieu of Redemption
The Company shall have the right to purchase or cause to be purchased Bonds to be redeemed
as described above under "THE BONDS—Redemption Upon Expiration or Termination of Letter of
Credit or Alternate Credit Facility," "THE BONDS—Redemption Upon Conversion" and "THE
BONDS—Denomination Redemption" at a purchase price equal to the principal amount of the Bonds
to be so purchased plus accrued interest, if any, or in the case of a purchase on conversion from a
Fixed Interest Rate or a Tender Interest Rate, the redemption price for redemption of such Bonds
on the Conversion Date as described above under (c) of "THE BONDS—Optional Redemption of Bonds."
Moneys for the payment of the purchase price shall be derived, in the following order of priority, from:
(i) Available Moneys furnished by the Company for such purpose, (ii) proceeds of the sale of such
Bonds, (iii) Available Moneys or moneys drawn under the Letter of Credit or Alternate Credit Facility,
as the case may be, for the purchase of defeased Bonds, (iv) moneys drawn under the Letter of Credit
or an Alternate Credit Facility, as the case may be, for such .purpose and (v) any other moneys
furnished by the Company for such purpose; provided, however, that funds for the payment of the
purchase price of defeased Bonds shall be derived only from the sources described in (ii) and (iii) above,
in such order of priority; and provided further that if in connection with such redemption, the Letter
of Credit or an Alternate Credit Facility which does not consist of first mortgage bonds of the Company
is replaced with an Alternate Credit Facility consisting of first mortgage bonds of the Company or
is not being replaced by any other Alternate Credit Facility, moneys for the payment of the purchase
price of the Bonds may not be derived from (ii) above. Bonds to be so purchased pursuant to the
Indenture on the date fixed for redemption of such Bonds which are not delivered on such date will
nonetheless be deemed to have been delivered for purchase by the Owners thereof and to have been
purchased pursuant to the Indenture. The Trustee shall hold moneys for such purchase of Bonds,
without liability for interest thereon, for the benefit of the former Owner of the Bond on such date
of purchase, who shall thereafter be restricted exclusively to such moneys for any claim of whatever
nature on such Owner's part under the Indenture or on, or with respect to, such Bond. Any moneys
so deposited with and held by the Trustee not so applied to the payment of Bonds within six months
after such date of purchase shall be paid by the Trustee to the Bank (or the Obligor on the Alternate
Credit Facility, as the case may be) to the extent of any amount payable under the Reimbursement
Agreement (as defined below) and the balance to the Company upon the written direction of the
Company, and thereafter the former Owners shall be entitled to look only to the Company for payment,
13
and then only to the extent of the amount so repaid, and the Company shall not be liable for any interest
thereon and shall not be regarded as a trustee of such money.
Procedure for and Notice of Redemption
If less than all of the Bonds shall be called for redemption, the particular Bonds or portions thereof
to be redeemed shall be selected by the Trustee, in such manner as the Trustee in its sole discretion
may deem proper, in the principal amount designated by the Company or otherwise as required by
the Indenture. 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
denomination in which Bonds are then authorized to be issued at the time of such redemption. 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. 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 Indenture, at least 10 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.
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 moneys sufficient to pay the principal
of, premium, if any, and interest on such Bonds to be redeemed. If such moneys are not so received,
the Issuer will not redeem such Bonds and the Trustee shall give notice, in the manner in which the
notice of redemption was given, that such redemption will not take place.
THE LETTERS OF CREDIT
The following is a brief description of each Letter of Credit and certain of the terms common
to the Letters of Credit and the agreements dated as of January 1, 1988 between the Company and
the Banks pursuant to which such Letters of Credit are issued (individually, a "Reimbursement
Agreement" and, collectively, the "Reimbursement Agreements," which term shall also include the
document pursuant to which an Alternate Credit Facility is issued). All references in this description
are to the documents or the Letters of Credit (or Alternate Credit Facilities) corresponding to the
respective issues of Bonds.
The Letter of Credit will be an irrevocable obligation of the Bank which will expire at the close
of the Bank's business on January 14, 1993, unless earlier terminated or otherwise extended, to pay
to the -Trustee, upon request and in accordance with the terms thereof, up to (a) an amount equal
to the outstanding principal amount of the Bonds to be used (i) to pay the principal of the Bonds, (ii)
to enable the Remarketing Agent to pay the portion of the purchase price equal to the principal amount
of Bonds delivered to it for purchase and not remarketed, (iii) to enable the Trustee to pay the portion
of the purchase price equal to the principal amount of Bonds delivered to it for purchase, (iv) to enable
the Trustee to pay the purchase price of Bonds not retained by an Owner on a CF Date or (v) to enable
the Company to purchase Bonds in lieu of redemption under certain circumstances, plus (b) an amount
equal to 294 days' accrued interest on the Bonds (calculated at a rate of 127c per annum and on the
basis of a year of 365 days), to be used (i) to pay interest on the Bonds or (ii) to enable the Trustee
or the Remarketing Agent to pay the portion of the purchase price of the Bonds properly delivered
for purchase equal to the accrued interest, if any, on such Bonds. The Company is permitted under
the Agreement and the Indenture to secure an extension of the Letter of Credit beyond the expiration
date of the then current Letter of Credit, but the Bank is under no obligation to agree to such an
extension.
The Bank's obligation under the Letter of Credit will be reduced to the extent of any drawings
thereunder. However, with respect to a drawing by the Trustee to enable the Remarketing Agent
or the Trustee to pay the purchase price of Bonds delivered for purchase and not remarketed, such
amounts shall be immediately reinstated upon reimbursement. With respect to a drawing by the
Trustee for the payment of interest on the Bonds, the amount that may be drawn under the Letter
of Credit will be automatically reinstated to the extent of such drawing as of the close of business
14
on the ninth Business Day following such drawing unless the Bank shall have notified the Trustee
within nine Business Days after such drawing that the Company has failed to reimburse the Bank
or to cause it to be reimbursed for such drawing.
Upon an acceleration of the maturity of the Bonds due to an event of default under the Indenture,
the Trustee will be entitled to draw on the Letter of Credit, if it is then in effect, to the extent of the
aggregate principal amount of the Bonds outstanding, plus up to 294 days' interest accrued and unpaid
on the Bonds, less amounts paid in respect of principal or interest for which the Letter of Credit has.
not been reinstated as described above.
Upon the earliest of (i) the close of business on January 14, 1998, unless otherwise extended
pursuant to an agreement between the Bank and the Company, (ii) the making of a final drawing under
the Letter of Credit, or (iii) the date the Trustee surrenders the Letter of Credit to the Bank for
cancellation, the Letter of Credit shall expire (the "Expiration Date"). The Trustee agrees to surrender
the Letter of Credit to the Bank, and not to make any drawing, after (i) 4:00 p.m. local time in the
city of the office of the Bank that will issue the Letter of Credit on the Expiration Date, (ii) there are
no Bonds outstanding under the Indenture, (iii) the first Business Day after the conversion of the
interest rate on the Bonds to a Fixed Interest Rate, or (iv) a Substitute Letter of Credit or Alternate
Credit Facility, as the case may be, has been delivered to the Trustee.
Alternate Credit Facility
At any time (with notice to the Bank or the Obligor on the Alternate Credit Facility, as the case
may be) the Company may, at its option, provide for the delivery to the Trustee of an AlternaW Credit
Facility to replace the Letter of Credit or the Alternate Credit Facility then in effect, as the case may
be. An Alternate Credit Facility may have an expiration date earlier than the maturity of the Bonds,
but in no event shall such Alternate Credit Facility have an expiration date earlier than one year from
the date of its delivery. The Company must furnish to the Trustee (i) an opinion of nationally recognized
Bond Counsel ("Bond Counsel") stating that the delivery of such Alternate Credit Facility is authorized
under the Agreement and complies with the terms thereof and will not cause the interest on the Bonds
to become includible in the gross income of the Owners thereof for federal income tax purposes and
(ii) written evidence from Moody's, if the Bonds are then rated by Moody's, or 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 Credit Facility and that the delivery of the proposed Alternate Credit Facility will not, by
itself, result in a reduction or withdrawal of its rating or ratings of the Bonds.
The Company may, however, at any time, provide for the delivery on any Business Day to the
Trustee of an Alternate Credit Facility where the above-described evidence from Moody's or S&P's
is not received, provided that the Company shall deliver to the Trustee, the Remarketing Agent, the
Indexing Agent and the Bank (or the Obligor on the Alternate Credit Facility, as the case may be)
a notice which (A) states (x) the effective date of the Alternate Credit Facility to be so provided and
(y) the termination date of the Letter of Credit or Alternate Credit Facility which is to terminate (which
termination date shall not be prior to the effective date of the Alternate Credit Facility to be so
provided), (B) describes the terms of the Alternate Credit Facility, (C) directs the Trustee to give notice
of the call of the Bonds for redemption, in whole, on the Business Day next preceding the termination
date of the Letter of Credit or Alternate Credit Facility which is to terminate (which Business Day
shall be not less than 80 days from the date of receipt by the Trustee of the notice from the Company
specified above), in accordance with the Indenture and (D) directs the Trustee, after taking such actions
as are required to be taken to provide moneys due under the Indenture in respect of the Bonds or
the purchase thereof, to surrender the Letter of Credit or Alternate Credit Facility, as the case may
be, which is to terminate, to the Obligor thereon on the next Business Day after the later of the effective
date of the Alternate Credit Facility to be provided and the termination date of the Letter of Credit
or Alternate Credit Facility which is to terminate and to thereupon deliver any and all instruments
which may be reasonably requested by such Obligor. The Company shall furnish to the Trustee an
opinion of Bond Counsel satisfying the requirement of the next preceding paragraph in connection
with such delivery.
After the Interest Payment Date on which Bonds are to be redeemed as described in clause (i)
in the first paragraph under "THE BONDS—Redemption Upon Expiration or Termination of Letter
15
of Credit or Alternate Credit Facility," the Company may, but is not obligated to, provide for delivery
of an Alternate Credit Facility for payment of the principal of and interest on the Bonds. The Company
shall furnish to the Trustee an opinion of Bond Counsel satisfying the requirement of the second
preceding paragraph in connection with such delivery.
Substitute Letter of Credit
The Company may, at its option, at any time provide for the delivery to the Trustee of a Substitute
Letter of Credit. No Substitute Letter of Credit may be delivered which:
(I) so long as the interest rate borne by the Bonds is a OP Rate, reduces the Interest
Coverage Period to a period shorter than 294 days (during such time as CP Periods can be from
one to not more than 270 days) or 389 or 390 days, as applicable to a particular year (during such
time as CP Periods can be from one to 365 or 366 days, as applicable to a particular year);
(ii)so long as the interest rate borne by the Bonds is a Daily Interest Rate, a Weekly Interest
Rate or a Monthly Interest Rate, reduces the Interest Coverage Period to a period shorter than
65 days;
(iii)so long as the interest rate borne by the Bonds is a Tender Interest Rate or a Fixed
Interest Rate, reduces the Interest Coverage Period to a period shorter than 208 days;
(iv)decreases the Interest Coverage Rate below 12%; or
(v)increases the Interest Coverage Rate above the Maximum Rate.
The Company may, at its option, at any time direct in writing the Trustee and the Remarketing
Agent to allow the selection of CP Periods of from one to no more than 365 or 366 days, as applicable
to a particular year, or from one to no more than 270 days, but only if (for such time as OP Periods
can be from one to 365 or 366 days, as applicable to a particular year) the Company provides for the
delivery to the Trustee of a Substitute Letter of Credit which increases the Interest Coverage Period
to 389 or 390 days, as applicable to a particular year.
Termination of Letter of Credit or Alternate Credit Facility
At any time, the Company may, at its option, provide for the termination on any Business Day
of the Letter of Credit or any Alternate Credit Facility then in effect. The Company must furnish to
the Trustee (i) an opinion of Bond Counsel stating that the termination of the Letter of Credit or
Alternate Credit Facility is authorized under the Agreement and complies with the terms thereof and
will not cause the interest on the Bonds to become includible in the gross income of the Owners thereof
for purposes of federal income taxation and (ii) written evidence from Moody's, if the Bonds are then
rated by Moody's, or 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 termination of the Letter of Credit or Alternate Credit
Facility and that such termination will not, by itself, result in a reduction or withdrawal of its rating
or ratings of the Bonds.
The Company may, however, at anytime, at its option, provide for the termination on any Business
Day of the Letter of Credit or any Alternate Credit Facility then in effect when the above-described
evidence from Moody's or S&P is not received, provided that the Company shall deliver to the Trustee,
the Remarketing Agent, the Indexing Agent and the Bank (or the Obligor on the Alternate Credit
Facility, as the case may be) a notice which (A) states the termination date of the Letter of Credit
or Alternate Credit Facility which is to terminate, (B) directs the Trustee to give notice of the call
of the Bonds for redemption, in whole, no later than the fifth day next preceding the Business Day
next preceding the termination date of the Letter of Credit or Alternate Credit Facility which is to
terminate (which Business Day shall be not less than 30 days from the date of receipt by the Trustee
of the notice from the Company specified above), in accordance with the Indenture and (C) directs
the Trustee, after taking such actions as are required to be taken to provide moneys due under the
Indenture in respect of the Bonds or the purchase thereof, to surrender the Letter of Credit or
Alternate Credit Facility, as the case may be, which is to terminate to the Obligor thereon on the next
Business Day after the termination date of the Letter of Credit or Alternate Credit Facility to be
16
terminated and to thereupon deliver any and all instruments which may be reasonably requested by
such Obligor.
CONVERSION OF RATE
The Bonds of each issue will be independent of the others and a conversion to an Alternative
Rate with respect to one issue will not necessarily result in a conversion with respect to the other
issues; however, a conversion may occur with respect to more than one issue at the same time. The
Bonds of each issue contain substantially the same terms and provisions, and the following is a
summary of certain provisions common to the five issues. All references in this description are to the
documents, the Bonds or the Letter of Credit relating to each issue of Bonds.
Conversion to Fixed Interest Rate, Tender Interest Rate or Floating Interest Rates. The
interest rate borne by the Bonds (the type of interest rate in effect immediately prior to a conversion
being herein called the "Existing Rate") shall be converted to a Fixed Interest Rate, a Tender Interest
Rate, a Tender Interest Rate with a Tender Period of different length than the then current Tender
Period or any of the Floating Interest Rates upon receipt by the Trustee of a written direction from
the Company specifying the specific method of interest accrual on the Bonds and the effective date
(which, if a Letter of Credit or an Alternate Credit Facility is outstanding, shall be a date at least
11 days prior to the Interest Payment Date next preceding the scheduled expiration date of the Letter
of Credit or Alternate Credit Facility, as the case may be) of the conversion to such method of accrual,
specifying changes, if any, to the Bond redemption prices and No-Call Periods and, if applicable,
specifying the length of the Tender Period (which must be a period of six months or an integral multiple
thereof, provided that the first Tender Period may be less than such period but must end on the day
next preceding a January 1 or July 1). The Conversion Date must be (a) if the Existing Rate is a Floating
Interest Rate other than a CP Rate, a Business Day not less than 30 days from the date of receipt
by the Trustee of the written direction from the Company specified above or (b) if the Existing Rate
is a CP Rate, a Business Day not less than 30 days from the date of receipt by the Trustee of the
written direction from the Company specified above or (c) if the Existing Rate is a Tender Interest
Rate, a January 1 or July 1 not less than 20 days after the receipt by the Trustee of the written notice
specified above and not prior to the end of the No-Call Period for such Tender Period or (d) if the
Bonds then bear a Fixed Interest Rate, a January 1 or July 1 not less than 20 days after the receipt
by the Trustee of the written notice specified above and not prior to the end of the No-Call Period
for such Fixed Rate Period. The written direction shall be accompanied by a written opinion, addressed
to the Trustee, the Issuer, the Company, the Bank (or the Obligor on an Alternate Credit Facility,
as the case may be) and the Remarketing Agent, of Bond Counsel selected by the Company and
acceptable to the Trustee and acceptable to the Remarketing Agent stating that such conversion (i)
is authorized or permitted by the Indenture, (ii) will not cause interest on the Bonds to become
includible in the gross income of the Owners thereof for purposes of federal income taxation and (iii)
will not violate the provisions of the Act or other applicable state law. The conversion of the interest
rate borne by the Bonds shall not become effective unless on the Conversion Date the Trustee shall
have received an opinion of such Bond Counsel dated the Conversion Date reaffirming the conclusions
of the opinion accompanying the written direction of the Company initiating the conversion.
Inability To Convert. If for any reason a change in method of calculation of interest on the
Bonds cannot proceed, the Bonds shall continue to bear interest calculated in the method applicable
prior to the proposed change.
Notice to Owners of Conversion. The Trustee shall give notice by first-class mail to the Owners
of Bonds not less than 10 days and not more than 15 days prior to the Conversion Date. Such notice
shall state (i) that the method of determining the interest rate on the Bonds will be converted to an
alternate method of determining the rate, (ii) the effective date of the alternate method of determining
the rate, (iii) the procedures and dates involved in determining the rate and the procedure for notifying
Owners of the interest rate, (iv) when interest on the Bonds will be payable after the effective date,
(v) if the Trustee has been so notified by the Company, whether a Letter of Credit or an Alternate
Credit Facility, as the case may be, will be in effect after such effective date and, if so, the issuer,
the expiration terms and the interest coverage of the Letter of Credit or Alternate Credit Facility,
17
as the case may be, (vi) whether subsequent to such effective date the Owners of Bonds will no longer
have the right to deliver Bonds to the Remarketing Agent or the Trustee for purchase, (vii) that the
rating on the Bonds by Moody's, if the Bonds are then rated by Moody's, or S&P, if the Bonds are
then rated by S&P, may be reduced or withdrawn, and (viii) that all outstanding Bonds not repurchased
on or prior to the effective date will be redeemed on such effective date except Bonds with respect
to which the Owner has directed the Issuer not to redeem the same in accordance with the Indenture.
THE AGREEMENTS
Each Agreement will operate independently of the others, and a default under one Agreement
will not necessarily constitute a default under the other Agreements. The Agreements contain
substantially identical terms, and the following is a summary of certain provisions common to the
five Agreements. All references in this summary are to the documents, the Bonds or the Letters of
Credit (or Alternate Credit Facilities) relating to each Agreement
Loan Payments
As Loan Payments, 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;
provided, however, that the obligation of the Company to make any such Loan Payment will be deemed
to be satisfied and discharged to the extent of the corresponding payment made (i) by the Bank to
the Trustee under the Letter of Credit or (ii) by the Obligor on the Alternate Credit Facility to the
Trustee under the Alternate Credit Facility.
From the date of the original issuance of the Bonds to and including the Interest Payment Date
next preceding the date of expiration or earlier termination of the Letter of Credit (or the Alternate
Credit Facility, as the case may be), the Company will provide for the payment of the principal of
the Bonds, upon redemption or acceleration, and interest on the Bonds when due, by the delivery of
the Letter of Credit (or the Alternate Credit Facility, as the case may be) to the Trustee. The Trustee
will be directed to draw moneys under the Letter of Credit (or the Alternate Credit Facility, as the
case may be), in accordance with the provisions of the Indenture and the Letter of Credit (or the
Alternate Credit Facility, as the case may be), to the extent necessary to pay the principal of, premium,
if any, and interest on the Bonds if and when due. The initial Letter of Credit does not provide for
drawings in respect of amounts of such redemption premium.
Payments to Remarketing Agent and Trustee
The Company will pay to the Remarketing Agent and the Trustee amounts equal to the amounts
to be paid by the Remarketing Agent and the Trustee pursuant to the Indenture for the purchase
of outstanding Bonds, such amounts to be paid by the Company to the Remarketing Agent and the
Trustee, as the case may be, on the dates such payments are to be made; provided, however, that
the obligation of the Company to make any such payment under the Agreement shall be reduced by
the amount of any moneys available for such payments, including proceeds from the remarketing
of the Bonds or moneys drawn under the Letter of Credit (or the Alternate Credit Facility, as the
case may be).
From the date of the original issuance of the Bonds to and including the Interest Payment Date
next preceding the date of the expiration or earlier termination of the Letter of Credit (or the Alternate
Credit Facility, as the case may be), the Company will provide for the payment of the amounts to
be paid by the Remarketing Agent or the Trustee for the purchase of Bonds by the delivery of the
Letter of Credit (or the Alternate Credit Facility, as the case may be) to the Trustee. The Trustee
will be directed to draw moneys under the Letter of Credit (or the Alternate Credit Facility, as the
case may be), in accordance with the provisions of the Indenture and the Letter of Credit (or the
Alternate Credit Facility, as the case may be), to the extent necessary for the purchase of Bonds.
Obligation Absolute
The Company's obligation to make Loan Payments and payments to the Remarketing Agent and
the Trustee for the purchase of Bonds is absolute, irrevocable and unconditional and will not be subject
18
to any defense other than payment or to any right of setoff, counterclaim or recoupment arising out
of any breach by the Issuer, the Bank (or Obligor on an Alternate Credit Facility), the Trustee or
the Remarketing Agent of any obligation to the Company.
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, Moody's, S&P and
the Indexing Agent 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 will not take, or permit to be taken on its behalf, any action which
would cause the interest on the Bonds to become includible in the gross income of Owners of the Bonds
for purposes of federal income taxation and will take, or require to be taken, such action as may, from
time to time, be required under applicable law or regulation to continue to cause the interest on the
Bonds not to be includible in the gross income of the Owners thereof for purposes of federal income
taxation. See "TAX ExEMFrI0N."
Assignment; Merger
With the consent of the Bank (or the Obligor on the Alternate Credit Facility, as the case may
be), the Company's interest in the 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) cause the interest
payable on the Bonds (other than Bonds held by a "substantial user" or "related person" within the
meaning of Section 103(b)(13) of the 1954 Code) to become includible in the gross income of the Owners
thereof for purposes of federal income taxation or (b) relieve (other than as described in the next
succeeding paragraph) the Company from primary liability for its obligations to make the Loan
Payments or to make payments to the Remarketing Agent or the Trustee with respect to the purchase
of the Bonds or for any other of its obligations under the Agreement; and subject further to the
condition that the Company shall have delivered to the Trustee and the Bank (or the Obligor on the
Alternate Credit Facility, as the case may be) an opinion of counsel to the Company that such
assignment complies with the provisions of this paragraph. The Company shall, within 30 days after
the delivery thereof, furnish to the Issuer, the Bank (or Obligor on the Alternate Credit Facility, as
the case may be) and the Trustee a true and complete copy of the agreements or other documents
effectuating any such assignment.
The Company may enter into the transactions described in the Joint Proxy Statement/Prospectus
of PacifiCorp and Utah Power & Light Company dated October 29, 1987 (the "Prospectus") filed as
a part of a Registration Statement on Form S-4 with the Securities and Exchange Commission,
Registration No. 33-18164, effective October 29, 1987, resulting in a Merger (as defined in the
Prospectus) or Reincorporation (as defined in the Prospectus) and the Merger of the Company into
PC/UP&L Merging Corp., an Oregon corporation (to be renamed "PaeifiCorp"). After the effectiveness
of the Merger or Reincorporation, PC/UP&L Merging Corp. will assume (either by operation of law
or in writing) all of the obligations of the Company under the Agreement and all references to the
Company in the Agreement shall mean PC/UP&L Merging Corp. (renamed "PacifiCorp").
The Company also may (a) consolidate with or merge into another domestic corporation (i.e., a
corporation (i) incorporated and existing under the laws of one of the states of the United States or
of the District of Columbia and qualified to do business in the State of Montana or the State of
Wyoming, as the case may be, as a foreign corporation or (ii) incorporated and existing under the
laws of the State of Montana or the State of Wyoming, as the case may be), 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 as a result of the transaction shall assume (either by operation of law or in writing) all
of the obligations of the Company under the Agreement; or (b) convey all or substantially all of its
19
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 Agreement and the 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 Agreement.
Defaults
Each of the following events will constitute an "Event of Default" under the Agreement
(a)a failure by the Company to make when due any Loan Payment or any payment required
to be made to the Remarketing Agent or the Trustee for the purchase of Bonds, which failure
shall have resulted in an "Event of Default" as described herein in paragraph (a), (b) or (c) under
"THE INDENTURES—Defaults";
(b)a failure by the Company to pay when due any other amount required to be paid under
the Agreement or to observe and perform any other covenant, condition or agreement under the
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 Trustee and the Bank (or the Obligor on the Alternate
Credit Facility, as the case may be) may agree to in writing) after written notice given to the
Company and the Bank (or the Obligor on the Alternate Credit Facility, as the case may be) by
the Trustee or to the Company, the Trustee and the Bank (or the Obligor on the Alternate Credit
Facility, as the case may be) 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 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, 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 Agreement (other than its obligations to make when due Loan Payments
and payments to the Remarketing Agent or the Trustee for the purchase of Bonds and its obligation
to maintain its existence), the Company shall not be deemed in default by reason of not carrying out
such agreement or performing such obligation 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. Any waiver 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 Agreement and a rescission and annulment of the consequences thereof.
See the caption "THE INDENTURES—Defaults."
Upon the occurrence and continuance of any Event of Default under the 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 enforce performance and observance of any obligation, agreement or covenant of the
Company under the Agreement.
Any amounts collected upon an Event of Default under the Agreement will be applied in
accordance with the Indenture.
Amendments
The Agreement may be amended subject to the limitations contained in the Agreement and in
the Indenture. See the caption "THE INDENTURES—Amendment of the Agreement."
20
THE INDENTURES
Each Indenture will operate independently of the others, and a default under one Indenture will
not necessarily constitute a default under the others. The Indentures contain substantially identical
terms, and the following is a summary of certain provisions common to the five Indentures. All
references in this summary are to the documents, the Bonds or the Bond Fund relating to each
Indenture.
Pledge and Security
Pursuant to 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. The Issuer will also pledge and assign to the Trustee all its rights and interests
under the 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 will have a prior
claim on the Bond Fund for the payment of its compensation and expenses and for the repayment
of any advances (plus interest thereon) made by it to effect performance of certain covenants in the
Indenture and the Agreement (except that the Trustee will not have such priority with respect to
amounts deposited in the Bond Fund from amounts drawn under the Letter of Credit or Alternate
Credit Facility).
Application of Proceeds
Proceeds from the sale of the Bonds will be deposited with the trustee for the Prior Bonds and
used for the Refunding.
Application of the Bond Fund
There is created under the Indenture a Bond Fund and therein established a Principal Account
and an Interest Account. Loan Payments, amounts drawn by the Trustee under the Letter of Credit
(or Alternate Credit Facility, as the case may be) for payment of the principal of, and interest on,
the Bonds when due, 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
an arbitrage regulation agreement for each issue of Bonds among the Trustee, the related Issuer
and the Company, 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 when due, or, in some circumstances, for payment
of the purchase price of the Bonds, subject to the prior claim of the Trustee to the extent described
in "THE INDENTURES—Pledge and Security."
Funds for the payment of the principal of, and premium, if any, and interest on, the Bonds shall
be derived from the following sources in the order of priority indicated:
(a)Available Moneys;
(b)moneys drawn under the Letter of Credit or an Alternate Credit Facility, as the case may
be; and
(c)any other moneys paid by the Company pursuant to the Agreement or any other moneys
in the Bond Fund.
Investment of Funds
Moneys in the Bond Fund will, at the direction of the Company, be invested in securities or
obligations specified in the Indenture s provided, however, that during the term of the Letter of Credit
(or an Alternate Credit Facility, Mthe case may be) moneys drawn under the Letter of Credit (or
an Alternate Credit Facility, as the case may be) shall be invested by the Trustee only in Government
Obligations (as defined in the Indenture) with a term not exceeding 30 days, All income or other gain
from such investments will be credited, and any loss will be charged, to the particular fund or account
from which the investments were made.
21
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 (other than
Bonds pledged to the Bank (the 'Pledged 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 (other than Pledged Bonds)
for a period of five days after such interest has become due and payable;
(c)a failure to pay amounts due to Owners of the Bonds who have delivered Bonds to the
Remarketing Agent or the Trustee for purchase for a period of five days after such payment
has become due and payable;
(d)the Trustee's receipt of notice from the Bank not later than the ninth Business Day
following a drawing under the Letter of Credit that the Bank has not been reimbursed for such
drawing;
(e)the Trustee's receipt of notice from the Bank (or the Obligor on the Alternate Credit
Facility, as the case may be) of an "Event of Default" under and as defined in the Reimbursement
Agreement (which may be caused by the failure of the Company to comply with any of its
covenants and obligations thereunder);
(f)a failure by the Issuer to observe and perform any other covenant, condition or agreement
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 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 257o in principal amount of
Bonds then outstanding, unless such period is extended 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; and
(g)an "Event of Default" under the Agreement.
Remedies
(i) Upon the occurrence (without waiver or cure) of an Event of Default described in clause (a),
(b) or (c) of the preceding paragraph or an Event of Default described in clause (g) of the preceding
paragraph resulting from an "Event of Default" under the Agreement as described under clause (a)
or (c) of "THE AGREEMENT—Defaults" herein, the Trustee may (and upon the written request of the
Owners of not less than 257v in principal amount of the Bonds then outstanding the Trustee must),
or (ii) upon the occurrence (without waiver or cure) of an Event of Default described in clause (d)
or (e) of the preceding paragraph, the Trustee must, by written notice to the Issuer, the Company
and the Bank (or the Obligor on the Alternate Credit Facility, as the case may be), declare the Bonds
to be immediately due and payable, whereupon they shall, without further action, become and be
immediately due and payable and, during the period the Letter of Credit (or Alternate Credit Facility,
as the case may be) is in effect, with interest on the Bonds accruing to the Bond Payment Date (as
defined in the Indenture) established by the Trustee pursuant to the Indenture, anything in the
Indenture or in the Bonds to the contrary notwithstanding, and the Trustee shall give notice thereof
to the Issuer, the Company and the Bank (or the Obligor on the Alternate Credit Facility, as the case
may be) and shall give notice by first-class mail thereof to Owners of the Bonds, and the Trustee shall
as promptly as practicable draw moneys under the Letter of Credit or an Alternate Credit Facility,
as the case may be, to the extent available thereunder, in an amount sufficient to pay principal of
and accrued interest on the Bonds to the Bond Payment Date.
The provisions described in the preceding paragraph are subject to the condition that if, so long
as no Letter of Credit or Alternate Credit Facility is outstanding, 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 all 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, at the rate per annum specified in the Bonds) and such amount as shall be
sufficient to cover reasonable compensation and reimbursement of expenses payable 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 or annulment
to the Issuer and the Company and shall give notice thereof to Owners of the Bonds by first-class
mail; but no such waiver, rescission or annulment shall extend to or affect any subsequent Event of
Default or impair any right or remedy consequent thereon.
The provisions of the second preceding paragraph are, further, subject to the condition that, if
an Event of Default described in clause (d) or (e) of "THE INDENTURE—Defaults" shall have occurred
and if the Trustee shall thereafter have received notice from the Bank (or the Obligor on the Alternate
Credit Facility, as the case may be) (x) that the notice which caused such Event of Default to occur
has been withdrawn and (y) that the amounts available to be drawn on the Letter of Credit (or the
Alternate Credit Facility, as the case may be) to pay (i) the principal of the Bonds or the portion of
purchase price equal to principal and (ii) interest on the Bonds and the portion of purchase price equal
to accrued interest have been reinstated to an amount equal to the principal amount of the Bonds
outstanding plus accrued interest thereon for the applicable Interest Coverage Period at the Interest
Coverage Rate, then, in every such case, such Event of Default shall be deemed waived and its
consequences rescinded and annulled, and the Trustee shall promptly give written notice of such
waiver, rescission and annulment to the Issuer, the Bank (or the Obligor on the Alternate Credit
Facility, as the case may be), the Company and, prior to conversion to a Fixed Interest Rate, the
Remarketing Agent, and shall give notice thereof to all Owners of the outstanding Bonds (if such
Owners were notified of the acceleration) by first-class mail; but no such waiver, rescission and
annulment shall extend to or affect any subsequent Event of Default or impair any right or remedy
consequent thereon.
Upon the occurrence and continuance of any Event of Default under the Indenture, the Trustee
may, and upon the written request of the Owners of not less than 25% in principal amount of the Bonds
outstanding and receipt of indemnity to its satisfaction shall, pursue any available remedy to enforce
the rights of the Owners of the Bonds and require the Company, the Issuer or the Bank (or the Obligor
on the Alternate Credit Facility, as the case may be) to carry out its 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. 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) 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 under the Indenture or
exercising any trust or power conferred on the Trustee upon furnishing satisfactory indemnity to
the Trustee and provided that such direction shall not result in any personal liability of the Trustee.
No Owner of any Bond will have any right to institute suit to execute 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 has been offered to
the Trustee and the Trustee has not complied with such request within a reasonable time.
23
Notwithstanding any other provision in the Indenture, the right of the Owner of any Bond to
receive payment of the principal of, premium, if any, and interest on his 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 date, will not be impaired or affected without the consent of such Owner of the Bonds.
Defeasance
All or any portions 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 drawn under the Letter of Credit or an Alternate Credit Facility) in an amount
as shall be sufficient 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 Rate)
on said Bonds or portions thereof on and prior to the redemption date or maturity date thereof,
as the ease may be;
(c)in the event said Bonds or portions thereof do not mature and are not to be redeemed
within the next succeeding 30 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 portions thereof 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 interest on said Bonds or portions thereof; and
(d)the Trustee shall have received written evedence from Moody's, if the Bonds are then
rated by Moody's, and S&P, if the Bonds are then rated by S&P, that such action, if it applies
to less than all of the Bonds then Outstanding, will not result in a reduction or withdrawal of
the rating on the Bonds by Moody's or S&P, as the case may be.
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 and interest on said
Bonds or portions 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 Remarketing Agent or the Trustee for purchase and the related obligations
of the Remarketing Agent and the Trustee with respect thereto, (iii) the mandatory redemption of
the Bonds in connection with the expiration of the term of the Letter of Credit (or the Alternate Credit
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 for redemption 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, 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) Available Moneys or moneys drawn under the Letter of
Credit or an Alternate Credit Facility, as the case may be, sufficient to make such payment and/or
(2) Government Obligations purchased with Available Moneys or moneys drawn under the Letter of
Credit or an Alternate Credit Facility, as the case may be, 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, and (b) all necessary and proper fees, compensation and expenses of 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. The provisions of clause
(2) 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 caption "THE BONDS—Purchase of Bonds" 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 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 (aXii) 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 of Trustee
The Trustee may be removed, and a successor Trustee appointed, (i) by the Issuer, under certain
circumstances, and (ii) with the prior written consent of the Bank (which consent, if unreasonably
withheld, shall not be required), by the Owners of not less than a majority in principal amount of Bonds
at the time outstanding.
Modifications and Amendments
The Indenture may be modified or amended by supplemental indentures without the consent of
or notice to 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 under the Indenture or to surrender any right or power reserved or conferred upon the
Issuer which shall not 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 Trust Indenture Act of 1939, as amended; (e) to modify, alter, amend
or supplement the Indenture in any other respect which, in the judgment of the Trustee, is not adverse
to the Owners of the Bonds; (t) to change the method for determining the Floating Interest Index
or the Fixed Interest Index, to implement a conversion of an interest rate or to evidence or give effect
to or facilitate the delivery and administration under the Indenture of an Alternate Credit Facility
or a Substitute Letter of Credit; (g) to provide for a depositary to accept tendered Bonds in lieu of
the Remarketing Agent; (h) 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
cause interest on the Bonds to become includible in the gross income of the Owners thereof for
purposes of federal income taxation; (i) to secure or maintain a rating for the Bonds in both the highest
25
short-term or commercial paper debt Rating Category (as defined in the Indenture) and in either of
the two highest long-term debt Rating Categories; and (j) to provide demand purchase obligations
to cause the Bonds to be authorized purchases for Investment Companies. Notwithstanding the
foregoing, notice shall be given to the Owners of the Bonds of any supplemental indenture changing
the method of determining the Floating Interest Index or the Fixed Interest Index.
Except for supplemental indentures entered into for the purposes described in the preceding
paragraph, the Indenture will not be modified or amended without the consent of the Owners of not
less than 607o 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 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, premium, if any, or interest on any Bond, a change in the
terms of the purchase thereof by the Remarketing Agent or 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 Agreement ranking prior to or
on a parity with the 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 Agreement. No amendment of the
Indenture shall be effective without the prior written consent of the Company and the Bank (or the
Obligor on the Alternate Credit Facility, as the case may be).
Amendment of the Agreement
Without the consent of or notice to the Owners of the Bonds, the Issuer may amend the
Agreement, and the Trustee may consent thereto, as may be required (a) by the provisions of the
Agreement and the Indenture, (b) for the purpose of curing any formal defect, omission, inconsistency
or ambiguity, (c) in connection with any other change therein which is not materially adverse to the
Owners of the Bonds or (d) to secure or maintain a rating for the Bonds in both the highest short-term
or commercial paper debt Rating Category and in either of the two highest long-term debt Rating
Categories. The Issuer and the Trustee will not consent to any other amendment of the Agreement
without the written approval or consent of the Owners of not less than 607c 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 shall permit, or be construed as permitting, a
change in the obligations of the Company to make Loan Payments or payments to the Trustee or
Remarketing Agent for the purchase of Bonds. No amendment of the Agreement will become effective
without the prior written consent of the Bank (or the Obligor on the Alternate Credit Facility, as the
case may be) and the Company.
UNDERWRITING
E.F. Hutton & Company Inc., as Underwriter, has agreed to purchase the Bonds of each issue
from the Issuer thereof at a purchase price of 100% of the principal amount thereof. The Underwriter
is committed to purchase all of the Bonds of an issue if any are purchased.
The Company has agreed to pay the Underwriter an aggregate fee of $576,450 and indemnify
the Underwriter against certain liabilities, including liabilities under the federal securities laws. The
Underwriter may offer and sell the Bonds to certain dealers (including dealers depositing Bonds into
investment trusts) and others at prices lower than the offering price stated on the cover page hereof.
After the initial public offering, the public offering price may be changed from time to time by the
Underwriter.
On December 2, 1987, Shearson Lehman Brothers Holdings Inc. ("Holdings"), the parent company
of Shearson Lehman Brothers Inc. ("Shearson Lehman") and The E.F. Hutton Group Inc. ("E.F. Hutton
Group"), the parent company of E.F. Hutton & Company Inc. ("E.F. Hutton"), entered into an
agreement, amended as of December 28, 1987 (the "Agreement"), pursuant to which Holdings agreed
to acquire all the outstanding shares of E.F. Hutton Group common stock. Pursuant to a tender offer
for certain of the outstanding shares of E.F. Hutton Group common stock which expired January 12,
1988, 32,144,465 shares were tendered and Holdings has agreed to purchase 29,610,000 shares or 907o
26
of E.F. Hutton Group's common stock outstanding and available for tender. As permitted by the terms
of the Agreement, Holdings intends to assign its right to purchase the shares to Shearson Lehman.
Following the initial merger of a newly-formed, wholly-owned subsidiary of Shearson Lehman into
E.F. Hutton Group, E.F. Hutton Group will merge into Shearson Lehman as soon as practicable. The
proposed acquisition and merger of E. F. Hutton Group with and into Shearson Lehman is expected
to occur within the first three-quarters of 1988. Upon the effectiveness of the merger of E.F. Hutton
Group with and into Shearson Lehman, the surviving corporation will assume all of the obligations
of E.F. Hutton as Underwriter, as Remarketing Agent and as Indexing Agent with respect to the
Bonds of each issue.
TAX EXEMPTION
The Code contains a number of requirements and restrictions which apply to each issue of 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 of the Issuers have covenanted to comply with all
requirements of the Code that must be satisfied in order for the interest on each issue of Bonds to
be excludible from gross income. Failure to comply with certain of such requirements may cause
interest on the related issue or issues of Bonds to become subject to federal income taxation retroactive
to the date of issuance of such Bonds.
Subject to the condition that the Company and the related Issuer comply with the above-
referenced covenants, under present law, in the opinion of Bond Counsel, interest on each issue of
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 owned by a person who
is a substantial user of the related Project or any person considered to be related to such person (within
the meaning of Section 103(b)(13) of the 1954 Code) and the interest on each issue of Bonds will not
be treated as an item of tax preference in computing the alternative minimum tax for individuals and
corporations (since the Prior Bonds were issued prior to August 8, 1986). 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 ("AMT") for corporations. The AMT
is levied for taxable years beginning after December 31, 1986 in addition to the regular corporate tax
in certain cases. The AMT, if any, depends upon the corporation's alternative minimum taxable income
("AMTI"), which is the corporation's taxable income with certain adjustments. One of the adjustment
items used in computing AMTI of a corporation (excluding S corporations, Regulated Investment
Companies, Real Estate Investment Trusts and REMICs) is an amount equal to 50% of the excess
of such corporation's "adjusted net book income" over an amount equal to its AMTI (before such
adjustment item and the alternative tax net operating loss deduction). For taxable years beginning
after 1989, such adjustment item will be 75% of the excess of such corporation's "adjusted current
earnings" over an amount equal to its AMTI (before such adjustment item and the alternative tax
net operating loss deduction). Both "adjusted net book income" and "adjusted current earnings" would
include all tax-exempt interest, including interest on each issue of Bonds.
In rendering its opinion with respect to each issue of Bonds, Bond Counsel will rely upon
certifications of the Company with respect to certain material facts solely within the Company's
knowledge about the Project relating to such issue of Bonds and to the application of the proceeds
of such issue of Bonds and the proceeds of the related issue of Prior 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 Bonds should consult their tax advisors as to applicability of any such collateral
consequences.
In the opinion of Chapman and Cutler, Bond Counsel, under present Montana law, interest on
the Forsyth Bonds is exempt from individual income taxes imposed by the State of Montana.
27
In the opinion of Chapman and Cutler, Bond Counsel, under present Wyoming law, the State of
Wyoming imposes no income taxes which would be applicable to the Converse Bonds, the Gillette
Bonds or the two issues of the Sweetwater 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 MATTERS
The validity of the Bonds will be passed upon by Chapman and Cutler, Bond Counsel, and the
Underwriter's obligation to purchase any issue of the Bonds is subject to the issuance of Bond
Counsel's 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 Underwriter by Kutak
Rock & Campbell, as Counsel to the Underwriter. The validity of the Letter of Credit relating to the
Converse Bonds will be passed upon for The Sumitomo Bank, Limited, by its United States counsel,
Preston, Thorgrimson, Ellis & Holman, and by its Japanese counsel, Nishi, Tanaka & Takahashi. The
validity of the Letter of Credit for the Forsyth Bonds will be passed upon for The Industrial Bank
of Japan, Limited, by its United States counsel, Lillick McHose & Charles, and by its Japanese counsel,
Tokyo Kokusai Law Offices. The validity of the Letter of Credit for the Gillette Bonds will be passed
upon for Deutsche Bank AG by its United States counsel, White & Case, and by its Central Legal
Department. The validity of the Letters of Credit for the Sweetwater Bonds will be passed upon for
National Westminster Bank PLC by its United States counsel, Lillick McHose & Charles, and by its
English counsel, Wilde Sapte.
Chapman and Cutler has represented other parties in matters involving subsidiaries of the
Company where legal fees of Chapman and Cutler have been paid by such subsidiaries.
MISCELLANEOUS
The attached Appendices are an integral part of this Official Statement and must be read together
with all of the balance of this Official Statement.
The distribution of this Official Statement has been duly consented to by each Issuer. Each Issuer,
however, has not reviewed and is not responsible for any information set forth herein except that
information under the heading "THE ISSUERS" insofar as it relates to each such Issuer.
APPENDIX A
PACIFICORP
PacifiCorp is a diversified enterprise which conducts four separate businesses: electric operations;
telecommunications; mining and resource development; and financial services. To give recognition to
its diversification into areas other than those relating to a regulated utility, the Company's name was
changed to PacifiCorp from Pacific Power & Light Company at its annual meeting of stockholders
on June 13, 1984. The Company conducts its electric operations under the name of Pacific Power &
Light Company ("Pacific Power"). Pacific Power furnishes electric service in six western states. A
subsidiary of the Company, Pacific Telecom, Inc., provides telecommunications services in Alaska, six
other western states and Wisconsin and is engaged in other nonregulated activities through its
subsidiaries and equity investees. Another subsidiary, NERCO, Inc., is engaged in surface coal and
precious metals mining, minerals and precious metals exploration, and oil and gas exploration and
development in several regions of the United States. Another subsidiary, PacifiCorp Financial Services
Inc., is primarily engaged in the leasing of equipment, secured lending and general investment activity.
The principal executive offices of the Company are located at 1600 Pacific First Federal Center,
851 Southwest Sixth Avenue, Portland, Oregon 97204; the telephone number is [phone].
PENDING MERGER
The shareholders of PacifiCorp and Utah Power & Light ("UP&L") approved on December 15,
1987 a merger of both companies into PC/ UP&L Merging Corp., an Oregon corporation (to be renamed
"PacifiCorp"). The merger is described in the Joint Proxy Statement/Prospectus of PacifiCorp and
Utah Power & Light Company dated October 29, 1987, filed as a part of a Registration Statement
on Form S-4 with the Securities and Exchange Commission, Registration No. 33-18164, effective
October 29, 1987. PacifiCorp and UP&L are currently seeking the regulatory approvals required to
effect the merger. UP&L is an electric utility with its principal executive offices located in Salt Lake
City, Utah and conducts its electric utility operations in the States of Utah, Idaho and Wyoming.
AVAILABLE 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. Such reports, proxy statements and other information may be inspected
and copied at the offices of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549; Room
1102, Jacob K. Javits Building, 26 Federal Plaza, New York, New York 10007; Suite SOOF, 15757
Wilshire Boulevard, Los Angeles, California 90036; and Room 1204, Everett McKinley Dirksen
Building, 219 South Dearborn Street, Chicago, Illinois 60604. 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, at prescribed rates. Reports, proxy material and other information concerning the Company
may also be inspected at the New York and Pacific Stock Exchanges.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and Exchange Commission
are incorporated in this Appendix by reference:
(a)Annual Report on Form 10-K for the year ended December 31, 1986.
(b)Quarterly Report on Form 10-Q for the quarter ended March 31, 1987.
(c)Quarterly Report on Form 10-Q for the quarter ended June 30, 1987.
(d)Quarterly Report on Form 10-Q for the quarter ended September 30, 1987.
(e)Proxy statement dated June 4, 1987 relating to the Company's annual meeting of
stockholders held on July 7, 1987.
(f)Current Reports on Form 8.K dated May 7, 1987 and June 4, 1987.
(g)Registration Statement on Form S-4, effective October 29, 1987.
All reports filed 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 Appendix A and to be a part hereof
from the date of filing such documents.
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 documents referred to above which have been or may be incorporated herein by reference, other
than exhibits to such documents. Requests for such copies should be directed to Robert F. Lanz, Vice
President and Treasurer, PacifiCorp, 1600 Pacific First Federal Center, 851 Southwest Sixth Avenue,
Portland, Oregon 97204. The telephone number is [phone].
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 Underwriter make no
representation as to the accuracy or completeness of such information.
APPENDIX B
THE SUMITOMO BANK, LIMITED
The Sumitomo Bank, Limited ("Sumitomo") is a Japanese banking corporation organized under
the banking law of Japan. Sumitomo was formally established in 1895, although its earliest beginnings
date back about 400 years to the early 17th century when Masatomo Sumitomo started certain
businesses in the old capital of Kyoto.
The main business of Sumitomo is providing financial services to individuals, corporations and
governments. Such services include accepting deposits, processing short- and medium-term loans,
effecting money transfers and underwriting Japanese government bonds, national and local, as well
as a wide variety of other services in both domestic and international financial markets. With the
growth of the multinational corporation, Sumitomo has expanded its international services well beyond
the traditional areas of foreign trade and exchange.
Sumitomo is the second largest bank in the world as well as in Japan in terms of assets. As of
March 31, 1987, Sumitomo had total assets of approximately U.S. $265 billion, deposits of
approximately U.S. $179 billion, loans and bills discounted outstanding of approximately U.S. $136
billion and total stockholders' equity of approximately U.S. $5 billion on a consolidated basis.
Sumitomo took its first step into international banking by concluding a correspondent agreement
with an overseas bank to handle remittance from Japanese citizens living in Hawaii. Shortly thereafter,
Sumitomo was among the first Japanese commercial banks to establish an international network. In
1916, Sumitomo established its first overseas branch in San Francisco. Since that time, Sumitomo has
expanded its international network to 16 branches located in New York, London, Hong Kong,
Dusseldorf, Madrid, Singapore, Brussels, Chicago, Seattle, Panama, Seoul, Milan, Barcelona, Houston,
Cayman and San Francisco; 23 representative offices located in Toronto, Vienna, Jakarta, Mexico City,
Tehran, Cairo, Bahrain, Sydney, Buenos Aires, Bangkok, Paris, Beijing, Kuala Lumpur, Melbourne,
Caracas, Zurich, Guangzhou, Atlanta, Stockholm, Frankfurt, Birmingham, Shanghai and Dailian; eight
subsidiaries, The Sumitomo Bank of California, Banco Sumitomo Brasileiro S.A., Sumitomo
International Finance A.G., Sumitomo Finance Overseas, S.A., Sumitomo Finance (Asia) Limited,
Sumitomo Perpetual Australia Limited, Gotthard Bank and Sumitomo Finance (Middle East) E.C.; and
seven principal affiliates. This network is supplemented by correspondent banking relationships with
over 1,500 institutions.
Sumitomo will provide without charge to each person to whom this Official Statement is delivered,
upon the request of any such person, a copy of its Annual Report. Written requests should be directed
to: The Sumitomo Bank, Limited, Seattle Branch, Suite 4600, 1001 Fourth Avenue Plaza, Seattle,
Washington 98154, Attention: Loan Department.
IM
APPENDIX C
THE INDUSTRIAL BANK OF JAPAN, LIMITED
The Industrial Bank of Japan, Limited (IBJ) was incorporated as a quasi-governmental financial
institution on March 27, 1902, under Japanese law. After World War II, IBJ's legal status was changed
to that of a private corporation operating under the Long-Term Credit Bank Law, enacted in 1952.
The Long-Term Credit Bank Law provides for the establishment of banks whose specific purpose
is to provide long-term funds for Japanese industry, defined to include loans having maturities of more
than six months. This law further provides that long-term credit banks finance their operations
primarily by the sale of their own debentures. IBJ is also engaged in various securities activities and
provides international banking services, including foreign exchange trading.
IBJ is the oldest and largest of Japan's long-term credit banks and, in terms of deposits and
debentures, is also one of the largest banks in Japan. According to the July 1987 issue of "Institutional
Investor," IBJ was the eighth largest bank in the world in terms of assets. On March 31, 1987, on
a nonconsolidated basis, IBJ had total assets of approximately US$194 billion, total loans and bills
discounted outstanding of approximately US$106 billion, total debentures and deposits of approxi-
mately US$154 billion, and total shareholders' equity of approximately US$3 billion.
In addition to its 24 domestic branches, IBJ has overseas branches in New York, Chicago, London,
Singapore, Paris and Hong Kong; an agency in Los Angeles; representative offices in Atlanta, Houston,
San Francisco, Washington, D.C., Bahrain, Bangkok, Beijing, Dalian, Dusseldorf, Frankfurt/Main,
Guangzhou, Jakarta, Kuala Lumpur, Madrid, Melbourne, Mexico City, Panama, Rio de Janeiro, Sao
Paulo, Shanghai, Sydney and Toronto; and overseas subsidiaries in New York, London, Frank-
furt/Main, Luxembourg, Zurich, Hong Kong, Toronto, Jakarta, Perth and Curacao. IBJ is publicly
owned, and its shares are listed on the Tokyo Stock Exchange and the Osaka Securities Exchange.
IBJ will provide without charge to each person to whom this Official Statement is delivered, upon
the request of any such person, a copy of its latest Annual Report, prepared in accordance with
Japanese law and accounting principles. Written requests should be directed to: The Industrial Bank
of Japan, Limited, Los Angeles Agency, 800 West Sixth Street, Los Angeles, California 90017,
Attention: PacifiCorp Account Manager.
C-i
APPENDIX D
DEUTSCHE BANK AG
Deutsche Bank AG, New York Branch, is a New York State-licensed branch of Deutsche Bank
AG (the "Bank"). The Bank is West Germany's largest banking institution. It is the parent company
of a group consisting of commercial banks, mortgage banks, investment banking companies and
specialized institutions. The Bank is represented in over 500 towns and cities in the Federal Republic
of Germany through a network of more than 1,100 branches and through a subsidiary in each of Berlin
and the Saarland. The foreign network of the group, which is worldwide, consists of 15 branches, 17
representative offices and 12 wholly-owned subsidiaries of the Bank, including Deutsche Bank (Asia)
AG with 16 branches and subsidiaries, and Banca d'America e d'Italia S.p.A., Milan, of which the Bank
holds 98.3% of the voting shares, with 2 subsidiaries and 99 hranches.
As of December 31, 1986, the group had total assets of DM257.2 billion (US$133.8 billion), total
loans of DM179.8 billion (US$93.5 billion), total funds from outside sources of DM233.8 billion (US$121.6
billion) and capital and reserves of DM10.0 billion (US$5.2 billion).
Upon request therefor, the Bank will provide without charge to each person to whom this Official
Statement is delivered a copy of the Annual Report of the Bank, which contains the consolidated
statements of the Bank for the fiscal year ended December 31, 1986. Written requests should be
directed to: Deutsche Bank AG, New York Branch, Post Office Box 890, New York, New York 10101,
Attention: Management.
D-1
APPENDIX E
NATIONAL WESTMINSTER BANK PLC
National Westminster Bank PLC (the "Bank"), together with its subsidiaries (the "Group"), is
engaged in a wide range of banking, financial and related activities in the United Kingdom and
throughout the world.
Based on consolidated total assets and deposits, the Group was the largest banking group in the
United Kingdom at December 31, 1986 and is among the larger international banking groups in the
world. At December 31, 1986 the Group reported consolidated total assets of £83.3 billion, consolidated
total deposits of £69.3 billion and consolidated ordinary shareholders' equity of £4.6 billion. The Group's
audited financial statements for the fiscal year ended December 31, 1986 have been filed on Form 20-F
with the Securities and Exchange Commission.
On July 28, 1987 the Group reported interim pre-tax profits of £251 million after a charge for
debt provisions of £564 million. The charge for bad and doubtful debts mainly reflects sovereign debt
provisions of £496 million. This brings the Group's total sovereign debt cover to £886 million, which
is 29.5% of its £3 billion outstandings to 35 problem countries.
The Group currently employs approximately 96,000 people worldwide. Its United Kingdom
operations are conducted directly through the Bank, which is one of the four major London Clearing
Banks, and through three additional banking subsidiaries and other subsidiary companies. Interna-
tional operations are conducted by the Bank and affiliated companies in the United Kingdom and in
36 other countries. The Group's international business has concentrated on OECD countries and its
exposure to countries with liquidity difficulties is small relative to its total assets.
The Bank announced on August 5, 1987 that it had agreed to a cash purchase of First Jersey
National Corporation, an American banking group in New Jersey, for a purchase price of US$820
million. First Jersey National Corporation is the fourth largest banking group in New Jersey with
114 branches and is a leading institution with state-wide operations. The transaction is expected to
be completed shortly after January 1, 1988 subject to, inter alia, approval by the relevant regulatory
authorities and of the terms of the offer by First Jersey National Corporation shareholders.
On November 2?, 1987 the Bank announced that it had postponed for the time being its proposals
to undertake a public offering in Japan and to list its ordinary shares on the Tokyo Stock Exchange.
This decision has been taken in view of the significant changes which have taken place in the world
equity markets since the middle of October. The position will be kept under review.
In the United Kingdom the Group is supervised by the Bank of England with which periodic
reports are filed, together with other information as required. The Bank's San Francisco Overseas
Branch is licensed by the State of California Banking Department and is subject to periodic
examination by the Department. By virtue of its ownership of National Westminster Bank USA, the
Bank is also subject to federal reporting requirements as a bank holding company.
E-1
APPENDIX F
ALTERNATIVE INTEREST RATES
The following is a description of the interest rate and purchase provisions of the Bonds while
the Bonds bear a Daily Interest Rate, Weekly Interest Rate, a Monthly Interest Rate, a Tender Rate
or a Fixed Interest Rate. The method by which the interest rate on the Bonds is determined can be
changed as described in the Official Statement under "CONVERSION OF RATE."
Interest Provisions
Daily Interest Rate. With respect to each day the Bonds are to bear a Daily Interest Rate, the
Daily Interest Rate shall be determined by the Remarketing Agent to be the interest rate which, in
the judgment of the Remarketing Agent, when borne by the Bonds, would be the minimum interest
rate necessary to enable the Remarketing Agent to sell the Bonds on such date at the principal amount
thereof plus accrued interest, if any; provided, however, that (A) with respect to any day that is not
a Business Day, the Daily Interest Rate shall be the same rate as the Daily Interest Rate established
for the immediately preceding Business Day unless the Remarketing Agent is open for business on
such non-Business Day and determines a rate for such non-Business Day, in which case the Bonds
shall bear interest at the rate so determined, and (B) if for any reason a Daily Interest Rate is not
established by the Remarketing Agent or the rate established by the Remarketing Agent is held to
be invalid or unenforceable by a court of law with respect to any day, the Daily Interest Rate for
such day shall equal the Floating Interest Index determined by the Indexing Agent as of such day.
On the basis of such Daily Interest Rates, the Trustee shall calculate the amount of interest payable
during each Interest Period on the Bonds bearing interest at a Daily Interest Rate.
Weekly Interest Rate. With respect to each week the Bonds are to bear interest at a Weekly
Interest Rate, the Weekly Interest Rate on the Bonds shall be determined by the Remarketing Agent
by 12:00 noon, New York, New York time, on Wednesday of each week to be the interest rate which,
in the judgment of the Remarketing Agent, when borne by the Bonds would be the minimum interest
rate necessary to enable the Remarketing Agent to sell the Bonds on such date at the principal amount
thereof plus accrued interest, if any. While the Bonds bear interest at the Weekly Interest Rate, the
Remarketing Agent shall on the next to the last Business Day of each Interest Period provide in
writing to the Bank (or the Obligor on the Alternate Credit Facility, as the case may be) and the Trustee
the Weekly Interest Rates in effect during such Interest Period. In the determination of the Weekly
Interest Rate, the following special provisions shall apply:
(1)In the event the Remarketing Agent shall fail Or refuse for any week to determine the
Weekly Interest Rate, the Weekly Interest Rate shall be the same as for the next preceding week.
(2)If for any reason (i) a Weekly Interest Rate is not established by the Remarketing Agent
for any two successive weeks or (ii) the rate established by the Remarketing Agent is held to
be invalid or unenforceable by a court of law, the Weekly Interest Rate for such week (or the
second of such successive weeks, in the case of (i) above) shall equal the Floating Interest Index
(as described in the Indenture) determined by the Indexing Agent (initially E.F. Hutton &
Company Inc.) for such week.
Monthly Interest Rate. With respect to each Interest Period the Bonds are to bear interest at
a Monthly Interest Rate, the Monthly Interest Rate shall be determined on the first Business Day
of such Interest Period by the Remarketing Agent to be that rate which would be the minimum interest
rate necessary to enable the Remarketing Agent to sell the Bonds on the first day of such Interest
Period at the principal amount thereof. If for any reason a Monthly Interest Rate is not established
by the Remarketing Agent or the rate established by the Remarketing Agent is held to be invalid
or unenforceable by a court of law with respect to any Interest Period, the Monthly Interest Rate
for such Interest Period shall equal the Floating Interest Index determined by the Indexing Agent
for such Interest Period.
F-i
Tender Interest Rate. With respect to each Tender Period the Bonds are to bear interest at
a Tender Interest Rate, the Tender Interest Rate shall be determined by the Remarketing Agent as
follows. On the Business Day next preceding the first day of a Tender Period, the Remarketing Agent
shall determine the Tender Interest Rate, which shall be the rate which would be the minimum interest
rate necessary to enable the Remarketing Agent to sell all of the Bonds on the first day of such Tender
Period at the principal amount thereof.
If for any reason a Tender Interest Rate is not established by the Remarketing Agent or the
rate established by the Remarketing Agent is held to be invalid or unenforceable by a court of law
with respect to any Tender Period, the Tender Interest Rate for such Tender Period shall equal the
Floating Interest Index determined by the Indexing Agent as of the first day of such Tender Period.
Promptly after the determination of each Tender Interest Rate, the Trustee shall mail a notice
by first-class mail to each Owner of a Bond, at the address shown on the registration books of the
Issuer maintained by the Registrar, advising such Owner of such Tender Interest Rate and of the
Tender Period for which such Tender Interest Rate will be in effect. Failure by the Trustee to give
any such notice by mailing, or any defect therein, shall not affect the Tender Interest Rate to be borne
by the Bonds in any Tender Period.
Fixed Interest Rate. The Fixed Interest Rate shall be determined by the Remarketing Agent
as follows. On the Business Day next preceding the effective date of the Fixed Interest Rate, the
Remarketing Agent shall determine the Fixed Interest Rate, which shall be the rate which would be
the minimum interest rate necessary to enable the Remarketing Agent to sell all of the Bonds on
the effective date of the Fixed Interest Rate at the principal amount thereof.
If for any reason the Fixed Interest Rate is not established by the Remarketing Agent or the
rate established by the Remarketing Agent is held to be invalid or unenforceable by a court of law,
the Fixed Interest Rate shall equal the Fixed Interest Index (as defined in the Indenture) determined
by the Indexing Agent as of the effective date of the Fixed Interest Rate.
Promptly after the determination of the Fixed Interest Rate, the Trustee shall mail a notice by
first-class mail to each Owner of a Bond, at the address shown on the registration books of the Issuer
maintained by the Registrar, advising such Owner of such Fixed Interest Rate. Failure by the Trustee
to give any such notice by mailing, or any defect therein, shall not affect the Fixed Interest Rate to
be borne by the Bonds.
Conclusiveness of Determination. The computation of the Floating Interest Index and the
Fixed Interest Index by the Indexing Agent, and the determination of any interest rate by the
Remarketing Agent or the Indexing Agent, shall be conclusive and binding upon the Issuer, the
Trustee, the Bank (or the Obligor on the Alternate Credit Facility, as the case may be), the Company.
the Registrar, the Remarketing Agent and the Owners of the Bonds.
Purchase Provisions
Purchase on Demand of Owner While Bonds Bear Daily Interest Rate. While the Bonds bear
interest at a Daily Interest Rate, any Bond shall be purchased on the demand of the Owner thereof,
on any Business Day, at a purchase price equal to the principal amount thereof plus accrued interest,
if any, to the date of purchase (provided that if such Business Day occurs prior to the Interest Payment
Date for any Interest Period and after the Record Date in respect thereto, the purchase price will
equal the principal amount thereof plus accrued interest, if any, only from such Record Date to the
date of purchase), upon (A) delivery to the Remarketing Agent (and at the option of an Owner which
is an Investment Company, with a copy to the Trustee) at its Principal Office, by no later than 9:30
a.m., New York, New York time, on such Business Day, of a written notice or a telephonic notice,
promptly confirmed by tested telex, which states the principal amount of such Bond to be purchased
and the date on which the same shall be purchased pursuant to this paragraph, and (B) delivery of
such Bond (with all necessary endorsements) to the Remarketing Agent at its Principal Office, at or
prior to 9:30 a.m., New York, New York time, on the date specified in such notice.
Purchase on Demand of Owner While Bonds Bear Weekly Interest Rate.
(a) Except as provided in the next sentence, while the Bonds bear interest at a Weekly
Interest Rate, any Bond shall be purchased, on the demand of the Owner thereof, on any
F-2
Wednesday at a purchase price equal to the principal amount thereof plus accrued interest, if
any, to the date of purchase, upon: (i) delivery to the Principal Office of the Remarketing Agent
of a telephonic notice (unless the Trustee shall be serving as Remarketing Agent, in which case
written notice delivered to the Principal Office of the Trustee shall be required) by 10:00 a.m.,
New York, New York time, on the Tuesday preceding such Wednesday, which states the
aggregate principal amount thereof; (ii) delivery of such Bond (with all necessary endorsements)
and, in the case of a Bond to be purchased prior to the Interest Payment Date for any Interest
Period and after the Record Date in respect thereto, a due-bill, in form satisfactory to the
Remarketing Agent, at the Principal Office of the Remarketing Agent at or prior to 10:00 a.m.,
New York, New York time, on such Wednesday; provided, however, that such Bond shall be so
purchased only if the Bond so delivered to the Remarketing Agent shall conform in all respects
to the description thereof in the aforesaid notice. In the event that in any week both Monday and
Tuesday are not Business Days, or both Tuesday and Wednesday are not Business Days, there
shall be no purchase pursuant to this paragraph for such week; in all other events, the procedures
described in this paragraph to occur on either Tuesday or Wednesday, should either day not be
a Business Day, shall occur on the next succeeding Business Day. An Owner who gives the notice
set forth in clause (i) above may repurchase the Bonds so tendered with such notice on such
Wednesday if the Remarketing Agent agrees to sell the Bonds so tendered to such Owner. If
such Owner decides to repurchase such Bonds and the Remarketing Agent agrees to sell the
specified Bonds to such Owner prior to delivery of such Bonds as set forth in clause (ii)
hereinabove, the delivery requirement set forth in such clause (ii) shall be waived.
(b) While the Bonds bear interest at a Weekly Interest Rate, any Bond shall be purchased,
on the demand of the Owner thereof, on any Business Day at a purchase price equal to the principal
amount thereof plus accrued interest, if any, to the date of purchase, upon: (1) delivery to the
Principal Office of the Remarketing Agent of a written notice (and at the option of an Owner
which is an Investment Company, with a copy to the Trustee) which (i) states the aggregate
principal amount of such Bond and (ii) states the date on which such Bond shall be purchased
pursuant to this subparagraph (b), which date shall be a Business Day not prior to the seventh
day next succeeding the date of the delivery of such notice to the Remarketing Agent; and (2)
delivery of such Bond (with all necessary endorsements) and, in the case of a Bond to be purchased
prior to the Interest Payment Date for any Interest Period and after the Record Date in respect
thereto, a due-bill, in form satisfactory to the Remarketing Agent, at the Principal Office of the
Remarketing Agent at or prior to 10:00 a.m., New York, New York time, on the date specified
in the aforesaid notice; provided, however, that such Bond shall be so purchased pursuant to this
subparagraph (b) only if the Bond so delivered to the Remarketing Agent shall conform in all
respects to the description thereof in the aforesaid notice.
Purchase on Demand of Owner While Bonds Bear Monthly Interest Rate.
(a) While the Bonds bear interest at a Monthly Interest Rate, any Bond shall be purchased,
on the demand of the Owner thereof, on any Interest Payment Date at a purchase price equal
to the principal amount thereof, upon (1) delivery to the Principal Office of the Remarketing Agent
at or prior to 4:00 p.m., New York, New York time, on the third Business Day prior to such Interest
Payment Date of a telephonic notice (unless the Trustee shall be serving as Remarketing Agent,
in which case written notice delivered to the Principal Office of the Trustee shall be required)
which (i) states the aggregate principal amount of such Bond and (ii) states that such Bond shall
be purchased on such Interest Payment Date pursuant to this subparagraph (a); and (2) the
delivery of such Bond (with all necessary endorsements) at the Principal Office of the Remarketing
Agent at or prior to 10:00 a.m., New York, New York time, on such Interest Payment Date;
provided, however, that such Bond shall be so purchased pursuant to this subparagraph (a) only
if the Bond so delivered to the Remarketing Agent shall conform in all respects to the description
thereof in the aforesaid notice. An Owner who gives the notice set forth in clause (1) hereinabove
may repurchase the Bonds so tendered on such Interest Payment Date if the Remarketing Agent
agrees to sell the Bonds so tendered to such Owner. If such Owner decides to repurchase such
Bonds and the Remarketing Agent agrees to sell the specified Bonds to such Owner prior to
F-3
delivery of such Bonds as set forth in clause (2) hereinabove, the delivery requirement set forth
in such clause (2) shall be waived.
(b) While the Bonds bear interest at a Monthly Interest Rate, any Bond shall be purchased,
on the demand of the Owner thereof, on any Business Day at a purchase price equal to the principal
amount thereof plus accrued interest, if any, to the date of purchase, upon: (1) delivery to the
Principal Office of the Remarketing Agent (and at the option of an Owner which is an Investment
Company, with a copy to the Trustee) of a written notice which (i) states the aggregate principal
amount of such Bond and (ii) states the date on which such Bond shall be purchased pursuant
to this subparagraph (b), which date shall be a Business Day not prior to the seventh day next
succeeding the date of the delivery of such notice to the Remarketing Agent; and (2) delivery
of such Bond (with all necessary endorsements) and, in the case of a Bond to be purchased prior
to the Interest Payment Date for any Interest Period and after the Record Date in respect thereto,
a due-bill, in form satisfactory to the Remarketing Agent, at the Principal Office of the
Remarketing Agent at or prior to 10:00 a.m., New York, New York time, on the date specified
in the aforesaid notice; provided, however, that such Bond shall be so purchased pursuant to this
subparagraph (b) only if the Bond so delivered to the Remarketing Agent shall conform in all
respects to the description thereof in the aforesaid notice.
Purchase While Bonds Bear Tender Interest Rate.
(a) While the Bonds bear interest at a Tender Interest Rate, any Bond shall be purchased
on the day (which is not a Conversion Date) next succeeding the last day of any Tender Period
(a "Purchase Date") at a purchase price equal to the principal amount thereof unless the Owner
of the Bond delivers a completed Bondholder Election Notice (as defined in the Indenture) to the
Principal Office of the Trustee (as defined in the Indenture) or any office designated by the Trustee
between the opening of business on the twenty-first day next preceding the Purchase Date and
the close of business on the seventh day next preceding the Purchase Date (or if such twenty-first
or seventh day is not a Business Day, the next succeeding Business Day). The delivery of a
Bondholder Election Notice by an Owner to retain his Bond is irrevocable and binding on such
Owner and cannot be withdrawn. The Trustee shall give the Remarketing Agent telephonic notice,
promptly confirmed in writing, specifying the principal amount of Bonds for which Bondholder
Election Notices have been received. Not later than the fifteenth day next preceding the Purchase
Date, the Trustee shall give notice by first-class mail to the Owners of the Bonds stating (i) the
last day of the Tender Period, (ii) that the Bonds will be purchased on the Purchase Date unless
the Owner of the Bond delivers a completed Bondholder Election Notice (a copy of which shall
accompany the notice from the Trustee) to the Trustee as provided in the Indenture between the
opening of business on the twenty-first day and the close of business on the seventh day next
preceding the Purchase Date (or if such seventh day is not a Business Day, the next succeeding
Business Day) and (iii) that after the Purchase Date the Bonds will bear interest at a Tender
Interest Rate for a Tender Period of the same length as the then current Tender Period.
If during any Tender Period the Company fails to deliver to the Trustee a notice of conversion
as described under the caption "CONVERSION OF RATE—Conversion to Fixed Interest Rate, Tender
Interest Rate or Floating Interest Rates," from and after the Purchase Date the Bonds shall bear
interest at a Tender Interest Rate for a Tender Period of the same length as that ending on the
day immediately preceding such Purchase Date.
Any Owner of a Bond who does not deliver a completed Bondholder Election Notice as
described above must deliver such Bond (with any necessary endorsements) to the Principal Office
of the Trustee, not later than 10:00 a.m., New York, New York time, on the Purchase Date.
Any Owner who delivers a completed Bondholder Election Notice as described above in order
to retain a portion of a Bond must deliver such Bond (with any necessary endorsements) to the
Principal Office of the Trustee at the same time as the delivery of such Bondholder Election Notice.
If an Owner so elects to retain a portion of a Bond, the Trustee shall, in accordance with the
provisions of the Indenture, deliver to such Owner a principal amount of Bonds in Authorized
Denominations equal to the portion of the Bond so retained.
F-4
(b) Bonds or portions thereof to be purchased as provided in paragraph (a) above which are
not delivered by the Owners thereof to the Trustee as above provided shall nonetheless be deemed
to have been delivered by the Owner thereof for purchase and to have been purchased; provided
that there have been irrevocably deposited with the Trustee moneys in accordance with the
Indenture in an amount sufficient to pay the purchase price of such Bonds. Thereafter, the Trustee
shall authenticate a new Bond as provided in the Indenture. Moneys deposited with the Trustee
for purchase of Bonds pursuant to the Indenture shall be held in trust in a separate escrow account
(without liability for interest thereon) and shall be paid to the Owners of such Bonds upon
presentation thereof. The Trustee shall within five days after the Purchase Date give written
notice to the Company whether Bonds have not been delivered, and upon direction to do so by
the Company, the Trustee shall give notice by mail to each Owner whose Bonds are deemed to
have been purchased pursuant to the Indenture, which notice shall state that interest on such
Bonds ceased to accrue on the Purchase Date and that moneys representing the purchase price
of such Bonds are available against delivery thereof at the Principal Office of the Trustee. The
Trustee shall hold moneys deposited by the Company or drawn by the Trustee under the Letter
of Credit or an Alternate Credit Facility, as the case may be, for the purchase of Bonds as provided
in the Indenture, without liability for interest thereon, for the benefit of the former Owner of
the Bond on such Purchase Date, who shall thereafter be restricted exclusively to such moneys
for any claim of whatever nature on his part under the Indenture or on, or with respect to, such
Bond. Any moneys so deposited with and held by the Trustee not so applied to the payment of
Bonds, if any, within six months after such Purchase Date shall be paid by the Trustee to the
Bank (or the Obligor on the Alternate Credit Facility, as the case may be) to the extent of any
amount payable under the Reimbursement Agreement, and the balance shall be paid by the
Trustee to the Company upon the written direction of the Authorized Company Representative
consented to in writing by the Bank (or the Obligor on the Alternate Credit Facility, as the case
may be), and thereafter the former owners shall be entitled to look only to the Company for
payment, and then only to the extent of the amount so repaid to the Bank (or the Obligor on the
Alternate Credit Facility, as the case may be) and/or the Company, and the Company shall not
be liable for any interest thereon and shall not be regarded as a trustee of such money.
F-5
SUMMARY TABLE
The information contained in this table is summary in nature and is qualified in its entirety by reference to the remainder of the Official Statement
to which this is attached, the Indentures and the Bonds.
CP PROGRAM
SUMMARY OF MODES
(Initial Mode: CP)
Glossary
Bank—Bank or Obligor on the CD or Conversion Date—The effective date of a conversion from one
Alternate Credit Facility, as method of determining the interest rate to another
the case may be CP Date—For each Bond, the first day next succeeding the last day
ED—Business Day of a CP Period
BH—Bond Holder CP Parameters—The parameters stated in the Indenture for estab-
lishing CP Periods
CP Period—For each Bond, the period (1-270 days or, at Company's
option, 1.365 or -366 days, as applicable to a particular year)
which is selected by the BH
lAD—Interest Accrual Date
IPD—Interest Payment Date
LC—The initial Letter of Credit or any Alternate Credit Facility
PD or Purchase Date—For each Bond bearing Tender Rate, the day
on which a BH may demand purchase at par
RA—Remarketing Agent
RD—Record Date
TP or Tender Period—For each Bond bearing a Tender Rate, the
period of time in integral six-month periods ending on the day
preceding the PD
TI—Trustee
Note: All times set forth are New York City time.
Floating Rate and Tender Rate
(Put Periods less than maximum CP Period) Tender Rate Fixed Rate
6-Month Tender One Year or Longer
CP Daily Weekly Monthly Period Tender Period
I. Structure
Authorized Denominations
BH Option to Tender
$100,000 or integral
multiples
On the CP Date with delivery of Bond to
RA, unless BH gives written or telephonic notice to RA by
5 p.m. on B!) next
preceding CP Date of election not to ten-
der. Deemed pur-
chased if such notice not given.
Same
On any B!) with
writtenor telephonic
notice to RA by 9:30 a .
m. and delivery of
Bond to RA by 9:30
a.m.
Same
(i)On any ED with 7 days' written notice to RA (Investment
Company has rig>t
to send copy to TI') and delivery of Bond
to RA by 10 a.m. on purchase date speci-fied in the notice or
(ii)on any Wed. with
telephonic notice to RA (if TI' is serving
as RA, written notice
to IT) thepreceding Tues. by 10 a.m. and
delivery of Bond to
RA by 10 a.m. on Wed.
Same
(i)On any BD with 7
days' written notice
to RA (Investment
Company has right
to send copy to TI')
and delivery of Bond
to RA by 10 a.m. on purchase date speci-fled in the notice or
(ii)on any IPD with 3 liDs' telephonic no-
tice to RA and deliv-ery of Bond to RA by 10 a.m. on the
IPD.
$5,000 or integral
multiples
Bonds deemed ten-
dered on PD unless
BH notifies RA be-tween the 21st day
prior to such date
and the 7th such day prior to such date
that he wishes to
keep his Bond and delivers a Bond-
holder Election No-
tice to such effect.
Same Same
Same Not Applicable
..:
Floating Rate and Tender Rate
(Put Periods less than 270 Days) Tender Rate Fixed Rate
6-Month Tender One Year or Longer CP Daily Weekly Monthly Period Tender Period
I. Structure (cont.)
Frequency of Change Each Bond's rate Daily Weekly (effective Monthly Semiannually Each PD Not Applicable
in Interest Rate (not changes on its re- Wed.-Tues.) including conversion) spective CP Date
Interest Rate The interest rate will be the rate per annum determined by the RA to be the rate necessary to enable the RA to sell such Bond at par plus accrued interest, if Determination applicable, on the date such interest rate is to take effect.
Interest Rate On the CP Date Each BD 12 noon of each Wed. First BD of calendar 21 days prior to PD, Same 21 days prior to CD,
Announced month notice to BR of mini- notice to BR of mini-
mum and maximum mum and maximum interest rates; actual interest rates; actual
interest rate an- interest rate an-
nounced on BD prior nounced on BD prior
to PD to CD
Interest Payment CP Date Fifth day after last First BD of each First BD of each Each January 1 and Same Same
Date day of preceding month month
calendar month
July 1
Interest Payment In all cases, on IPD by check or draft to registered owner as of Record Date; wire transfer at option of owners of $1 million or more.
Interest Accrual Last day of OP Last day of calendar Day nextpreceding Same Da next preceding Same Same
Date Period month first BD of succeed- IPD
ing calendar month
Record Date Third day preceding LAD First day on which Third day preceding Fifteenth day of cal- Same Same
lAD except when CP the interest rate is LAD endar month preced-
Period is less than 4 determined next pre- ing LPD
days, in which case, ceding an IPD
the first day of CP Period
Accrued Interest 365/366 and actual Same Same Same 360-day year of 12 Same Same
Calculation days elapsed 30-day months, ac- tual days elapsed
Optional Redemption In Floating Rate structures upon 30 days' notice, in whole or in part, on anj IPD, or with respect to OP Bonds, on any BD, at par plus accrued interest, if any. In
Tender Rate and Fixed Rate structures, Optional Redemption and No-Call Period set forth on pages 11 and 18 of the Official Statement.
Mandatory While Bonds bear Tender Rate or Fixed Rate, in whole or in part upon the occurrence of determination of taxability.
Redemption
Mandatory Purchase In all cases, upon CD and on IPD or BD preceding expiration or termination of Letter of Credit or Alternate Credit Facility. or Redemption
Right of BH to Opt Notice to TT on or Same Same Same Notice to 'IT on or Same Same
Out of Mandatory before 3rd BD prior before 6th BD prior
Redemption Upon to CD to CD
Conversion
Floating Rate and Tender Rate (Put Periods less than 270 Days) Tender Rate Fixed Rate
6-Month Tender One Year or Longer
C? Daily Weekly Monthly Period Tender Period
11. Adjustment of Structure by Company
Date of Decision to At Company's discre- Same Same Same Same Same Same
Convert tion, with notice to
RA, TI', Issuer and
Bank
Interest Rate to In all cases, Bonds can be converted to a Floating Rate, any Tender Rate or a Fixed Rate.
which Bonds can be converted
Date Conversion Any BD not less Same Same Same IPD IPD after No-Call Same
Becomes Effective than 30 days after Period
Company gives no-
tice of adjustment to RA, '11', Issuer and
Bank
Notice to BH of 10 to 15 days prior Same Same Same Same Same Same
Conversion to CD
Opinion of Counsel Yes Yes Yes Yes Yes Yes Yes
Required to Convert
APPENDIX D
PROPOSED FORM OPINION OF BOND COUNSEL
[LETTERHEAD OF CHAPMAN AND CUTLER LLPI
[DATED THE CLOSING DATE]
The Bank of New York Mellon, PacifiCorp
Trust Company, NA., 825 N.E. Multnomah Street,
as successor Trustee Suite 1900
2 North LaSalle Street, Suite 1020 Portland, Oregon 97232-4116
Chicago, Illinois 60602
City of Forsyth, Rosebud County, JPMorgan Chase Bank, National Association
Montana 383 Madison Avenue
247 North Ninth Street New York, New York 10179
Forsyth, Montana 59327
Re: $45,000,000
City of Forsyth, Rosebud County, Montana
Customized Purchase Pollution Control Revenue Refunding Bonds
(PacifiCorp Project) Series 1988 (the "Bonds")
Ladies and Gentlemen:
This opinion is being furnished in accordance with Section 4.03(b) of that certain Loan
Agreement, dated as of January 1, 1988 (the "Loan Agreement"), between the City of Forsyth,
Rosebud County, Montana (the "Issuer") and PacifiCorp (the "Company"). Prior to the date
hereof, payment of principal and purchase price of and interest on the Bonds was secured by a
credit facility issued by BNP Paribas. On the date hereof, the Company desires to deliver a
Letter of Credit (the "Letter of Credit") to be issued by JPMorgan Chase Bank, National
Association (the "Bank"), for the benefit of the Trustee.
We have examined the law and such documents and matters as we have deemed
necessary to provide this opinion letter. As to questions of fact material to the opinions
expressed herein, we have relied upon the provisions of the Trust Indenture, dated as of
January 1, 1988 (the "Indenture"), between the Issuer and The Bank of New York Mellon Trust
Company, N.A., as successor trustee (the "Trustee") and related documents, and upon
representations, including regarding the consent of the Owners, made to us without undertaking
to verify the same by independent investigation.
The terms used herein denoted by initial capitals and not otherwise defined shall have the
meanings specified in the Indenture.
D-1
Based upon the foregoing and as of the date hereof, we are of the opinion that:
1.The delivery of the Letter of Credit is authorized under the Loan
Agreement and complies with the terms of the Loan Agreement.
2.The delivery of the Letter of Credit, the validity under the Act of the
Bonds and will not cause interest on the Bonds to become includible in the gross income
of the owners thereof for federal income tax purposes.
At the time of the issuance of the Bonds, we rendered our approving opinion relating to,
among other things, the validity of the Bonds and the exclusion from federal income taxation of
interest on the Bonds. We have not been requested, nor have we undertaken, to make an
independent investigation to confirm that the Company and the Issuer have complied with the
provisions of the Indenture, the Loan Agreement, the Tax Certificate (as defined in the
Indenture) and other documents relating to the Bonds, or to review any other events that may
have occurred since such approving opinion was rendered other than with respect to the
Company in connection with other than with respect to the Company in connection with (a) the
adjustment of the interest rate on the Bonds described in our opinion dated February 28, 1996,
(b) the delivery of an Alternate Credit Facility, dated as of December 19, 1996, (c) the delivery
of an Alternate Credit Facility, dated as of December 12, 2001, (d) delivery of the Prior Letter of
Credit, dated September 15, 2004 and (e) the delivery of the Letter of Credit described herein.
Accordingly, we do not express any opinion with respect to the Bonds, except as described
above.
Our opinion represents our legal judgment based upon our review of the law and the facts
that we deem relevant to render such opinion and is not a guarantee of a result. This opinion is
given as of the date hereof and we assume no obligation to review or supplement this opinion to
reflect any facts or circumstances that may hereafter come to our attention or any changes in law
that may hereafter occur.
In rendering this opinion as Bond Counsel, we are passing only upon those matters set
forth in this opinion and are not passing upon the adequacy, accuracy or completeness of any
information furnished to any person in connection with any offer or sale of the Bonds.
Respectfully submitted,
D-2
APPENDIX E
[FORM OF LETTER OF CREDIT]
IRREVOCABLE TRANSFERABLE LETTER OF CREDIT
April 18, 2012
U.S. $45,961,644.00
Letter of Credit No. CPCS-352394
CUSIP No. 346668 BGO
The Bank of New York Mellon Trust Company, N.A.,
as trustee (the "Trustee ") under the Trust Indenture
dated as of January 1, 1988 (the "Indenture"),
between City of Forsyth, Rosebud County, Montana
(the "Issuer") and the Trustee
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention: Corporate Trust Department
Ladies and Gentlemen:
We hereby establish in your favor as Trustee for the benefit of the holders of the Bonds (as
hereinafter defined), our irrevocable transferable Letter of Credit No. CPCS-352394 for the
account of PacifiCorp, an Oregon corporation (the "Borrower"), whereby we hereby irrevocably
authorize you to draw on us from time to time, from and after the date hereof to and including
the earliest to occur of our close of business on: (i) April 18, 2013 (as extended from time to
time, the "Stated Expiration Date"), (ii) the earlier of (A) the date which is fifteen (15) days
following the date of conversion of the interest rate on all of the Bonds to a fixed interest rate
pursuant to Section 4.01 of the Indenture, as such date is specified in a certificate in the form of
Annex A hereto (the "Conversion Date ") or (B) the date on which the Bank honors a drawing
under the Letter of Credit on or after the Conversion Date, (iii) the date which is fifteen (15) days
following receipt from you of a certificate in the form set forth as Annex B hereto, (iv) the date
on which an Acceleration Drawing is honored by us, and (v) the date which is fifteen (15) days
following receipt by you of a written notice from us specifying the occurrence of an Event of
Default under the Reimbursement Agreement dated as of April 18, 2012, between the Borrower
and us (the "Reimbursement Agreement") and directing you to accelerate the Bonds (such
earliest date, the "Termination Date"), a maximum aggregate amount not exceeding forty-five
million nine hundred sixty-one thousand six hundred forty-four United States Dollars (U.S.
$45,961,644 - the "Original Stated Amount") to pay principal of and accrued interest on, or the
purchase price of, the U.S. $45,000,000 Customized Purchase Pollution Control Revenue
Refunding Bonds (PacifiCorp Project) Series 1988 issued by the Issuer (the "Bonds"), in
accordance with the terms hereof (said U.S. $45,961,644 having been calculated to be equal to
U.S. $45,000,000 (forty-five million U.S. Dollars), the original principal amount of the Bonds,
E-1
plus U.S. $961,644 (nine hundred sixty-one thousand six hundred forty-four U.S. Dollars), which
is 65 days' accrued interest on said principal amount of the Bonds at the rate of twelve percent
(12.0%) per annum calculated on a 365-day basis (the "Cap Interest Rate")). This credit is
available to you against presentation of the following documents (the "Payment Documents ")
presented to JPMorgan Chase Bank, N.A. (the "Issuing Bank") as described below:
A certificate (with all blanks appropriately completed) (i) in the form attached as Annex C hereto
to pay accrued interest on the Bonds as provided for under Section 6.04 of the Indenture (an
"Interest Drawing"), (ii) in the form attached as Annex D hereto to pay the principal amount of
and accrued interest on the Bonds in respect of any redemption of the Bonds as provided for in
Section 3.10, 3.11 or 3.12 of the Indenture (a "Redemption Drawing"), provided that in the event
the date of redemption or purchase coincides with an Interest Payment Date (as defined in the
Indenture) the Redemption Drawing shall not include any accrued interest on the Bonds (which
interest is payable pursuant to an Interest Drawing), (iii) in the form attached as Annex B hereto,
to allow Barclays Capital, as Remarketing Agent (together with its permitted successors and
assigns, the "Remarketing Agent"), to pay the purchase price of Bonds tendered for purchase as
provided for in Section 3.01, 3.02, 3.03, 3.04, or 3.05 of the Indenture which have not been
successfully remarketed or for which the purchase price has not been received by the
Remarketing Agent by 10:00 A.M., New York, New York time, on the purchase date (a
"Liquidity Drawing"), provided that in the event the purchase date coincides with an Interest
Payment Date, the Liquidity Drawing shall not include any accrued interest on the Bonds (which
interest is payable pursuant to an Interest Drawing), (iv) in the form attached as Annex F hereto,
to pay the principal of and accrued interest in respect of Bonds the payment of which has been
accelerated pursuant to Section 9.02(a) of the Indenture (an "Acceleration Drawing"), or (v) in
the form attached as Annex G hereto to pay the principal amount of Bonds maturing on January
1, 2018 (a "Stated Maturity Drawing"), each certificate to state therein that it is given by your
duly authorized representative and dated the date such certificate is presented hereunder. No
drawings shall be made under this Letter of Credit for Pledged Bonds (as defined in the
Indenture) or Bonds registered in the name of the Company.
All drawings shall be made by presentation of each Payment Document by facsimile (at
facsimile number [phone] or alternately to [phone]), Attention: Standby Service
Unit, without further need of documentation, including the original of this Letter of Credit, it
being understood that each Payment Document so submitted is to be the sole operative
instrument of drawing.
We agree to honor and pay the amount of any Interest, Redemption, Liquidity, Acceleration or
Stated Maturity Drawing if presented in compliance with all of the terms of this Letter of Credit.
If such drawing, other than a Liquidity Drawing, is presented prior to 3:00 P.M., New York, New
York time, on a Business Day, payment shall be made to the account number or address
designated by you of the amount specified, in immediately available funds, by 10:00 A.M., New
York, New York time, on the following Business Day. If any such drawing, other than a
Liquidity Drawing, is presented at or after 3:00 P.M., New York, New York time, on a Business
Day, payment shall be made to the account number or address designated by you of the amount
specified, in immediately available funds, by 1:30 P.M., New York, New York time, on the
following Business Day. If a Liquidity Drawing is presented prior to 12:00 Noon, New York,
New York time, on a Business Day, payment shall be made to the account number or address
E-2
designated by you of the amount specified, in immediately available funds, by 2:00 P.M., New
York, New York time, on the same Business Day. If a Liquidity Drawing is presented at or after
12:00 Noon, New York, New York time, payment shall be made to the account number and at
such bank designated by you of the amount specified, in immediately available funds, by 10:00
A.M., New York, New York time, on the following Business Day. Payments made hereunder
shall be made by wire transfer to you or by deposit into your account with us in accordance with
the instructions specified by the Trustee in the drawing certificate relating to a particular drawing
hereunder. "Business Day" means any day other than a day on which banking institutions in the
city in which the principal corporate trust office of the Trustee or the principal corporate trust
office of the Tender Agent or the principal office of the Remarketing Agent (as defined in the
Indenture) is located, or the city where the office of the Issuing Bank where drawings are made
hereunder is located, are required or authorized by law to remain closed, or other than a day on
which the New York Stock Exchange is closed.
The Available Amount (as hereinafter defined) will be reduced automatically by the amount of
any drawing hereunder; provided, however, that the amount of any Interest Drawing hereunder
shall be automatically reinstated on the 9 0h (ninth) Business Day after payment by us of such
drawing unless the Issuing Bank gives notice of an Event of Default under the Reimbursement
Agreement. After payment by us of a Liquidity Drawing, the obligation of the Issuing Bank to
honor drawings under this Letter of Credit will be automatically reduced by an amount equal to
the Original Purchase Price of any Bonds (or portions thereof) purchased pursuant to said
drawing. In addition, prior to the Conversion Date, in the event of the remarketing of the Bonds
(or portions thereof) previously purchased with the proceeds of a Liquidity Drawing, our
obligation to honor drawings hereunder shall be automatically reinstated concurrently upon
receipt by the Issuing Bank, or the Trustee on the Issuing Bank's behalf, of an amount equal to
the Original Purchase Price of such Bonds (or portion thereof) plus accrued interest thereon as
required under the Reimbursement Agreement as specified in a certificate in the form of Annex
L hereto (a "Reinstatement Certificate"); the amount of such reinstatement shall be equal to the
Original Purchase Price of such Bonds (or portions thereof). "Original Purchase Price" shall
mean the principal amount of any Bond purchased with the proceeds of a Liquidity Drawing plus
the amount of accrued interest on such Bond paid with the proceeds of a Liquidity Drawing (and
not pursuant to an Interest Drawing) upon such purchase.
Upon receipt by us of a certificate of the Trustee in the form of Annex H hereto, the Letter of
Credit will automatically and permanently reduce the amount available to be drawn hereunder by
the amount specified in such certificate. Such reduction shall be effective as of the next Business
Day following the date of delivery of such certificate.
Upon any permanent reduction of the Available Amount to be drawn under this Letter of Credit,
as provided herein, we will deliver to you an amendment to this Letter of Credit substantially in
the form of Annex I hereto to reflect any such reduction. The "Available Amount" shall mean
the Original Stated Amount (i) less the amount of all prior reductions pursuant to Interest,
Redemption, Liquidity, Acceleration or Stated Maturity Drawings, (ii) less the amount of any
reduction thereof pursuant to a certificate in the form of Annex H hereto, (iii) plus the amount of
all reinstatements as above provided.
E-3
Prior to the Termination Date, we may extend the Stated Expiration Date from time to time at the
request of the Borrower by delivering to you an amendment to this Letter of Credit in the form of
Annex K hereto designating the date to which the Stated Expiration Date is being extended.
Each such extension of the Stated Expiration Date shall become effective on the Business Day
following delivery of such notice to you and thereafter all references in this Letter of Credit to
the Stated Expiration Date shall be deemed to be references to the date designated as such in
such notice. Any date to which the Stated Expiration Date has been extended as herein provided
may be extended in a like manner.
Upon the Termination Date this Letter of Credit shall automatically terminate and be delivered to
the Issuing Bank for cancellation. Failure to deliver said Letter of Credit will have no effect on
the Termination Date, and the Letter of Credit will still be considered terminated.
This Letter of Credit is transferable to any transferee who has succeeded you as Trustee under
the Indenture, and may be successively transferred. Any transfer request must be affected by
presenting to us the attached form of Annex J signed by the transferor and the transferee together
with the original Letter of Credit. Upon our endorsement of such transfer, the transferee instead
of the transferor shall, without necessity of further action, be entitled to all the benefits of and
rights under this Letter of Credit in the transferor's place; provided that, in such case, any
certificates of the Trustee to be provided hereunder shall be signed by one who states therein that
he is a duly authorized officer or agent of the transferee.
Communications with respect to this Letter of Credit shall be addressed to us at JPMorgan Chase
Bank, N.A., 131 South Dearborn, 5 th Floor, Mail Code IL 1-0236, Chicago, 11 60603-5506,
Attention: Standby Letter of Credit Unit, specifically referring to the number of this Letter of
Credit. For telephone assistance, please contact the Standby Client Service Unit at 1-800-634-
1969, select Option 1, or 1-312-385-7910, and have this Letter of Credit number available.
Except as expressly stated herein, this Letter of Credit is governed by, and construed in
accordance with the International Standby Practices, ICC Publication No. 590 (the "1SP98"). As
to matters not governed by the 1SP98, this Letter of Credit shall be governed by and construed in
accordance with the laws of the State of New York, including without limitation the Uniform
Commercial Code as in effect in the State of New York, without regard to principals of conflict
of laws.
All payments made by us hereunder shall be made from our funds and not with the funds of any
other Person.
E-4
This Letter of Credit sets forth in full the terms of our undertaking, and such undertaking shall
not in any way be modified or amended by reference to any other document whatsoever.
Very truly yours,
JPMorgan Chase Bank, N.A.
By:_
Name:
Title:
E-5
ANNEX A
TO
JIPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
NOTICE OF CONVERSION DATE
[Date]
JPMorgan Chase Bank, N.A.
131 South Dearborn
5th Floor, Mail Code IL 1-0236
Chicago, IL 60603-5506
Attn: Standby Letter of Credit Unit
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No. CPCS-
352394 dated April 18, 2012 (the "Letter of Credit"), which has been established by you for the
account of PacifiCorp, an Oregon corporation, in favor of the Trustee.
The undersigned hereby certifies and confirms that the Conversion Date has occurred on [insert
date], and, accordingly, said Letter of Credit shall terminate 15 days after such Conversion Date
in accordance with its terms.
All defined terms used herein which are not otherwise defined herein shall have the same
meaning as in the Letter of Credit.
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
[Title of Authorized
Representative]
E-6
ANNEX B
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
NOTICE OF TERMINATION
[Date]
JPMorgan Chase Bank, N.A.
131 South Dearborn
5th Floor, Mail Code IL 1-0236
Chicago, IL 60603-5506
Attn: Standby Letter of Credit Unit
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No. CPCS-
352394 dated April 18, 2012 (the "Letter of Credit"), which has been established by you for the
account of PacifiCorp, an Oregon corporation in favor of the Trustee.
The undersigned hereby certifies and confirms that [(i) no Bonds (as defined in the Letter of
Credit) remain Outstanding within the meaning of the Indenture, (ii) all drawings required to be
made under the Indenture and available under the Letter of Credit have been made and honored,
or (iii) [a Substitute Letter of Credit] [an Alternate Credit Facility] (as defined in the Indenture)
has been provided to replace the Letter of Credit pursuant to the Indenture and Section 4.03LJ
of the Loan Agreement dated as of January 1, 1988, between the Issuer and the Borrower,]* and,
accordingly, the Letter of Credit shall be terminated in accordance with its terms.
All defined terms used herein which are not otherwise defined shall have the same meaning as in
the Letter of Credit.
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
[Title of Authorized
Representative]
* Insert appropriate subsection.
E-7
ANNEX C
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
INTEREST DRAWING CERTIFICATE
JPMorgan Chase Bank, N.A.
facsimile number [phone]
alternately to [phone])
Attn: Standby Letter of Credit Unit
The undersigned individual, a duly authorized representative of The Bank of New York Mellon
Trust Company, N.A. (the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as
follows with respect to (i) that certain Irrevocable Transferable Letter of Credit No. CPCS-
352394 dated April 18, 2012 (the "Letter of Credit"), issued by JPMorgan Chase Bank, N.A.
(the "Bank") in favor of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of Credit):
The Beneficiary is the Trustee under the Indenture.
2.The Beneficiary is entitled to make this drawing in the amount of U.S.
$ the Letter of Credit pursuant to the Indenture with respect to the
payment of interest due on all Bonds outstanding on the Interest Payment Date (as defined in the
Indenture) occurring on [insert applicable date][, other than Pledged Bonds (as defined in the
Indenture)] or Bonds registered in the name of the Company.
3.The amount of the drawing is equal to the amount required to be drawn by the
Trustee pursuant to Section 6.04 of the Indenture.
4.The amount of the drawing made by this Certificate was computed in compliance
with the terms of the Indenture and, when added to the amount of any other drawing under the
Letter of Credit made simultaneously herewith, does not exceed the Available Amount (as
defined in the Letter of Credit).
Payment by the Bank pursuant to this drawing shall be made to
ABA Number , Account Number
Attention: . Re:
(Signature Page Follows)
ANNEX C
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
(CONTINUED)
IN WITNESS WHEREOF, this Certificate has been executed this day of
.20
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
an
[Title of Authorized
Representative]
E-9
ANNEX D
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
REDEMPTION DRAWING CERTIFICATE
JPMorgan Chase Bank, N.A.
facsimile number [phone]
alternately to [phone])
Attn: Standby Letter of Credit Unit
The undersigned individual, a duly authorized representative of The Bank of New York Mellon
Trust Company, N.A. (the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as
follows with respect to (i) that certain Irrevocable Transferable Letter of Credit No. CPCS-
352394 dated April 18, 2012 (the "Letter of Credit"), issued by JPMorgan Chase Bank, N.A.
(the "Bank") in favor of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture
2. The Beneficiary is entitled to make this drawing in the amount of U.S.
$ - under the Letter of Credit pursuant to Section [3.10][3.111 P.121 * of the
Indenture.
3. (a) The amount of this drawing is equal to (i) the principal amount of Bonds to be
redeemed by the Issuer (as defined in the Letter of Credit) pursuant to Section
[3.10]P.11][3.121 * of the Indenture on [insert applicable date] (the "Redemption Date") (other
than Pledged Bonds (as defined in the Indenture) or Bonds registered in the name of the
Company), plus (ii) interest on such Bonds accrued from the immediately preceding Interest
Payment Date (as defined in the Indenture) to the Redemption Date, provided that in the event
the Redemption Date coincides with an Interest Payment Date this drawing does not include any
accrued interest on such Bonds.
(b) Of the amount stated in paragraph 2 above:
(i)U.S. $_______________ is demanded in respect of the principal amount of the
Bonds referred to in subparagraph (a) above; and
(ii)U.S. $__ is demanded in respect of accrued interest on such Bonds.
4. Payment by the Bank pursuant to this drawing shall be made to
ABA Number , Account
Number , Attention: , Re:
* Insert appropriate subsection.
E-10
ANNEX D
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
5. The amount of the drawing made by this Certificate was computed in compliance
with the terms and conditions of the Indenture and, when added to the amount of any other
drawing under the Letter of Credit made simultaneously herewith, does not exceed the Available
Amount (as defined in the Letter of Credit).
6. Upon payment of the amount drawn hereunder, the Bank is hereby directed to
permanently reduce the Available Amount by U.S. $[insert amount of reduction] and the
Available Amount shall thereupon equal U.S. $[insert new Available Amount]. The Available
Amount has been reduced by an amount equal to the principal of Bonds paid with this drawing
and an amount equal to 65 days' interest thereon at the Cap Interest Rate (as defined in the Letter
of Credit).
7. Of the amount of the reduction stated in paragraph 6 above:
(i)U.S. $____________ is attributable to the principal amount of
Bonds redeemed; and
(ii)U.S. $____________ is attributable to interest on such Bonds (i.e.,
65 days' interest thereon at the Cap Interest Rate).
8. The amount of the reduction in the Available Amount has been computed in
accordance with the provisions of the Letter of Credit.
9. Following the reduction, the Available Amount shall be at least equal to the
aggregate principal amount of the Bonds outstanding (to the extent such Bonds are not Pledged
Bonds (as defined in the Indenture) or Bonds registered in the name of the Company) plus 65
days' interest thereon at the Cap Interest Rate.
* 10. In the case of a redemption pursuant to Section 3.11 of the Indenture, the Trustee,
prior to giving notice of redemption to the owners of the Bonds, received written evidence from
the Bank that the Bank has consented to such redemption.
(Signature Page Follows)
* To be included in certificate only if Section 3.11 is referenced in paragraph numbered 2 or 3
above.
E-11
ANNEXD
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
IN WITNESS WHEREOF, this Certificate has been executed this day of
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
LM
[Title of Authorized
Representative]
E-12
ANNEX E
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
LIQUIDITY DRAWING CERTIFICATE
JPMorgan Chase Bank, N.A.
facsimile number [phone]
alternately to [phone])
Attn: Standby Letter of Credit Unit
The undersigned individual, a duly authorized representative of The Bank of New York Mellon
Trust Company, N.A. (the "Beneficiary ") hereby CERTIFIES as follows with respect to (i) that
certain Irrevocable Transferable Letter of Credit No. CPCS-352394 dated April 18, 2012 (the
"Letter of Credit"), issued by JPMorgan Chase Bank, N.A. (the "Bank") in favor of the
Beneficiary; (ii) those certain Bonds (as defined in the Letter of Credit); and (iii) that certain
Indenture (as defined in the Letter of Credit):
The Beneficiary is the Trustee under the Indenture.
2.The Beneficiary is entitled to make this drawing under the Letter of Credit in the
amount of U.S. $with respect to the payment of the purchase price of Bonds
tendered for purchase in accordance with Section 3.01, 3.02, 3.03, 3.04 or 3.05 of the Indenture
and to be purchased on [insert applicable date] (the "Purchase Date ") which Bonds have not
been remarketed as provided in the Indenture or the purchase price of which has not been
received by the Remarketing Agent (as defined in the Letter of Credit) by 10:00 A.M., New
York, New York time, on said Purchase Date.
3.(a) The amount of the drawing is equal to (i) the principal amount of Bonds to be
purchased pursuant to the Indenture on the Purchase Date (other than Pledged Bonds as defined
in the Indenture or Bonds registered in the name of the Company), plus (ii) interest on such
Bonds accrued from the immediately preceding Interest Payment Date (as defined in the
Indenture) (or if none, the date of issuance of the Bonds) to the Purchase Date, provided that in
the event the Purchase Date coincides with an Interest Payment Date this drawing does not
include any accrued interest on such Bonds.
(b) Of the amount stated in paragraph (2) above:
(i)U.S. $________________ is demanded in respect of the principal portion of the
purchase price of the Bonds referred to in subparagraph (2) above; and
(ii)U.S.$ is demanded in respect of payment of the
interest portion of the purchase price of such Bonds.
E-13
ANNEX E
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
4.The amount of the drawing made by this Certificate was computed in compliance
with the terms and conditions of the Indenture and, when added to the amount of any other
drawing under the Letter of Credit made simultaneously herewith, does not exceed the Available
Amount (as defined in the Letter of Credit).
5.The Beneficiary will register or cause to be registered in the name of the
Borrower, upon payment of the amount drawn hereunder, Bonds in the principal amount of the
Bonds being purchased with the amounts drawn hereunder and will deliver such Bonds to the
Trustee in accordance with the Indenture.
6.Payment by the Bank pursuant to this drawing shall be made to

ABA Number , Account
Number Attention: Re:
IN WITNEss WHEREOF, this Certificate has been executed this day of
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
[Title of Authorized
Representative]
E-14
ANNEX F
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
ACCELERATION DRAWING CERTIFICATE
JPMorgan Chase Bank, N.A.
facsimile number [phone]
alternately to [phone])
Attn: Standby Letter of Credit Unit
The undersigned individual, a duly authorized representative of The Bank of New York Mellon
Trust Company, N.A. (the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as
follows with respect to (i) that certain Irrevocable Transferable Letter of Credit No. CPCS-
352394 dated April 18, 2012 (the "Letter of Credit"), issued by JPMorgan Chase Bank, N.A.
(the "Bank") in favor of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. An Event of Default has occurred under subsection [insert subsection i of
Section 9.01 of the Indenture and the Trustee has declared the principal of and accrued interest
on all Bonds then outstanding immediately due and payable. The Beneficiary is entitled to make
this drawing in the amount of U.S. $____________ under the Letter of Credit pursuant to
Section 9.02 of the Indenture in order to pay the principal of and interest accrued on the Bonds
due to an acceleration thereof in accordance with Section [] of the Indenture.
3. (a) The amount of this drawing is equal to (i) the principal amount of Bonds
outstanding on [insert date of acceleration] (the "Acceleration Date ") other than Pledged Bonds
(as defined in the Indenture) or Bonds registered in the name of the Company, plus (ii) interest
on such Bonds accrued from the immediately preceding Interest Payment Date (as defined in the
Indenture) to the Acceleration Date.
(b) Of the amount stated in paragraph 2 above:
(i)U.S. $____________ is demanded in respect of the principal portion of the Bonds
referred to in subparagraph (a) above; and
(ii)U.S. $___________________ is demanded in respect of accrued interest on such
Bonds.
4. The amount of this drawing made by this Certificate was computed in compliance
with the terms and conditions of the Indenture and, when added to the amount of any drawing
under the Letter of Credit made simultaneously herewith, does not exceed the Available Amount
(as defined in the Letter of Credit).
E-15
ANNEX F
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
5. Payment by the Bank pursuant to this drawing shall be made to
ABA Number , Account Number
Attention: Re:
(Signature Page Follows)
IN WITNESS WHEREOF, this Certificate has been executed this day of
,20
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
[Title of Authorized
Representative]
E-16
ANNEX G
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
STATED MATURITY DRAWING CERTIFICATE
JPMorgan Chase Bank, N.A.
facsimile number [phone]
alternately to [phone])
Attn: Standby Letter of Credit Unit
The undersigned individual, a duly authorized representative of The Bank of New York Mellon
Trust Company, N.A. (the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as
follows with respect to (i) that certain Irrevocable Transferable Letter of Credit No. CPCS-
352394 dated April 18, 2012 (the "Letter of Credit"), issued by JPMorgan Chase Bank, N.A.
(the "Bank") in favor of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of Credit):
1.The Beneficiary is the Trustee under the Indenture.
2.The Beneficiary is entitled to make this drawing in the amount of U.S.
under the Letter of Credit pursuant to Section 6.04 of the Indenture.
3.The amount of this drawing is equal to the principal amount of Bonds outstanding
on F , _________, the maturity date thereof as specified in the Indenture, other than
Pledged Bonds (as defined in the Indenture) or Bonds registered in the name of the Company.
4.The amount of this drawing made by this Certificate was computed in compliance
with the terms and conditions of the Indenture and, when added to the amount of any other
drawing under the Letter of Credit made simultaneously herewith, does not exceed the Available
Amount (as defined in the Letter of Credit).
5.Payment by the Bank pursuant to this drawing shall be made to
ABA Number Account Number

Attention: , Re:.
(Signature Page Follows)
E-17
ANNEX G
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
IN WITNESS WHEREOF, this Certificate has been executed this day of
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
M.
[Title of Authorized
Representative]
E-18
ANNEX H
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
REDUCTION CERTIFICATE
JPMorgan Chase Bank, N.A.
131 South Dearborn
5th Floor, Mail Code IL 1-0236
Chicago, IL 60603-5506
Attn: Standby Letter of Credit Unit
The undersigned individual, a duly authorized representative of The Bank of New York Mellon
Trust Company, N.A. (the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as
follows with respect to (i) that certain Irrevocable Transferable Letter of Credit No. CPCS-
352394 dated April 18, 2012 (the "Letter of Credit"), issued by JPMorgan Chase Bank, N.A.
(the "Bank") in favor of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of Credit):
I. The Beneficiary is the Trustee under the Indenture.
2.Upon receipt by the Bank of this Certificate, the Available Amount (as defined in
the Letter of Credit) shall be reduced by U.S.$ and the Available Amount shall
thereupon equal U.S. $ . U.S. $__________________ of the new Available
Amount is attributable to interest.
3.The amount of the reduction in the Available Amount has been computed in
accordance with the provisions of the Letter of Credit.
4.Following the reduction, the Available Amount shall be at least equal to the
aggregate principal amount of the Bonds outstanding (other than Pledged Bonds (as defined in
the Indenture) or Bonds registered in the name of the Company) plus 65 days' interest thereon at
the Cap Interest Rate (as defined in the Letter of Credit).
IN WITNESS WHEREOF, this Certificate has been executed this day of
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
By
[Title of Authorized
Representative]
E-19
ANNEX I
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
NOTICE OF REDUCTION AMENDMENT
[Date]
CUSIP No. 346668 BGO
The Bank of New York Mellon Trust Company, N.A.,
as trustee (the "Trustee ") under the Trust Indenture
dated as of January 1, 1988 (the "Indenture"),
between City of Forsyth, Rosebud County, Montana
(the "Issuer") and the Trustee
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No. CPCS-
352394 dated April 18, 2012 (the "Letter of Credit"), established by us in your favor as
Beneficiary related to, the U.S. $45,000,000 Customized Purchase Pollution Control Revenue
Refunding Bonds (PacifiCorp Project) Series 1988 issued by the Issuer (the "Bonds"). We
hereby notify you that, in accordance with the terms of the Letter of Credit and the
Reimbursement Agreement (as defined in the Letter of Credit), the Available Amount (as
defined in the Letter of Credit) has been reduced to U.S. $, of which U.S.
$ attributable to principal and U.S. $________________ is attributable to
interest.
This amendment shall be attached to the Letter of Credit and made a part thereof.
JPMorgan Chase Bank, N.A.
By:_
Name:
Title:
E-20
ANNEX J
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
REQUEST FOR TRANSFER
JPMorgan Chase Bank, N.A. Date:
131 South Dearborn
Mail Code IL1-0236
Chicago, IL 60603-5506
Attn: Standby Letter of Credit Unit
Re: JPMorgan Chase Bank, N.A. Irrevocable Transferable Letter of Credit No. CPCS-352394 dated April 18, 2012
We, the undersigned "Transferor", hereby irrevocably transfer all of our rights to draw under the above referenced Letter of
Credit ("Credit") in its entirety to:
NAME OF TRANSFEREE
(Print Name and complete address of the Transferee) "Transferee"
ADDRESS OF TRANSFEREE
CITY, STATE/COUNTRY ZIP
In accordance with 1SP98, Rule 6, regarding transfer of drawing rights, all rights of the undersigned Transferor in such Credit are
transferred to the Transferee, who shall have the sole rights as beneficiary thereof, including sole rights relating to any
amendments whether increases or extensions or other amendments and whether now existing or hereafter made. All amendments
are to be advised directly to the Transferee without necessity of any consent of or notice to the undersigned Transferor.
The original Credit, including amendments to this date, is attached and the undersigned Transferor requests that you endorse an
acknowledgment of this transfer on the reverse thereof. The undersigned Transferor requests that you notify the Transferee of
this Credit in such form and manner as you deem appropriate, and the terms and conditions of the Credit as transferred. The
undersigned Transferor acknowledges that you incur no obligation hereunder and that the transfer shall not be effective until you
have expressly consented to effect the transfer by notice to the Transferee.
If you agree to these instructions, please advise the Transferee of the terms and conditions of this transferred Credit and these
instructions.
Transferor represents and warrants that (a) the Transferee is the Transferor's successor trustee under the Indenture, (b) the
enclosed Credit is original and complete, and (c) there is no outstanding demand or request for payment or transfer under the
Credit affecting the rights to be transferred.
The Effective Date shall be the date hereafter on which Transferring Bank effects the requested transfer by acknowledging this
request and giving notice thereof to Transferee.
WE WAIVE ANY RIGHT TO TRIAL BY JURY THAT WE MAY HAVE IN ANY ACTION OR PROCEEDING RELATING
TO OR ARISING OUT OF THIS TRANSFER.
This Request is made subject to ISP98 and is subject to and shall be governed by the laws of the State of New York, without
regard to principles of conflict of laws.
(Signature Page Follows)
E-21
ANNEX J
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
Sincerely yours,
The Bank of New York Mellon Trust Company, N.A.
(Print Name of Transferor)
(Transferor's Authorized Signature)
(Print Authorized Signers Name and Title)
(Telephone Number/Fax Number)
Acknowledged:
(Print Name of Transferee)
(Transferee's Authorized Signature)
(Print Authorized Signers Name and Title)
(Telephone Number/Fax Number)
Acknowledged as of 1 20:
JPMorgan Chase Bank, N.A.
By:_
Name:
Title:
SIGNATURE GUARANTEED
Signature(s) with title(s) conform(s) with that/those on
file with us for this individual, entity or company and
signer(s) is/are authorized to execute this agreement
(Print Name of Bank)
(Address of Bank)
(City, State, Zip Code)
(Print Name and Title of Authorized Signer)
(Authorized Signature)
SIGNATURE GUARANTEED
Signature(s) with title(s) conform(s) with that/those on
file with us for this individual, entity or company and
signer(s) is/are authorized to execute this agreement.
(Print Name of Bank)
(Address of Bank)
(City, State, Zip Code)
(Print Name and Title of Authorized Signer)
(Authorized Signature)
E-22
ANNEX K
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
NOTICE OF EXTENSION AMENDMENT
[Date]
CUSIP No. 346668 BGO
The Bank of New York Mellon Trust Company, N.A.,
as trustee (the "Trustee ") under the Trust Indenture
dated as of January 1, 1988 (the "Indenture"),
between City of Forsyth, Rosebud County, Montana
(the "Issuer") and the Trustee
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No. CPCS-
352394 dated April 18, 2012 (the "Letter of Credit"), established by us in your favor as
Beneficiary related to the U.S. $_________ Customized Purchase Pollution Control Revenue
Refunding Bonds (PacifiCorp Project) Series 1988 issued by the Issuer (the "Bonds"). We
hereby notify you that, in accordance with the terms of the Letter of Credit and the
Reimbursement Agreement (as defined in the Letter of Credit), the Stated Expiration Date (as
defined in the Letter of Credit) has been extended to , 20.
This amendment shall be attached to the Letter of Credit and made a part thereof.
JPMorgan Chase Bank, N.A.
By:_
Name:
Title:
E-23
ANNEX L
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
REINSTATEMENT CERTIFICATE
JPMORGAN CHASE BANK, N.A.
facsimile number [phone]
alternately to [phone])
Attn: Standby Letter of Credit Unit
The undersigned individual, a duly authorized representative of The Bank of New York Mellon
Trust Company, N.A. (the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as
follows with respect to (i) that certain Irrevocable Transferable Letter of Credit No. CPCS-
352394 dated April 18, 2012 (the "Letter of Credit"), issued by JPMorgan Chase Bank, N.A.
(the "Bank") in favor of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of Credit):
1.The undersigned is the Trustee under the Indenture.
2.The Trustee has previously made a Liquidity Drawing under the Letter of Credit
on in the amount of U.S. $______________ (representing U.S.
$ principal and U.S. $________________ of interest) with respect to the
purchase price of Bonds which are now held as Pledged Bonds under the Indenture.
3.The Trustee has received proceeds from the sale of remarketed Pledged Bonds
originally purchased with the proceeds of the above described Liquidity Drawing and as of the
date hereof holds in the Custody Account established under the Indenture the amount of U.S.
$ U.S. $______________ of principal and U.S.
$________________ of interest) with respect to the sale of such Pledged Bonds.
4.In accordance with the terms of the Letter of Credit, the Trustee deems that the
amount available under the Letter of Credit has been automatically reinstated to the extent of the
lesser of (i) the proceeds of remarketed Pledged Bonds held in the Custody Account as set forth
above, or (ii) the amount of the Liquidity Drawing described above, all in accordance with the
terms of the Letter of Credit and this notice.
E-24
ANNEX L
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-352394
IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate
this day of
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
By
[Title of Authorized
Representative] (Title)
E-25
SUPPLEMENT, DATED APRIL 18,2012
TO THE SUPPLEMENT TO OFFICIAL STATEMENT, DATED APRIL 16,2012
RELATING TO
DELIVERY OF
ALTERNATE CREDIT FACILITY AND REOFFERING
$45,000,000
EMERY COUNTY, UTAH
POLLUTION CONTROL REVENUE REFUNDING BONDS
(PACIFICORP PROJECT), SERIES 1991
This Supplement (the "Supplement") modifies, amends and supplements certain
information contained in the Supplement to Official Statement (the "Original Supplement"),
dated April 16, 2012, relating to the above-captioned bonds (the "Bonds"); This Supplement
incorporates by this reference the Original Supplement and shall be deemed to be a part of the
Original Supplement, except as the Original Supplement is specifically modified, amended or
supplemented hereby. All capitalized terms used but not otherwise defined herein shall have the
meanings given to such terms in the Original Supplement.
The cover page of the Original Supplement incorrectly indicates that the Bonds currently
bear interest at a Daily Rate. The Bonds actually currently bear interest at a Weekly Interest
Rate as described under the heading "THE BONDS - Interest on the Bonds." The cover page is
hereby amended to indicate that the Bonds currently bear interest at a Weekly Interest Rate.
This Supplement is dated April 18, 2012.
REOFFERING-NOT A NEW ISSUE
The opinion of Chapman and Cutler delivered on May 23, 1991 stated that, subject to the condition that the Issuer
and the Company comply with certain covenants, under then existing law (i) 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 any person considered to be related to such person
(within the meaning of Section 103(b)(13) of the Internal Revenue Code of 1954, as amended), and (ii) 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. Such opinion of Bond Counsel was also to the effect that under then existing law, the
interest on the Bonds is exempt from individual income taxes imposed by the Utah Individual Income Tax Act. Such
opinions have not been updated as of the date hereof. In the opinion of Bond Counsel to be delivered in connection with the
delivery of the Letter of Credit, the delivery of the Letter of Credit will not cause the interest on the Bonds to become
includible in the gross income of the owners thereof for federal income tax purposes. See "TAX EXEMPTION" herein for a
more complete discussion.
DELIVERY OF
ALTERNATE CREDIT FACILITY AND REOFFERING
$45,000,000*
EMERY COUNTY, UTAH
POLLUTION CONTROL REVENUE REFUNDING BONDS
(PACIFICORP PROJECT), SERIES 1991
Purchase Date: April 18, 2012 Due: July 1, 2015
The Bonds are limited obligations of the Issuer payable solely from and secured by a pledge of payments to be made
under a Loan Agreement between the Issuer and
PACIFICORP
and from funds drawn under an irrevocable direct pay Letter of Credit (the "Letter of Credit") to be issued by
JPM0RGAN CHASE BANK, NATIONAL ASSOCIATION
Under the Letter of Credit, the Trustee will be entitled to draw through April 18, 2013 (unless earlier terminated or
extended) up to an amount sufficient to pay the principal of and, up to 65 days' accrued interest on the Bonds calculated at a
maximum interest rate of 12% per annum (a) to pay the principal of and interest on the Bonds and (b) to pay the purchase
price of Bonds tendered by the Owners thereof as provided in the Indenture.
The Bonds are currently secured by a Letter of Credit (the "Prior Letter of Credit") issued by BNP Paribas (the
"Prior Bank"). PacifiCorp (the "Company") has delivered notice that prior to or on April 18, 2012, the Letter of Credit will
be delivered to the Trustee to support the Bonds. After that date, the Bonds will not have the benefit of the Prior Letter of
Credit.
The Bonds are issuable as fully registered Bonds without coupons, initially in the denomination of $100,000 and
integral multiples of $5,000 in excess thereof. Interest on the Bonds while the Bonds bear interest at Daily, Weekly or
Monthly Rates will be payable monthly on each Interest Payment Date. As of the date hereof, the Bonds bear interest at a
Daily Rate. The Depository Trust Company, New York, New York ("DTC"), will continue to act as a securities depository
for Bonds. Such Bonds are registered in the name of Cede & Co., as registered owner and nominee of DTC, and, except for
the limited circumstances described herein, beneficial owners of interests in such Bonds will not receive certificates
representing their interests in such Bonds. Payments of principal of, and premium, if any, and interest on Bonds will be made
through DTC and its Participants and disbursements of such payments to purchasers will be the responsibility of such
Participants.
The Bonds are being offered solely on the basis of the Letter of Credit and the financial strength of
JPMorgan Chase Bank, National Association, and are not being offered on the basis of the financial strength of the
Company or any other security.
Certain legal matters related to the delivery of the Letter of Credit will be passed upon by Chapman and Cutler LLP,
Bond Counsel to the Company. Certain legal matters will be passed upon for the Company by Paul J. Leighton, Esq.,
counsel to the Company.
Price: 100%
The Bonds are reoffered, subject to prior sale and certain other conditions.
J.P. Morgan
Remarketing Agent
April 16,2012
* The Bonds were issued in the aggregate principal amount of $45,000,000, all of which remain outstanding. This Supplement relates to the
remarketing, in a secondary market transaction, of $43,000,000 of the Bonds delivered for mandatory purchase by the respective owners thereof for
purchase on April 18, 2012. Owners of the remaining $2,000,000 aggregate principal amount of the Bonds have elected to retain such Bonds pursuant
to the Indenture.
No broker, dealer, salesman or other person has been authorized to give any information
or to make any representations other than those contained in this Supplement to Official
Statement in connection with the reoffering made hereby, and, if given or made, such
information or representations must not be relied upon as having been authorized by the Issuer,
PacifiCorp, JPMorgan Chase Bank, National Association, or the Remarketing Agent. Neither
the delivery of this Supplement to Official Statement nor any sale hereunder shall under any
circumstances create any implication that there has been no change in the affairs of the Issuer,
JPMorgan Chase Bank, National Association, or PacifiCorp since the date hereof. The Issuer
has not and will not assume any responsibility as to the accuracy or completeness of the
information in this Supplement to Official Statement. No representation is made by JPMorgan
Chase Bank, National Association, as to the accuracy, completeness or adequacy of the
information contained in this Supplement to Official Statement, except with respect to
APPENDIX B hereto and the information under the caption "THE LETTER OF CREDrF." The Bonds
are not registered under the Securities Act of 1933, as amended. Neither the Securities and
Exchange Commission nor any other federal, state or other governmental entity has passed upon
the accuracy or adequacy of this Supplement to Official Statement.
In connection with this offering, the Remarketing Agent may overallot or effect
transactions which stabilize or maintain the market price of the securities offered hereby at a
level above that which might otherwise prevail in the open market. Such stabilizing, if
commenced, may be discontinued at any time.
-1-
TABLE OF CONTENTS
PAGE
GENERALINFORMATION ................................................................................................................... 1
THEBONDS ....................................................................................................................................... 3
Intereston the Bonds ..............................................................................................................3
Purchase on Demand of Owner .............................................................................................. 4
Redemptionof Bonds .............................................................................................................4
THE LETTER OF CREDIT AND THE CREDIT AGREEMENT .................................................................... 5
TheLetter of Credit ................................................................................................................5
CreditAgreement .................................................................................................................... 6
REMARKETINGAGENT....................................................................................................................10
BOND TERMS AND RELATED DOCUMENTS......................................................................................12
TAXEXEMPTION ............................................................................................................................. 12
MISCELLANEOUS............................................................................................................................13
APPENDIX A - Pacifi Corp
APPENDIX B - JPMorgan Chase Bank, National Association
APPENDIX C - Official Statement Dated May 22, 1991
APPENDIX D - Proposed Form of Opinion of Bond Counsel
APPENDIX E - Form of Letter of Credit
-11-
$45,000,000
EMERY COUNTY, UTAH
POLLUTION CONTROL REVENUE REFUNDING BONDS
(PACIFICORP PROJECT), SERIES 1991
GENERAL INFORMATION
THIS SUPPLEMENT TO OFFICIAL STATEMENT DOES NOT CONTAIN COMPLETE
DESCRIPTIONS OF DOCUMENTS AND OTHER INFORMATION WHICH IS SET FORTH IN THE
OFFICIAL STATEMENT DATED MAY 22, 1991, A COPY OF WHICH IS ATTACHED HERETO AS
APPENDIX C (THE "ORIGINAL OFFICIAL STATEMENT" AND, TOGETHER WITH THIS SUPPLEMENT
TO OFFICIAL STATEMENT, THE "OFFICIAL STATEMENT") EXCEPT WHERE THERE HAS BEEN A
CHANGE IN THE DOCUMENTS OR MORE RECENT INFORMATION SINCE THE DATE OF THE
ORIGINAL OFFICIAL STATEMENT. THIS SUPPLEMENT TO OFFICIAL STATEMENT SHOULD
THEREFORE BE READ ONLY IN CONJUNCTION WITH THE ORIGINAL OFFICIAL STATEMENT.
This Supplement to Official Statement is provided to furnish certain information with
respect to the reoffering of the $45 ,000,000 outstanding principal amount of the Pollution
Control Revenue Refunding Bonds (PacifiCorp Projects) Series 1991 (the "Bonds") issued by
Emery County, Utah (the "Issuer").
The Bonds were issued pursuant to a Trust Indenture, dated as of May 1, 1991 (the
"Indenture") between the Issuer and The Bank of New York Mellon Trust Company, NA.
(successor in interest to The First National Bank of Chicago), as Trustee (the "Trustee"). The
proceeds from the sale of the Bonds were loaned to PacifiCorp (the "Company") pursuant to the
terms of a Loan Agreement dated as of May 1, 1991 (the "Agreement"), between the Issuer and
the Company. Under the Agreement, the Company is unconditionally obligated to pay amounts
sufficient to provide for payment of the principal of, premium, if any, and interest on the Bonds
(the "Loan Payments") and for payment of the purchase price of the Bonds.
The proceeds of the Bonds, together with certain other moneys of the Company, were
used for the purposes set forth in the Original Official Statement.
The Bonds, together with premium, if any, and interest thereon, are limited and not
general, obligations of the Issuer not constituting or giving rise to a pecuniary liability of
the Issuer nor any charge against its general credit or taxing powers nor an indebtedness of
or a loan of credit thereof, shall be payable solely from the Revenues (as defined in the
Indenture and which includes moneys drawn under the Letter of Credit) and other moneys
pledged therefor under the Indenture, and shall be a valid claim of the respective holders
thereof only against the Bond Fund (as defined in the Indenture), the Revenues and other
moneys held by the Trustee as part of the Trust Estate (as defined in the Indenture). The
Issuer shall not be obligated to pay the purchase price of Bonds from any source.
No recourse shall be had for the payment of the principal of, or premium, if any, or
interest on any of the Bonds or for any claim based thereon or upon any obligation,
covenant or agreement in the Indenture contained, against any past, present or future
officer or employee of the Issuer, or any incorporator, officer, director or member of any
successor corporation, as such, either directly, or through the Issuer or any successor
corporation, under any rule of law or equity, statute or constitution or by the enforcement
of any assessment or penalty or otherwise, and all such liability of any such incorporator,
officer, director or member as such was expressly waived and released as a condition of
and in consideration for the execution of the Indenture and the issuance of any of the
Bonds.
The Company has exercised its right under the Agreement and the Indenture to terminate
the Letter of Credit, dated September 15, 2004, as amended (the "Prior Letter of Credit"), issued
by BNP Paribas (the "Prior Bank"), which has supported payment of the principal, interest and
purchase price of the Bonds since the date such Prior Letter of Credit was issued. Pursuant to the
Indenture, the Company has elected to replace the Prior Letter of Credit with an Irrevocable
Letter of Credit (the "Letter of Credit") issued by JPMorgan Chase Bank, National Association
("JPMorgan"). The Letter of Credit will be delivered to the Trustee on April 18, 2012 (the
"Purchase Date") and, after such date, the Bonds will not have the benefit of the Prior Letter of
Credit.
All references in the Official Statement (unless expressly stated otherwise) to the
Letter of Credit shall be deemed to refer to the Letter of Credit and not to the Prior Letter
of Credit, and all references to the Bank shall be deemed to refer to JPMorgan and not to
the Prior Bank.
During the Daily, Weekly and Monthly Rate periods, the Trustee will be entitled to draw
under the Letter of Credit up to (a) an amount equal to the principal amount of the Bonds to be
used (i) to pay the principal of the Bonds, (ii) to enable the Trustee to pay the portion of the
purchase price equal to the principal amount of the Bonds delivered or deemed delivered to it for
purchase and not remarketed by the Remarketing Agent, and (iii) to enable the Company to
purchase the Bonds in lieu of redemption under certain circumstances, plus (b) an amount equal
to 65 days' accrued interest on the Bonds (calculated at an assumed maximum rate of 12% per
annum) (i) to pay interest on the Bonds or (ii) to enable the Trustee to pay the portion of the
purchase price of the Bonds properly delivered for purchase equal to the accrued interest, if any,
on the purchased Bonds.
The Letter of Credit constitutes an Alternate Credit Facility (defined below) under the
Indenture. At any time, the Company may, at its option, provide for the delivery to the Trustee
of an Alternate Credit Facility to replace the Letter of Credit or provide for the termination of the
Letter of Credit or any other Alternate Credit Facility then in effect, as described in the Original
Official Statement under the caption "THE LETTER OF CREDIT - Alternate Credit Facility."
Brief descriptions of the Issuer, the Bonds, the Letter of Credit, the Agreement and the
Indenture are included in this Supplement to Official Statement, including the Original Official
Statement attached as APPENDIX C hereto. Information regarding the business, properties and
-2-
financial condition of the Company is included in APPENDIX A attached hereto. A brief
description of JPMorgan is included as APPENDIX B hereto. The descriptions herein of the
Agreement, the Indenture and the Letter of Credit are qualified in their entirety by reference to
such documents, and the descriptions herein of the Bonds are qualified in their entirety by
reference to the form 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 may be obtained from the principal corporate trust office of the Trustee in
Chicago, Illinois and at the principal offices of the Remarketing Agent in New York, New York.
TiLE BONDS
Reference is hereby made to the Bonds in their entirety for the detailed provisions
thereof. Certain terms used herein are set forth in the Original Official Statement under the
caption "THE BONDS—Interest on the Bonds" and in "APPENDIX F' thereto.
INTEREST ON THE BONDS
The Bonds currently bear interest at a Weekly Interest Rate (not exceeding 12% while the
Letter of Credit is in effect) unless and until changed as described in the Original Official
Statement under "CONVERSION OF RATE." The Weekly Interest Rate on the Bonds shall be
determined by the Remarketing Agent on each Tuesday (or the next succeeding Business Day, if
such Tuesday is not a Business Day) of each week to be the interest rate which, on the following
day, in the judgment of the Remarketing Agent, when borne by the Bonds would be the
minimum interest rate necessary to enable the Remarketing Agent to sell the Bonds on such date
at 100% of the principal amount thereof plus accrued interest, if any.
Interest accrued on the Bonds during each Interest Period (as defined below) shall be paid
to the Owner as of the Record Date (as defined below) on the next succeeding Interest Payment
Date (as defined below) and, while the Bonds bear interest at a Weekly Interest Rate or other
Floating Interest Rate (as defined in the Official Statement), computed on the basis of a year of
365 or 366 days, as applicable, for the actual number of days elapsed.
"Interest Payment Date" means (a) during such time as the Bonds bear a Weekly Interest
Rate, the day next succeeding the Interest Accrual Date, and (b) any Conversion Date.
"Interest Period" means the period from and including the date interest starts to accrue
on the Bonds pursuant to a particular method of calculating interest to and including the next
succeeding Interest Accrual Date and each succeeding period from the day next succeeding such
Interest Accrual Date to and including (i) the next succeeding Interest Accrual Date or (ii) if
earlier, the day next preceding a Conversion Date.
"Interest Accrual Date" means, with respect to any Interest Period during which interest
on the Bonds accrues at a Weekly Interest Rate, the day next preceding the first Business Day of
the next succeeding calendar month.
-3-
"Record Date" means, when the Bonds bear interest at a Weekly Interest Rate, the
Interest Accrual Date.
PURCHASE ON DEMAND OF OWNER
While the Bonds bear interest at a Weekly Interest Rate, any Bond shall be purchased, on
the demand of the Owner thereof, on any Wednesday at a purchase price equal to the principal
amount thereof plus accrued interest, if any, to the date of purchase, upon: (i) delivery to the
Remarketing Agent at its Principal Office, by no later than 10:00 a.m. New York, New York
time, on the seventh day preceding such Wednesday, of a written notice, which states the
principal amount of such Bonds to be purchased, and (ii) delivery of such Bond (with all
necessary endorsements) and, in the case of a Bond to be purchased prior to the Interest Payment
Date for any Interest Period and alter the Record Date in respect thereto, a due-bill, in form
satisfactory to the Trustee, at the New York delivery office of the Trustee at or prior to 10:00
a.m., New York, New York time, on such Wednesday; provided, however, that such Bond shall
be so purchased only if the Bond so delivered to the Trustee shall conform in all respects to the
description thereof in the aforesaid notice. In the event that Wednesday is not a Business Day,
the procedures described in this paragraph to occur on Wednesday, shall occur on the next
succeeding Business Day. An Owner who gives the notice set forth in clause (i) above may
repurchase the Bonds so tendered with such notice on such Wednesday if the Remarketing Agent
agrees to sell the Bonds so tendered to such Owner. If such Owner decides to repurchase such
Bonds and the Remarketing Agent agrees to sell the specified Bonds to such Owner prior to
delivery of such Bonds as set forth in clause (ii) hereinabove, the delivery requirement set forth
in such clause (ii) shall be waived.
Anything in the Indenture notwithstanding, (i) at any time when neither the Letter of
Credit nor an Alternate Credit Facility is outstanding, there shall be no purchases or sales of
Bonds as described above, and (ii) at any time during which the Letter of Credit or an Alternate
Credit Facility is outstanding, there shall be no sales of Bonds, if (A) there shall have occurred
and not have been cured or waived an Event of Default described in the Original Official
Statement in paragraph (a), (b), (c), (d) or (e) 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 in the Official Statement under
the caption "THE INDENTURE -_ Remedies" and such declaration has not been rescinded pursuant
to the Indenture.
REDEMPTION OF BONDS
Bonds bearing interest at a Weekly Interest Rate are subject to optional redemption on
any Interest Payment Date by the Issuer in whole or in part (and if in part in an Authorized
Denomination), at the direction of the Company (but only with the timely written consent of the
Bank or of the Obligor on the Alternate Credit Facility, as the case may be), at the principal
amount thereof, plus accrued interest, if any, with 30 days' prior notice from the Company to the
Issuer and the Trustee.
The Bonds are also subject to redemption under certain circumstances including (i)
certain events relating to the Project, (ii) a Determination of Taxability, (iii) expiration or
termination of the Letter of Credit or Alternate Credit Facility and (iv) a Conversion Date as
described in the Original Official Statement under the captions "THE BONDS - Extraordinary
Optional Redemption of Bonds," "- Special Mandatory Redemption of Bonds," "-
Redemption Upon Expiration or Termination of Letter of Credit or Alternate Credit Facility,"
and "- Redemption Upon Conversion."
Notice requirements and other procedures relating to redemption of Bonds are as
described in the Original Official Statement under the caption "THE BONDS - Procedure for and
Notice of Redemption."
THE LETTER OF CREDIT AND THE CREDIT AGREEMENT
The following is a brief summary of certain provisions of the Letter of Credit and that
certain $800,000,000 Credit Agreement, dated July 6, 2006, as amended and supplemented,
among the Company, the financial institutions party thereto, the Administrative Agent (defined
below) and The Royal bank of Scotland plc, as syndication agent (together with all related
documents, the "Credit Agreement"). This summary is not a complete recital of the terms of the
Letter of Credit or the Credit Agreement and reference is made to the Letter of Credit or the
Credit Agreement, as applicable, in its entirety.
THE LETTER OF CREDIT
On the date of reoffering of the Bonds, JPMorgan will issue in favor of the Trustee a
Letter of Credit for the Bonds in the form of a direct pay letter of credit. The Letter of Credit
will be issued in the aggregate principal amount of the Bonds plus 65 days' interest at 12% per
annum, on the basis of a 365 day year (the "Original Stated Amount") (as from time to time
reduced and reinstated as provided in the Letter of Credit). The Letter of Credit will permit the
Trustee to draw up to an amount equal to the Original Stated Amount to pay the unpaid principal
thereof and accrued interest on the Bonds, subject to the terms, conditions and limitations stated
therein. The Letter of Credit will be substantially in the form attached hereto as APPENDIX E.
The Letter of Credit will expire on April 18, 2013. At any time there remains no less
than 90 days to the then current Stated Expiration Date (defined below), the Company may
request JPMorgan to extend such Stated Expiration Date for a period of one year. JPMorgan
may, in its sole discretion, extend the Stated Expiration Dated then in effect and will give written
notice of such election to extend to the Company and the Trustee within 30 days of receipt the of
request to extend. Failure by JPMorgan to notify the Company and the Trustee of any decision
within 30 days will be deemed to be a rejection of such request. The date on which the Letter of
Credit expires as described in the preceding sentence and as it may be extended from time to
time, is defined in the Letter of Credit as the "Stated Expiration Date". For purposes of the
Letter of Credit, "Business Day" means any day other than a day on which banking institutions
in the city in which the principal corporate trust office of the Trustee or the principal corporate
trust office of the Tender Agent or the principal office of the Remarketing Agent is located, or
-5-
the city where the office of JPMorgan where drawings are made hereunder is located, are
required or authorized by law to remain closed, or other than a day on which the New York
Stock Exchange is closed.
Each drawing honored by JPMorgan under the Letter of Credit will immediately reduce
the available amount thereunder by the amount of such drawing. Any drawing to pay interest
will be automatically reinstated on the ninth (9th) Business Day following the date such drawing
is honored by the Bank, unless JPMorgan gives notice of an Event of Default under that certain
Reimbursement Agreement, dated April 18, 2012 (the "Reimbursement Agreement"), between
the Company and JPMorgan, pursuant to which the Letter of Credit will be issued. Any drawing
to pay the purchase price of a Bond shall be automatically reinstated upon receipt by JPMorgan,
or the Trustee on behalf of JPMorgan, of an amount equal to the purchase price of such Bonds
(or portion thereof) plus accrued interest on such Bonds as required under the Reimbursement
Agreement. See APPENDIX E.
CREDIT AGREEMENT
General. The Company is party to the Credit Agreement. In addition, the Company has
executed and delivered the Reimbursement Agreement requesting that JPMorgan issue a letter of
credit for the Bonds and governing the issuance thereof. The Letter of Credit is issued pursuant
to the Credit Agreement and the Reimbursement Agreement.
The Credit Agreement defines the relationship between the Company and the financial
institutions party thereto, including JPMorgan; neither the Issuer nor the Trustee has any interest
in the Credit Agreement or in any of the funds or accounts created under it. Under the Credit
Agreement and the Reimbursement Agreement, the Company has agreed to reimburse JPMorgan
for any drawings under a Letter of Credit, to pay certain fees and expenses, to pay interest on any
unreimbursed drawings or other amounts unpaid, and to reimburse JPMorgan for certain other
costs and expenses incurred.
Defined Terms. Capitalized terms used in this section and in the Credit Agreement, as
applicable, that are not otherwise defined in this Reoffering Circular will have the meanings set
forth below.
"Administrative Agent" means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent for the Syndicate Banks and its successors in such capacity.
"Commitment" means (i) with respect to any Syndicate Bank listed on the signature
pages to the Credit Agreement, the amount set forth opposite its name on the commitment
schedule as its Commitment and (ii) with respect to each additional Syndicate Bank or assignee
which becomes a Syndicate Bank pursuant to the Credit Agreement, the amount of the
Commitment thereby assumed by it, in each case as such amount may from time to time be
reduced or increased pursuant to the Credit Agreement.
"Debt" of any Person means at any date, without duplication, (i) all obligations of such
Person for borrower money, (ii) all obligations of such Person evidenced by bonds (other than
surety bonds), debentures, notes or other similar instruments, (iii) all obligations of such Person
to pay the deferred purchase price of property or services, except trade accounts payable arising
in the ordinary course of business, (iv) all Capitalized Lease Obligations (as defined in the Credit
Agreement) of such Person, (v) all non-contingent reimbursement, indemnity or similar
obligations of such Person in respect of amounts paid under a letter of credit, surety bond or
similar instrument, (vi) all Debt of others secured by a Lien on any asset of such Person, whether
or not such Debt is assumed by such Person, and (vii) all Debts of others Guaranteed (as defined
in the Credit Agreement) by such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, or
any successor statute.
"ERISA Group" means all members of a controlled group of corporations and all trades
or business (whether or not incorporated) under common control which, together with Company,
are treated as a single employer under Section 414 of the Internal Revenue Code.
"Issuing Bank" means any Syndicate Bank designated by Company that may agree to
issue letters of credit pursuant to an instrument in form reasonably satisfactory to the
Administrative Agent, each in its capacity as an issuer of a letter of credit under the Credit
Agreement.
"Loans" means Committed Loans or Competitive Bid Loans (as such terms are defined
in the Credit Agreement) or any combination of the foregoing pursuant to the Credit Agreement.
"Material Debt" means Debt of the Company arising under a single or series of related
instruments or other agreements exceeding $35,000,000 in principal amount.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to
any or all of its functions under ERISA.
"Person" means any individual, a corporation, a partnership, an association, a trust or
any other entity or organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Reimbursement Obligations" means all such amounts paid by an Issuing Bank and
remaining unpaid by the Company after the date and time required for payment under the Credit
Agreement.
"Required Banks" means at any time Syndicate Banks having more than 50% of the total
Commitments under the Credit Agreement, or if the Commitments shall have been terminated,
holding more than 50% of the sum of the outstanding Loans and letter of credit liabilities.
"Syndicate Bank" or "Syndicate Banks" means, individually or collectively, each bank
or other financial institution listed on the signature pages to the Credit Agreement, each assignee
which becomes a Syndicate Bank pursuant to the Credit Agreement, and their respective
successors.
-7-
Events of Default and Remedies. Any one or more of the following events constitute an
event of default (an "Event of Default") under the Credit Agreement:
(a)the Company shall fail to pay when due any principal of any Loan or any
Reimbursement Obligation or shall fail to pay, within five days of the due date thereof,
any interest, commitment fees or facility fees payable hereunder or shall fail to cash
collateralize any letter of credit pursuant to the Credit Agreement;
(b)the Company shall fail to pay any other amount claimed by one or more
Syndicate Banks under the Credit Agreement within five days of the due date thereof,
unless (i) such claim is disputed in good faith by the Company, (ii) such unpaid claimed
amount does not exceed $100,000 and (iii) the aggregate of all such unpaid claimed
amounts does not exceed $300,000;
(c)the Company shall fail to observe or perform certain specified financial
covenants contained in the Credit Agreement;
(d)the Company shall fail to observe or perform any covenant or agreement
contained in the Credit Agreement (other than those covered by clause (a), (b) or (c)
above) for 15 days after written notice thereof has been given to the Company by the
Administrative Agent at the request of any Syndicate Bank;
(e)any representation, warranty, certification or statement made by the
Company in the Credit Agreement or in any certificate, financial statement or other
document delivered pursuant to the Credit Agreement shall prove to have been incorrect
in any material respect when made (or deemed made);
(1) the Company shall fail to make any payment in respect of any Material
Debt (other than Loans or any Reimbursement Obligation) or Material Hedging
Obligations (as defined in the Credit Agreement) when due or within any applicable
grace period;
(g)any event or condition shall occur which results in the acceleration of the
maturity of any Material Debt of the Company or enables the holder of such Material
Debt or any Person acting on such holder's behalf to accelerate the maturity thereof;
(h)the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property; or shall consent to any such relief or to the appoint of
or taking possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become due, or shall take any corporate action
to authorize any of the foregoing;
(i)an involuntary case or other proceeding shall be commenced against the
Company seeking liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Company under the federal bankruptcy laws as now or
hereafter in effect;
(j)the Company or any member of the ERISA Group shall fail to pay when
due an amount or amounts aggregating in excess of $25,000,000 which it shall have
become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
intent to terminate certain material plans identified in the Credit Agreement (each a
"Material Plan") shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose liability in excess
of $25,000,000 (other than for premiums under Section 4007 of ERISA) in respect of, or
to cause a trustee to be appointed to administer any Material Plan or a proceeding shall be
instituted by a fiduciary of any multiemployer plan (identified in the Credit Agreement)
against any member of the ERISA Group to enforce Section 515 or 4219(c)(5) of ERISA
in respect of an amount or amounts aggregating in excess of $25,000,000, and such
proceeding shall not have been dismissed within 20 days thereafter; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that
any Material Plan must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA, with
respect to, one or more Multiemployer Plans which would cause one or more members of
the ERISA Group to incur a current payment obligation in excess of $25,000,000;
(k)a judgment or order for the payment of money in excess of $25,000,000
shall be rendered against the Company and such judgment or order shall continue
unsatisfied and unstayed for a period of 30 days;
(1) MidAmerican Energy Holdings Company or any wholly-owned subsidiary
thereof that owns common stock of the Company ("MidAmerican") shall fail to own
(directly or indirectly through one or more Subsidiaries) at least 80% of the outstanding
shares of common stock of the Company; any person or group of persons (within the
meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as amended), except
Berkshire Hathaway Inc. or any wholly-owned subsidiary thereof, shall acquire a
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities
and Exchange Commission under said Act) of 35% or more of the outstanding shares of
common stock of MidAmerican; or, during any period of 14 consecutive calendar months
commencing on or after March 21, 2006, individuals who were directors of the Company
on the first day of such period and any new director whose election by the board of
directors of the Company or nomination for election by the Company's shareholders was
approved by a vote of at least a majority of the directors then still in office who either
were directors at the beginning of the applicable period or whose election or nomination
in
for election was previously so approved, shall cease to constitute a majority of the board
of directors of the Company.
Upon the occurrence of any Event of Default under the Credit Agreement, the
Administrative Agent shall (1) if requested by the Required Banks, by notice to the Company
terminate the Commitments and the obligation of each Syndicate Bank to make Loans
thereunder and the obligation of each Issuing Bank to issue any letter of credit thereunder and
such obligations to make Loans and issue new letters of credit shall thereupon terminate, and (ii)
if requested by the Required Banks, by notice to the Company declare the Loans (together with
accrued interest thereon) and any outstanding Reimbursement Obligations in respect of any
drawing under a letter of credit issued under the Credit Agreement to be, and the same shall
thereupon become, immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company; provided that in the case of
any of the Events of Default specified in clause (h) or (i) above with respect to the Company,
without any notice to the Company or any other act by the Administrative Agent or the Syndicate
Banks, the Commitments shall thereupon terminate and the Loans (together with accrued interest
thereon) and any outstanding Reimbursement Obligations in respect of any drawing under a
letter of credit issued under the Credit Agreement shall become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which are hereby waived
by the Company.
The Company agrees, in addition to the Events of Default provisions above, that upon the
occurrence and during the continuance of any Event of Default, it shall, if requested by the
Administrative Agent upon the instruction of the Required Banks or any Issuing Bank having an
outstanding letter of credit issued under the Credit Agreement, pay to the Administrative Agent
an amount in immediately available funds (which funds shall be held as collateral pursuant to
arrangements satisfactory to the Administrative Agent) equal to the aggregate amount available
for drawing under all letters of credit issued under the Credit Agreement outstanding at such time
(or, in the case of a request by an Issuing Bank, all such letters of credit issued by it); provided
that, upon the occurrence of any Event of Default specified in clause (h) or (i) above with respect
to the Company, and on the scheduled termination date of the Credit Agreement, the Company
shall pay such amount forthwith without any notice or demand or any other act by the
Administrative Agent, any Issuing Bank or any Syndicate Bank.
REMARKETING AGENT
J.P. Morgan Securities LLC (the "Remarketing Agent") will continue as remarketing
agent for the Bonds. Subject to certain conditions, the Remarketing Agent has agreed to
determine the rate of interest on the Bonds and use its best efforts to remarket all tendered
Bonds.
In the ordinary course of its business, the Remarketing Agent has engaged, and may in
the future engage, in investment banking and/or commercial banking transactions with the
Company, its subsidiaries and its other affiliates, for which it has received and will receive
customary compensation.
-10-
The Remarketing Agent is Paid by the Company. The Remarketing Agent's
responsibilities include determining the interest rate from time to time and remarketing Bonds
that are optionally or mandatorily tendered by the owners thereof (subject, in each case, to the
terms of the Indenture and the Remarketing Agreement), all as further described in this
Reoffering Circular. The Remarketing Agent is appointed by the Company and paid by the
Company for its services. As a result, the interests of the Remarketing Agent may differ from
those of existing Holders and potential purchasers of Bonds.
The Remarketing Agent May Purchase Bonds for Its Own Accounts. The Remarketing
Agent acts as remarketing agent for a variety of variable rate demand obligations and, in its sole
discretion, may purchase such obligations for its own accounts. The Remarketing Agent is
permitted, but not obligated, to purchase tendered Bonds for its own accounts and, in its sole
discretion, may acquire such tendered Bonds in order to achieve a successful remarketing of the
Bonds (i.e., because there otherwise are not enough buyers to purchase the Bonds) or for other
reasons. However, the Remarketing Agent is not obligated to purchase Bonds, and may cease
doing so at any time without notice. The Remarketing Agent may also make a market in the
Bonds by purchasing and selling Bonds other than in connection with an optional or mandatory
tender and remarketing. Such purchases and sales may be at or below par. However, the
Remarketing Agent is not required to make a market in the Bonds. The Remarketing Agent may
also sell any Bonds it has purchased to one or more affiliated investment vehicles for collective
ownership or enter into derivative arrangements with affiliates or others in order to reduce its
exposure to the Bonds. The purchase of Bonds by the Remarketing Agent may create the
appearance that there is greater third party demand for the Bonds in the market than is actually
the case. The practices described above also may result in fewer Bonds being tendered in a
remarketing.
Bonds May Be Offered at Different Prices on Any Date Including an Interest Rate
Determination Date. Pursuant to the Indenture and the Remarketing Agreement, the
Remarketing Agent is required to determine the applicable rate of interest that, in its judgment, is
the lowest rate that would permit the sale of the Bonds bearing interest at the applicable interest
rate at par plus accrued interest, if any, on and as of the applicable interest rate determination
date. The interest rate will reflect, among other factors, the level of market demand for the Bonds
(including whether the Remarketing Agent is willing to purchase Bonds for its own accounts).
There may or may not be Bonds tendered and remarketed on an interest rate determination date,
the Remarketing Agent may or may not be able to remarket any Bonds tendered for purchase on
such date at par and the Remarketing Agent may sell Bonds at varying prices to different
investors on such date or any other date. The Remarketing Agent is not obligated to advise
purchasers in a remarketing if it does not have third party buyers for all of the Bonds at the
remarketing price. In the event the Remarketing Agent owns any Bonds for its own account, it
may, in its sole discretion in a secondary market transaction outside the tender process, offer
such Bonds on any date, including the interest rate determination date, at a discount to par to
some investors.
The Ability to Sell the Bonds Other Than Through the Tender Process May Be Limited.
The Remarketing Agent may buy and sell Bonds other than through the tender process.
However, it is not obligated to do so and may cease doing so at any time without notice and may
-11-
require Holders that wish to tender their Bonds to do so through the Trustee with appropriate
notice. Thus, investors who purchase the Bonds, whether in a remarketing or otherwise, should
not assume that they will be able to sell their Bonds other than by tendering the Bonds in
accordance with the tender process.
The Remarketing Agent May Resign, be Removed or Cease Remarketing the Bonds,
Without a Successor Being Named. Under certain circumstances the Remarketing Agent may be
removed or have the ability to resign or cease its remarketing efforts, without a successor having
been named, subject to the terms of the Indenture and the Remarketing Agreement.
BoND TERMS AND RELATED DOCUMENTS
Descriptions of provisions of the Bonds and summaries of the Agreement and the
Indenture are set forth in the Original Official Statement under the following captions and the
information under the following captions in the Original Official Statement is incorporated by
reference in this Supplement to Official Statement:
THE BONDS
"Alternate Credit Facility," "Substitute Letter of Credit" and "Termination of Letter of
Credit or Alternate Credit Facility" under "THE LETTERS OF CREDIT."
CONVERSION OF RATE
THE AGREEMENT
THE INDENTURE
TAX EXEMPTION
Original Opinion. The opinion of Chapman and Cutler delivered on May 23, 1991
stated that, subject to the condition that the Issuer and the Company comply with certain
covenants made to satisfy pertinent requirements of the Internal Revenue Code of 1986 (the
"Code"), 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 Pollution Control
Facilities or any person considered to be related to such person (within the meaning of
Section 103(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
(since the Prior Bonds were issued prior to August 8, 1986). Interest on the Bonds will be taken
into account, however, in computing an adjustment used in determining the alternative minimum
tax for certain corporations. Ownership of the Bonds may result in other federal tax
consequences to certain taxpayers; no opinion was expressed regarding any such collateral
consequences arising with respect to the Bonds. In rendering this opinion, Chapman and Cutler
relied upon a certificate of the Company with respect to certain material facts solely within the
Company's knowledge relating to the Plant (as defined in the Indenture) and the application of
the proceeds of the Prior Bonds (as defined in the Indenture) and the Bonds.
-12-
In addition, such opinion stated that, under then existing laws of the State of Utah,
interest on the Bonds is exempt from taxes imposed by the Utah Individual Income Tax Act.
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
confirm that such covenants have been complied with.
Supplemental Opinion. Chapman and Cutler LLP will deliver an opinion in connection
with the delivery of the Letter of Credit to the effect that the delivery of the Letter of Credit (i) is
authorized under the Agreement and complies with the terms thereof and (ii) will not impair the
validity under the Act of the Bonds or will not cause the interest on the Bonds to become
includible in the gross income of the Owners thereof for federal income tax purposes. Except as
necessary to render the foregoing opinions, Chapman and Cutler LLP has not reviewed any
factual or legal matters relating to its opinion dated January 14, 1988 subsequent to its issuance
other than with respect to the Company in connection with (a) the adjustment of the interest rate
on the Bonds described in our opinion dated February 28, 1996, (b) the delivery of an Alternate
Credit Facility, dated as of May 15, 2001, (c) delivery of the Prior Letter of Credit, dated
September 15, 2004 and (d) the delivery of the Letter of Credit described herein. The opinion
delivered in connection with delivery of the Letter of Credit is not to be interpreted as a
reissuance of the original approving opinion as of the date of this Supplement to Official
Statement.
MISCELLANEOUS
This Supplement to Official Statement has been approved by the Company for
distribution by the Remarketing Agent to current Bondholders and potential purchasers of the
Bonds. THE ISSUER MAKES NO REPRESENTATION WITH RESPECT TO AND HAS NOT
PARTICIPATED IN THE PREPARATION OF ANY PORTION OF THIS SUPPLEMENT TO OFFICIAL
STATEMENT.
-13-
APPENDIX A
PACIFICORP
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 Agent, 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, or
that the information contained or incorporated herein by reference is correct as of any time after
the date hereof.
The Company, which includes PacifiCorp and its subsidiaries, is a United States
regulated electric company serving 1.7 million retail customers, including residential,
commercial, industrial and other customers in portions of the states of Utah, Oregon, Wyoming,
Washington, Idaho and California. PacifiCorp owns, or has interests in, 75 thermal,
hydroelectric, wind-powered and geothermal generating facilities, with a net owned capacity of
10,597 megawatts. PacifiCorp also owns, or has interests in, electric transmission and
distribution assets, and transmits electricity through approximately 16,200 miles of transmission
lines. PacifiCorp also buys and sells electricity on the wholesale market with other utilities,
energy marketing companies, financial institutions and other market participants as a result of
excess electricity generation or other system balancing activities. The Company is subject to
comprehensive state and federal regulation. The Company's subsidiaries support its electric
utility operations by providing coal mining and environmental remediation services. The
Company is an indirect subsidiary of MidAmerican Energy Holdings Company ("MEHC"), a
holding company based in Des Moines, Iowa, that owns subsidiaries principally engaged in
energy businesses. MEHC is a consolidated subsidiary of Berkshire Hathaway Inc. ("Berkshire
Hathaway"). MEHC controls substantially all of the Company voting securities, which include
both common and preferred stock.
The Company's operations are exposed to risks, including general economic, political
and business conditions, as well as changes in laws and regulations affecting the Company or the
electric utility industry; changes in, and compliance with, environmental laws, regulations,
decisions and policies that could, among other items, increase operating and capital costs, reduce
generating facility output, accelerate generating facility retirements or delay generating facility
construction or acquisition; the outcome of general rate cases and other proceedings conducted
by regulatory commissions or other governmental and legal bodies; changes in economic,
industry or weather conditions, as well as demographic trends, that could affect customer growth
and usage, electricity supply or the Company's ability to obtain long-term contracts with
customers; a high degree of variance between actual and forecasted load that could impact the
Company's hedging strategy and the costs of balancing generation resources and wholesale
activities with its retail load obligations; hydroelectric conditions, as well as the cost, feasibility
and eventual outcome of hydroelectric relicensing proceedings, that could have a significant
impact on electric capacity and cost and the Company's ability to generate electricity; changes in
prices, availability and demand for both purchases and sales of wholesale electricity, coal,
natural gas, other fuel sources and fuel transportation that could have a significant impact on
A-i
generation capacity and energy costs; the financial condition and creditworthiness of the
Company's significant customers and suppliers; changes in business strategy or development
plans; availability, terms and deployment of capital, including reductions in demand for
investment-grade commercial paper, debt securities and other sources of debt financing and
volatility in the London Interbank Offered Rate, the base interest rate for the Company's credit
facilities; changes in the Company's credit ratings; the impact of derivative contracts used to
mitigate or manage volume, price and interest rate risk, including increased collateral
requirements, and changes in the commodity prices, interest rates and other conditions that affect
the fair value of derivative contracts; the impact of investment performance and changes in
interest rates, legislation, healthcare cost trends, mortality and morbidity on the Company's
pension and other postretirement benefits expense and funding requirements; unanticipated
construction delays, changes in costs, receipt of required permits and authorizations, ability to
fund capital projects and other factors that could affect future generating facilities and
infrastructure additions; the impact of new accounting guidance or changes in current accounting
estimates and assumptions on consolidated financial results; other risks or unforeseen events,
including the effects of storms, floods, litigation, wars, terrorism, embargoes and other
catastrophic events; and other business or investment considerations that may be disclosed from
time to time in the Company's filings with the United States Securities and Exchange
Commission (the "Commission") or in other publicly disseminated written documents. 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,
Portland, Oregon 97232; the telephone number is [phone]. The Company was initially
incorporated in 1910 under the laws of the state of Maine under the name Pacific Power & Light
Company. In 1984, Pacific Power & Light Company changed its name to PacifiCorp. In 1989, it
merged with Utah Power and Light Company, a Utah corporation, in a transaction wherein both
corporations merged into a newly formed Oregon corporation. The resulting Oregon corporation
was re-named PacifiCorp, which is the operating entity today.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports and other
information with the Commission. Such reports and other information (including proxy and
information 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 1-800-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 .
A-2
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:
1.Annual Report on Form 10-K for the fiscal year ended December 31,2011.
2.Current Report on Form 8-K, dated January 6, 2012.
3.Current Report on Form 8-K, dated March 6, 2012.
4.Current Report on Form 8-K, dated April 3,2012.
5.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 Annual Report on Form 10-K for the year ended
December 31, 2011 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 10-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 10-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 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 PacifiCorp, 825 N.E. Multnomah, 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.
A-3
APPENDIX B
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
The following information concerning JPMorgan Chase Bank, National Association has
been provided by representatives of JPMorgan Chase Bank, National Association and has not
been independently confirmed or verified by the Issuer, the Company or any other party. No
representation is made by the Company or the Issuer as to the accuracy, completeness or
adequacy of such information and no representation is made as to the absence of material
adverse changes 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.
JPMorgan Chase Bank, National Association ("JPMorgan") is a wholly owned
subsidiary of JPMorgan Chase & Co., a Delaware corporation whose principal office is located
in New York, New York. JPMorgan offers a wide range of banking services to its customers,
both domestically and internationally. It is chartered and its business is subject to examination
and regulation by the Office of the Comptroller of the Currency.
As of December 31, 2011, JPMorgan, had total assets of $1,811.7 billion, total net loans
of $580.1 billion, total deposits of $1,190.7 billion, and total stockholder's equity of $131.0
billion. These figures are extracted from JPMorgan's unaudited Consolidated Reports of
Condition and Income (the "Call Report") as of December 31, 2011, prepared in accordance
with regulatory instructions that do not in all cases follow U.S. generally accepted accounting
principles. The Call Report including any update to the above quarterly figures is filed with the
Federal Deposit Insurance Corporation and can be found at www.fdic.gov .
Additional information, including the most recent annual report on Form 10-K for the
year ended December 31, 2011, of JPMorgan Chase & Co., the 2011 Annual Report of
JPMorgan Chase & Co., and additional annual, quarterly and current reports filed with or
furnished to the Securities and Exchange Commission by JPMorgan Chase & Co., as they
become available, may be obtained without charge by each person to whom this Official
Statement is delivered upon the written request of any such person to the Office of the Secretary,
JPMorgan Chase & Co., 270 Park Avenue, New York, New York 10017 or at the SEC's website
at www.sec.gov .
The information contained in this Appendix relates to and has been obtained from
JPMorgan. The delivery of the Official Statement shall not create any implication that there has
been no change in the affairs of JPMorgan since the date hereof, or that the information
contained or referred to in this Appendix is correct as of any time subsequent to its date.
B-i
APPENDIX C
OFFICIAL STATEMENT DATED MAY 22, 1991
c-i
[This Page Intentionally Left Blank]
Subject to compliance by the Company and the Issuer 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 a person who is a substantial user of the Project or any person considered to be
related to such person (within the meaning of Section 103(b) (13) 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, as more fully discussed under the heading "TAX EXEMP -
TION" herein. Bond Counsel is also of the opinion that under present law such interest will be exempt from
taxes imposed by the Utah Individual Income Tax Act, as more fully discussed under the heading "TAX
EXEMPTION" herein. -'
• $45,000,000
Emery County, Utah
Pollution Control Revenue Refunding Bonds
(PacifiCorp Project)
Series 1991
lntetst Accrual: Date of Delivery Due: July 1, 2015
The Bonds are limited obligations of the Issuer and, except to the extent payable from any moneys
pledged therefor, will be payable solely from and secured by a pledge of payments to be made under a Loan
Agreement with
PacifiCorp
and from funds drawn under an irrevocable direct-pay Letter of Credit issued by the Los Angeles Branch of
Credit Suisse
Under the Letter of Credit, the Trustee will be entitled to draw through May 23, 1994 (unless earlier
terminated or extended) up to an amount sufficient to pay the principal of and, initially, up to 294 days'
accrued interest on the Bonds at 12% per annum to be used (a) to pay the principal of and interest on the
Bonds and (b) to pay the purchase price of Bonds tendered by the Owners thereof as provided in the
Indenture.
Initially, each Bond will bear interest from the date of first authentication and delivery thereof at a Flexible
Rate, determined by the Remarketing Agent, for the Flexible Period selected by the Owner thereof, as
described herein. Thereafter, the interest rate on the Bonds may be changed in accordance with the Indenture
to a Daily, Weekly, Monthly or Term Interest Rate.
The Bonds are subject to conversion to interest rates other than Flexible Rates as more fully described
herein. After such conversion, such Bonds may cease to be subject to purchase as described herein. Upon the
terms and conditions described herein, the Bonds will be subject to redemption prior to maturity.
The Bonds are issuable as fully registered Bonds without coupons, initially in the denomination of
$100,000 and integral multiples of $5,000 in excess thereof. Interest on the Bonds while the Bonds bear
interest at Flexible Rates will be payable on the Flexible Date with respect to each Bond by check mailed to the
person in whose name such Bond is registered at the close of business on the record date. Interest may, at the
option of any Owner of Bonds in an aggregate principal amount of at least $1,000,000, be transmitted by wire
transfer to such Owner. Principal of and premium, if any, on all Bonds will be payable at the principal corporate
trust office of The First National Bank of Chicago, as Trustee, in Chicago, Illinois.
Price:. 100%
The Bonds are offered when, as and if issued by the Issuer and accepted by the 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 the Underwriter by its counsel, Winthrop, Stimson, Putnam &
Roberts. It is expected that the Bonds will be available for delivery in New York, New
York, on or about May 23, 1991 against payment therefor.
May 22, 1991
Goldman, Sachs & Co.
• _••. •.!I . .. . ••-•.••..• - 1 •.
No broker, dealer, salesman or other person has been authorized to give any Information or
to make any representations other than those contained in this Official Statement in connection
with the offering made hereby and, if given or made, such information or representations must
not be relied upon as having been authorized by the Issuer, PaciflCorp, Credit Suisse or the
Underwriter. 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 Issuer,
Credit Suisse or PaclflCorp since the date hereof. The Issuer has not or will not assume any
responsibility as to the accuracy or completeness of the information in this Official Statement,
other than that relating to itself under the caption "THE Issues." Upon 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 Official Statement or, other than the Issuer, approved the Bonds for safe.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
TABLE OF CONTENTS
ff9!
Introductory Statement ....................................... 3
TheIssuer .................................................. 4
The Project and Use of Proceeds ............................... 4
TheBonds .................................................. 4
The Letter of Credit .......................................... 12
Conversion of Rate........................................... 14
The Agreement .............................................. 15
The Indenture ............................................... 18
Underwriting ................................................. 24
Tax Exemption .............................................. 24
Certain Legal Matters ........................................ 25
Miscellaneous ............................................... 26
APPENDIX A - PacifiCorp
App€tiox B - Credit Suisse
APP€1oIx C - Alternative Interest Rates
APPENDIX U - Form of Opinion of Bond Counsel
2
$45 90009000
Emery County, Utah
Pollution Control Revenue Refunding Bonds
(PaciflCorp Project)
Series 1991
INTRODUCTORY STATEMENT
This Official Statement is provided to furnish certain information with respect to the offer by Emery
County, Utah (the "Issuer") of $45,000,000 aggregate principal amount of Pollution Control Revenue
Refunding Bonds (PacifiCorp Project) Series 1991 (the "Bonds").
The Bonds are being issued pursuant to a Trust indenture dated as of May 1, 1991 (the
"Indenture") between the Issuer and The First National Bank of Chicago, as Trustee (the "Trustee").
The proceeds from the sale of the Bonds will be loaned to PacifiCorp, the successor to Utah Power &
Light Company (the "Company"), pursuant to the terms of a Loan Agreement dated as of May 1, 1991
(the "Agreement") and used to refund the Issuer's $45,000,000 Pollution Control Revenue Bonds,
11 11e% Series due April 1, 2011 (Utah Power & Light Company Project) (the "Prior Bonds"). The
proceeds of the Prior Bonds were used to finance a portion of the Company's cost of acquiring,
constructing and installing certain air and water pollution control and solid waste disposal facilities (the
"Project") at the Hunter coal-fired, steam electric generating plant (the "Station") located in Emery
County, Utah.
The Bonds, together with the premium, if any, and interest thereon, shall not constitute nor give rise
to a general obligation or liability of the Issuer or a charge against its general credit or taxing powers nor
an indebtedness of or a loan of credit thereof and shall be payable solely from the revenues to be
received by the issuer under the Agreement and from any other moneys pledged under the Indenture for
such purpose, including moneys drawn under the Letter of Credit (hereinafter defined) or an Alternate
Credit Facility (hereinafter defined), as the case may be. The Issuer shall not be obligated to pay the
purchase price of the Bonds from any source. Under the Agreement, the Company is unconditionally
obligated to pay amounts sufficient to provide for payment of the principal of, premium, if any, and
interest on the Bonds (the "Loan Payments") and for payment of the purchase price of the Bonds.
The Bonds will be supported by an irrevocable direct-pay Letter of Credit (the "Letter of Credit") to
be issued by Credit Suisse, acting through its Los Angeles Branch (the "Bank"). The Trustee will be
entitled to draw under the Letter of Credit through May 23, 1994 (unless earlier terminated or extended)
up to an amount sufficient to pay the principal of, and, initially, up to 294 days' accrued interest on the
Bonds at 12% per annum to be used (a) to pay the principal of and interest on the Bonds and (b) to pay
the purchase price of Bonds tendered by Owners thereof as provided in the Indenture. The Company is
permitted under the Agreement and the Indenture to provide a letter of credit (the "Substitute Letter of
Credit") issued by the Bank which is identical to the Letter of Credit except for terms as described
herein. As used hereafter, "Letter of Credit" shall, unless the context otherwise requires, mean such
Substitute Letter of Credit from and after the issuance date thereof. The Company also is permitted under
the Agreement and indenture to provide for the delivery of an alternate credit facility (an "Alternate
Credit Facility") as described in the Indenture to replace a Letter of Credit or provide for the termination
of a Letter of Credit or any Alternate Credit Facility then in effect. The entity obligated to make payments
under an Alternate Credit Facility shall be referred to hereafter as the "Obligor on the Alternate Credit
Facility." See "THE LE1-rER OF CREXT" and "THE BONDS - Redemption Upon Expiration or Termination of
Letter of Credit or Alternate Credit Facility."
3
Brief descriptions of the Issuer, the Bonds, the Letter of Credit, the method by which the interest rate
on the Bonds is changed, the Agreement and the Indenture are included in this Official Statement,
including Appendix C hereto. Information regarding the business, properties and financial condition of the
Company is included in Appendix A hereto. A brief description of the Bank is included as Appendix B
hereto. The descriptions herein of the Agreement, the Indenture and the Letter of Credit are qualified in
their entirety by reference to such documents, and the descriptions herein of the 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 may be obtained from the principal corporate trust office of the Trustee in Chicago, Illinois
and, during the initial offering period, at the principal office of Goldman, Sachs & Co. in New York, New
York.
THE ISSUER
The Issuer 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 "Act"), the Issuer is authorized to issue the Bonds, to
enter into the Indenture and the Agreement and to secure Bonds by an assignment to the Trustee of the
payments to be made by the Company under the Agreement and a pledge of other moneys deposited
with the Trustee under the Indenture. The Bonds will be limited obligations of the Issuer as described
above.
THE PROJECT AND USE OF PROCEEDS
The Project financed in part with the proceeds of the Prior Bonds consists of certain air and water
pollution control and solid waste disposal facilities at the Station.
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 $45,000,000 principal amount of the Prior Bonds at 103% of the Principal
amount of such Prior Bonds plus accrued interest thereon. An underwriting fee and the costs of issuance
of the Bonds will be paid by the Company, other than from the proceeds of the Bonds.
ij;l1'11
Reference is hereby made to the Bonds in their entirety for the detailed provisions thereof. Certain
terms used herein are set forth below under the caption "THE Bor4os - Certain Definitions".
General
The Bonds will mature on July 1, 2015 and are dated as of May 1, 1991. Bonds authenticated prior
to the first Interest Payment Date shall bear interest from the date of the first authentication and delivery
of Bonds. Bonds authenticated on or after the first Interest Payment Date thereon shall bear interest from
the Interest Payment Date next preceding the date of authentication thereof. Each Bond shall bear
interest on overdue principal and, to the extent permitted by law, on overdue premium, if any, and interest
at the rates borne by the Bonds during such time.
The First National Bank of Chicago is Trustee and Registrar under the Indenture and has its
corporate trust office in Chicago, Illinois. First Chicago Trust Company of New York has been designated
as the delivery office of the Trustee and Registrar in New York, New York, for certain purposes. The
Trustee and Registrar may be removed or replaced by the Issuer at the direction of the Company.
Principal of, premium, if any, and interest on the Bonds are payable at the place and in the manner
specified on the cover page of this Official Statement. Bonds may be transferred or exchanged for Bonds
of authorized denominations at the principal corporate trust office in Chicago, Illinois of The First National
4
Bank of Chicago or at the delivery office in New York, New York of the Trustee, without cost to the Owner,
except for any tax or other governmental charge.
Goldman, Sachs & Co. has, at the direction of the Company, been appointed Remarketing Agent
(the "Remarketing Agent') under a remarketing agreement and is acting in that capacity under the
Indenture. The principal office of Goldman, Sachs & Co. is located in New York, New York. The
Remarketing Agent may be removed or replaced by the Issuer at the direction of the Company and with
the written consent of the Bank and the Issuer upon the giving of at least 30 days notice. The
Remarketing Agent may at any time resign and be discharged of its duties and obligations as such by
giving at least 30 days' notice to the Company, the Issuer, the Bank, the Registrar and the Trustee.
Interest on the Bonds
Flexible Rates. The Bonds shall initially bear interest at Flexible Rates not exceeding 12% per
annum, which is, with respect to each Bond for a Flexible Period, an interest rate on such Bond
established as hereafter described. Such interest will be payable on the Flexible Date for such Bond.
"Flexible Date" means, with respect to each Bond, the day next succeeding the last day of a Flexible
Period. "Flexible Period" means, with respect to each Bond, each consecutive period (one to no more
than 270 days, or one to 365 or 366 days, as applicable, as determined by the Company, as described
under the caption "THE LETTER OF CREDIT - Substitute Letter of Credit") established pursuant to the
Indenture during which such Bond shall bear interest at a particular Flexible Rate. On the date interest
starts to accrue on the Bonds at Flexible Rates and thereafter on each Flexible Date with respect to any
Bond, except any Flexible Date that is a Conversion Date, the Remarketing Agent shall determine for
each Flexible Period the interest rate which, in the judgment of the Remarketing Agent, when borne by a
Bond having such a Flexible Period would be the minimum interest rate necessary to enable the
Remarketing Agent to sell such Bond on such date at a price equal to 100% of the principal amount
thereof.
Conversion to Alternative Rates. The method of determining interest payable on the Bonds may be
converted from a Flexible Rate to another Floating Interest Rate (a Daily Interest Rate, a Weekly Interest
Rate or a Monthly Interest Rate) or a Term Interest Rate (as each of those terms is described in Appendix
C hereto) or from any such method of determination to any other method of determination under the
conditions described below under the caption "Cotivsiot4 OF RATE." The date on which the method of
determining the interest on the Bonds is converted to another method, including a change in the duration
of a Term Period (as that term is defined in Appendix C), is a "Conversion Date." Certain terms
applicable to the Bonds at such time as the Bonds are not bearing interest at Flexible Rates are
described in Appendix C hereto.
Payment and Accrual of Interest. The Bonds shall bear interest from and including the date of the
first authentication and delivery thereof until payment of the principal or redemption price thereof shall
have been made or provided for in accordance with the provisions of the Indenture, whether at maturity,
upon redemption, acceleration or otherwise, at the lesser of (i) the Maximum interest Rate (as hereafter
defined) or (ii) the rate determined as described under the caption 'THE Bcwins - Interest on the
Bonds" and in Appendix C hereto. 'Maximum interest Rate" means (I) while a Letter of Credit (or an
Alternate Credit Facility, if applicable) is outstanding, the lesser of 20% per annum or the Interest
Coverage Rate and (ii) at all other times', 20% per annum. "Interest Coverage Rate" means the rate
specified in the Letter of Credit (or an Alternate Credit Facility, if applicable), initially 12%, which is used
to determine the maximum amount that can be drawn to pay interest on the Bonds (or the portion of the
purchase price corresponding to accrued interest) (the "Interest Component") for the number of days
specified in the Letter of Credit (the "Interest Coverage Period"), initially 294 days.
Interest accrued on the Bonds during each Interest Period shall be paid to the Owner as of the
Record Date on the next succeeding Interest Payment Date and, while the Bonds bear a Floating Interest
Rate, computed on the basis of a year of 365 or 366 days, as applicable, for the actual number of days
elapsed and, while the Bonds bear a Term Interest Rate, computed on the basis of a year of 360 days
consisting of twelve 30-thy months.
5
Certain Definitions
"Authorized Denomination" means (i) $100,000 and integral multiples of $5,000 in excess thereof
while the Bonds bear interest at Flexible Rates, (ii) $100,000 and integral multiples thereof while the
Bonds bear interest at a Daily Interest Rate, a Weekly Interest Rate or a Monthly Interest Rate, and (iii)
$5,000 and integral multiples thereof while the Bonds bear interest at a Term Interest Rate.
"Business Day" means a day (a) on which banks located in New York, New York, banks located in
the city in which the office of the Bank to which presentation of drafts upon the Letter of Credit are made
is located (or the principal office of the Obligor on the Alternate Credit Facility is located, as the case may
be), and banks located in the city in which the principal office of the Trustee is located are not required or
authorized by law to remain closed or are not closed, and (b) on which The New York Stock Exchange,
the principal office of the Remarketing Agent and the New York delivery office of the Trustee are not
closed.
"Interest Accrual Date" means, with respect to any Interest Period (i) during which interest on the
Bonds accrues at Flexible Rates, the last day of the applicable Flexible Period, (ii) during which interest
on the Bonds accrues at a Daily Interest Rate, a Weekly Interest Rate or a Monthly Interest Rate, the day
next preceding the first Business Day of the next succeeding calendar month and (iii) during which
interest on the Bonds accrues at a Term Interest Rate, the day next preceding January 1 and July 1 of
each year.
"Interest Payment Date" means (a) the day next succeeding the Interest Accrual Date, and (b) any
Conversion Date.
"Interest Period" means the period from and including the date interest starts to accrue on the
Bonds pursuant to a particular method of calculating interest to and including the next succeeding
Interest Accrual Date and each succeeding period from the day next succeeding such Interest Accrual
Date to and including (i) the next succeeding Interest Accrual Date or (ii) if earlier, the day next
preceding a Conversion Date.
"Record Date" means (a) when a Bond bears interest at a Flexible Rate, the first day of a Flexible
Period for such Bond; (b) when the Bonds bear interest at a Daily Interest Rate, a Weekly Interest Rate or
a Monthly Interest Rate, the Interest Accrual Date; and (c) when the Bonds bear interest at a Term
Interest Rate, the fifteenth day of the calendar month next preceding any Interest Payment Date.
Purchase of Bonds
Purchase While Bonds Bear Flexible Rates. On the Flexible Date with respect to a Bond, such Bond
shall be purchased at a purchase price equal to '100% of the principal amount thereof upon delivery of the
Bond (with all necessary endorsements) to the New York delivery office of the Trustee. If the Owner
elects not to have his Bond purchased on such Flexible Date, the Owner shall give telephonic or written
notice to the Remarketing Agent not later than 10:00 a.m.. New York, New York time, on the Business
Day next preceding the Flexible Date stating that the Owner elects not to have his Bond purchased on
such Flexible Date and stating the next Flexible Period for such Bond, in which event and upon receipt of
appropriate information confirmed in writing from the Remarketing Agent, the Trustee shall issue a new
Bond to such Owner reflecting the next Flexible Period in exchange for the Bond then held by such
Owner. Bonds to be purchased which are not delivered by the Owner thereof shall be deemed to have
been delivered by the Owner thereof for purchase and to have been purchased, provided that there have
been irrevocably deposited with the Trustee moneys in accordance with the Indenture in an amount
sufficient to pay the purchase price of such Bonds. Moneys deposited with the Trustee for such purchase
of Bonds shall be held in trust in a separate escrow account without liability for interest thereon and shall
be paid to the Owners of such Bonds upon presentation thereof. The Trustee shall on the last day of each
month give written notice to the Company whether Bonds have not been delivered, and upon direction to
'do so by the Company, the Trustee shall give notice by first class mail to each Owner whose Bonds are
deemed to have been purchased that moneys representing the purchase price of such Bonds are
available against delivery thereof at the New York delivery office of the Trustee and that interest on such
Bonds ceased to accrue on the applicable Flexible Date.
While Bonds Bear Alternative Rates. While a Bond bears a Daily Interest Rate, a Weekly Interest
Rate, a Monthly Interest Rate or a Term Interest Rate, such Bond will be purchased on the demand of the
Owner thereof, as described in Appendix C hereto.
Funds for Purchase of Bonds. On the date on which Bonds delivered to the Trustee for purchase as
specified above under "THE BONDS - Purchase of Bonds - Purchase While Bonds Bear Flexible Rates"
or as described in Appendix C hereto are to be purchased, such Bonds shall be purchased at a purchase
price equal to 100% of the principal amount thereof, plus accrued interest, if any. Funds for the payment
of such purchase price shall be derived 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) directed by the Company to be used to
purchase Bonds as described in the Indenture;
(b)proceeds of the sale of such Bonds by the Remarketing Agent;
(c)Available Moneys or moneys drawn under the Letter of Credit or an Alternate Credit Facility,
as the case may be, for the purchase of deleased Bonds;
(d)proceeds of a drawing under the Letter of Credit or an Alternate Credit Facility, as the case
may be, for such purchase; and
(e)any other moneys furnished by the Company 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) during such time as a Letter of Credit or an Alternate Credit Facility
which does not consist of Mortgage Bonds (as defined in the Indenture) of the Company is outstanding,
(i ) moneys on deposit in trust with the Trustee for a period of 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, (ii) proceeds of the issuance of refunding bonds if, in the written opinion of
nationally recognized counsel experienced in bankruptcy matters and acceptable to the Issuer, Moody's
Investors Service ("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 proceeds with the Trustee),
the deposit and use of such proceeds 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, and (iii) any other money the application of which will not, in the
written opinion of nationally recognized counsel experienced in bankruptcy matters and acceptable to the
Issuer, 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 such application), constitute a voidable preference
under, Section 544 or 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, and (b) at any time that a Letter of
Credit or an Alternate Credit Facility is not outstanding, or if an Alternate Credit Facility consisting of
Mortgage Bonds of the Company is outstanding, any moneys on deposit with the Trustee and proceeds
from the investment thereof.
Remarketing of Bonds
While the Bonds bear interest at Flexible Rates, the Remarketing Agent shall offer for sale and use its
best efforts to remarket any Bond to be purchased on a Flexible Date on such Flexible Date, any such
remarketing to be made at a price equal to 100% of the principal amount thereof and for such Flexible
Periods as determined by the Remarketing Agent. In the event more than one prospective purchaser has
offered to purchase a Bond on a Flexible Date, the Remarketing Agent shall remarket the Bond to the
purchaser from among such prospective purchasers who has selected the next Flexible Period for such
Bond which will, in the Remarketing Agent's judgment, taking into consideration the overall yield curve
determined as of such Flexible Date and projected market conditions during the succeeding 270 days or
365 or 366 days, as applicable (depending on the maximum length of the then current Interest Coverage
7
Period), be the most beneficial for the financing program while the Bonds bear interest at Flexible Rates.
If a Bond cannot be remarketed, the Flexible Date for such Bond shall be the next Business Day. While
Bonds bear a Daily Interest Rate, a Weekly Interest Rate, a Monthly Interest Rate or a Term interest Rate,
the Remarketing Agent will offer for sale and use its best efforts to remarket Bonds to be purchased on
the dates and at the purchase prices as described in this Official Statement.
No Purchases or Sales After Certain Defaults. Anything in the Indenture to the contrary notwith-
standing, (I) at any time when neither the Letter of Credit nor an Alternate Credit Facility, as the case
may be, is outstanding, there shall be no purchases or sales of Bonds as described above, and (ii) at any
time during which the Letter of Credit or an Alternate Credit Facility, as the case may be, is outstanding,
there shall be no sales of Bonds, if (A) there shall have occurred and not have been cured or waived an
Event of Default described in paragraph (a), (b), (c), (d) or (e) under the caption "THE INDENTURE -
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
INDENTURE - Remedies" and such declaration has not been rescinded pursuant to the Indenture.
Optional Redemption of Bonds
(a)While a Bond bears interest at a Flexible Rate, such Bond shall be subject to optional
redemption on any Interest Payment Date for such Bond by the Issuer, in whole or in part (and if in part in
an Authorized Denomination), at the written direction of the Company, at 100% of the principal amount
thereof, plus accrued interest to the date of redemption, if any, upon at least 30 days' prior notice from
the Company to the Issuer and the Trustee.
(b)While the Bonds bear interest at a Daily Interest Rate, a Weekly Interest Rate or a Monthly
Interest Rate, the Bonds shag be subject to optional redemption on any Interest Payment Date by the
Issuer,. in whole or in part (and if in part in an Authorized Denomination), at the written direction of the
Company, at 100% of the principal amount thereof, plus accrued interest to the date of redemption, if
any, upon at least 30 days' prior notice from the Company to the Issuer and the Trustee.
(c)While the Bonds bear interest at a Term Interest Rate, the Bonds shall be subject to optional
redemption on any Interest Payment Date by the Issuer, in whole or in part (and if in part in an Authorized
Denomination), at the direction of the Company, upon at least 30 days' prior notice from the Company to
the Issuer and the Trustee; provided, however, that the Bonds shall not be redeemable during the No-CaB
Period shown below, which shall begin on the first day of the Term Period. On and during the six months
after the Interest Payment Date that ends the No-Call Period (or the next succeeding Interest Payment
Date, if the No-Call Period does not end on an Interest Payment Date), the Bonds shall be redeemable at
the percentage of their principal amount shown in the Initial Redemption Price column plus interest
accrued to the redemption date. The redemption price shall decline semiannually by the amount shown in
the SemiAnnual Reduction in Redemption Price column until the Bonds shall be redeemable without
premium in the year or portion of a year indicated in the No Premium column and in any later years or
periods in the Term Period.
Temi Pedod SemiAnnual
Equal to Initial Reduction in
or Gnater Less HoCaIl Redemption Redemption
Than Than Period Price Price No Premium
18 Years N/A 5 Years 103% 1/2% 9th Year
12 Years 18 Years 5 Years 103 112 9th YOST
9 Years 12 Years 5 Years 102 1/2 8th Year
7 Years 9 Years 5 Years 101 1/2 7th Year
5 Years 7 Years 3 Years 101 1/2 5th Year
3 Years 5 Years 2 Years 100'/2 1/4 4th Year
2 Years 3 Years 1 Year 100h/4 1/, 18th Month
1 Year 2 Years 6 Months 1001/8 'Ia 12th Month
6 Months 1 Year 6 Months 100 N/A N/A
If the Term Period is less than six months, the Bonds will not be redeemable as described in this
paragraph. While a Letter of Credit or an Alternate Credit Facility, as the case may be, is outstanding, the
Company may only cause a redemption of Bonds as described in this paragraph which would require a
payment of a premium if on the date of the giving of notice of redemption the Trustee has Available
Moneys in the Bond Fund or can draw under the Letter of Credit or an Alternate Credit Facility, as the
case may be, in an amount sufficient to pay such premium due on the date of redemption. The initial
Letter of Credit does not provide for drawings in respect of the amount of any such redemption premium.
If the interest rate borne by the Bonds is converted pursuant to the Indenture, and if in connection
with such conversion the Company directs in writing to the Trustee and the Remarketing Agent pursuant
to the Indenture that the foregoing schedule of premiums and No-Call Periods be revised and specifies
the new premiums and No-Call Periods, the foregoing schedule of premiums and No-Call Periods shall be
revised in accordance with such direction of the Company.
Extraordinary Optional Redemption of Bonds
At any time, the Bonds shall be subject to redemption by the Issuer in whole or in part (and if in part,
in an Authorized Denomination), at the direction of the Company, upon at least 30 days' prior notice from
the Company to the Issuer and the Trustee, at 100% of the principal amount thereof plus accrued interest
to the redemption date, but without premium, if the Company shall deliver a certificate stating that one of
the following events has occurred:
(I) the Company shalt have determined that the continued operation of the Station 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 Station shall have been condemned or taken by
eminent domain; or
(iv)the operation of the Project or the Station 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 in whole or in part at 100% of the principal amount
thereof plus accrued interest to the date of redemption within 180 days following a "Determination of
Taxability" as described below. The Bonds shall be redeemed either in whole or in part in such principal
amount that the interest payable on the Bonds remaining outstanding after such redemption would not be
includible in the gross income of any Owner thereof for purposes of federal income taxation, other than an
Owner of a Bond who is a "substantial user" of the Project (as hereinbefore defined) or a "related
person" within the meaning of Section 103(b) (13) of the Internal Revenue Code of 1954, as amended
(the "1954 Code").
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 Internal Revenue Code
of 1986 (the "Code") (other than an Owner who is a "substantial user" or "related person" within the
meaning of Section 103(b)(13) 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 (a) 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 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 Bank (or the Obligor on the 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 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 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 Agreement, which failure results in a Determination of Taxability.
Redemption Upon Expiration or Termination
of Letter of Credit or Alternate Credit Facility
The Bonds are subject to mandatory redemption by the Issuer, in whole, at a price equal to 100% of
the principal amount thereof, plus accrued interest, if any, on the earlier of (i) the Interest Payment Date
next preceding the date of the expiration of the Letter of Credit or the Alternate Credit Facility except as
provided in the following clause (ii), or (ii) a Business Day not fewer than five days next preceding the
Business Day next preceding the termination date of the Letter of Credit or the Alternate Credit Facility as
specified by the Company in a notice regarding delivery of a proposed Alternate Credit Facility or with
respect to termination of the Letter of Credit or Alternate Credit Facility, except in connection with such
delivery or termination where the Company provides written evidence from Moody's, if the Bonds are then
rated by Moody's, and Standard & Poor's Corporation ("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 Credit Facility or the
proposed termination of the Letter of Credit or Alternate Credit Facility and that the delivery of the
proposed Alternate Credit Facility or such termination, respectively, will not, by itself, result in a reduction,
suspension or withdrawal of its rating on the Bonds and further that the Company provides an opinion of
Bond Counsel described herein under the caption "THE LETTER OF CREDIT - Alternate Credit Facility" and
"THE LETTER OF CREDIT - Termination of Letter of Credit or Alternate Credit Facility." Notwithstanding the
foregoing, there shall not be so redeemed (a) Bonds delivered to the Trustee for purchase on such
Interest Payment Date or on such Business Day or on any Business Day from the date of notice of such
redemption through the date of such redemption, (b) Bonds with respect to which the Trustee shall have
received written directions not to so redeem the same from the Owners thereof, (c) Bonds purchased or
deemed to have been purchased pursuant to the Indenture as described below under "TIE BONDS -
Purchase by Company in Lieu of Redemption," and (d) Bonds issued in exchange for or upon the
registration of transfer of Bonds referred to in the preceding clauses (a) and (b).
An Owner of Bonds may direct the Issuer not to redeem any Bond or Bonds owned by it by delivering
to the Trustee at its New York delivery office on or before the third Business Day preceding the date fixed
for such redemption an instrument or instruments In writing executed by such Owner which, among other
things, (I) specifies the numbers and denominations of the Bonds held by such Owner, (ii) specifically
acknowledges each of the matters set forth in a notice given by the Trustee, and (iii) directs the Issuer
not to redeem such Bonds. Any such instrument delivered to the Trustee shall be irrevocable with respect
to the redemption for which such instrument was delivered and shall be binding upon subsequent
Owners of such Bonds, including Bonds issued in exchange therefor or upon the registration of the
transfer thereof.
10
Redemption Upon Conversion
The Bonds shall be subject to mandatory redemption by the Issuer, in whole, on a Conversion Date,
at 100% of the principal amount thereof plus accrued interest, if any, or in the case of Bonds to be
redeemed upon conversion from a Term Interest Rate, at the percentage of their principal amount at
which they would be redeemed as described above under paragraph (c) of 'THE BONDS - Optional
Redemption of Bonds" on the Conversion Date; provided that there shall not be so redeemed (a) Bonds
delivered to the Trustee for purchase on such Conversion Date or on any Business Day from the date
notice of such redemption is given through the date of such redemption, (b) Bonds with respect to
which the Trustee shall have received written directions not to so redeem the same from the Owners
thereof, (c) Bonds purchased or deemed to have been purchased pursuant to the Indenture as
described below under "THE BoNDs - Purchase by Company in Lieu of Redemption," and (d) Bonds
issued in exchange for or upon the registration of transfer of Bonds referred to in clauses (a) and (b)
above. If the Term Period is less than six months, the Bonds will not be redeemable as described in this
paragraph. While a Letter of Credit or an Alternate Credit Facility, as the case may be, is outstanding, the
Company may only cause a redemption of Bonds as described in this paragraph which would require 'a
payment of a premium if on the date of the giving of notice of redemption the Trustee can draw under the
Letter of Credit or an Alternate Credit Facility, as the case may be, in an amount sufficient to pay such
premium due on the date of redemption. The initial Letter of Credit does not provide for drawings in
respect of the amount of any such redemption premium.
An Owner may direct the Issuer not to redeem any Bond or Bonds owned by it by delivering to the
New York delivery office of the Trustee on or before the third Business Day (sixth Business Day if the
Bonds are to be converted to a Term Interest Rate) preceding the date fixed for such redemption an
instrument or instruments in writing executed by such Owner which, among other things, (i) specifies
the numbers and denominations of the Bonds held by such Owner, (ii) specifically acknowledges each
of the matters set forth in a notice given by the Trustee, and (iii) directs the Issuer not to redeem such
Bonds. Any such instrument delivered to the Trustee shall be irrevocable with respect to the redemption
for which such instrument is delivered and shall be binding upon subsequent Owners of such Bonds',
including Bonds issued in exchange therefor or upon the registration of the transfer thereof.
Denomination Redemption
The Bonds or portions thereof are subject to mandatory redemption by the Issuer on the Interest
Payment Date upon which the Bonds begin to accrue interest at (I) a Daily Interest Rate, a Weekly
Interest Rate, a Monthly Interest Rate or Flexible Rates following conversion from a Term Interest Rate,
and (ii) a Daily Interest Rate, a Weekly Interest Rate or a Monthly Interest Rate following conversion from
Flexible Rates, in each case, in such amounts so that all outstanding Bonds are in Authorized
Denominations.
Purchase by Company in Lieu of Redemption
The Company shall have the right to purchase or cause to be purchased Bonds to be redeemed as
described above under "THE BONDS - Redemption Upon Expiration or Termination of Letter of Credit or
Alternate Credit Facility," "THE BoNDs - Redemption Upon Conversion" and "THE BoNDs - Denomina-
tion Redemption" at a purchase price equal to 100% of the principal amount of the Bonds to be so
purchased plus accrued interest,, if any, or in the case of a purchase on conversion from a Term interest
Rate, the redemption price for redemption of such Bonds on the Conversion Date as described above
under (c) of "THE BONDS - Optional Redemption of Bonds." Moneys for the payment of the purchase
price shall be derived, in the following order of priority, from: (i) Available Moneys furnished by the
Company for such purchase, (ii) proceeds of the sale of such Bonds, (iii) Available Moneys or moneys
drawn under the Letter of Credit or Alternate Credit Facility, as the case may be, for the purchase of
defeased Bonds, (iv) moneys drawn under the Letter of Credit or an Alternate Credit Facility, as the case
may be, for such purchase and (v) any other moneys furnished by the Company for such purchase;
provided, however, that funds for the payment of the purchase price of defeased Bonds shall be derived
only from the sources described in (ii) and (iii) above, in such order of priority; and provided further that
11
I
if in connection with such redemption, the Letter of Credit or an Alternate Credit Facility which does not
consist of Mortgage Bonds of the Company is replaced with an Alternate Credit Facility consisting of
Mortgage Bonds of the Company or is not being replaced by any other Alternate Credit Facility, moneys
for the payment of the purchase price of the Bonds may not be derived from (ii) above. Bonds to be so
purchased pursuant to the Indenture on the date fixed for redemption of such Bonds which are not
delivered on such date will nonetheless be deemed to have, been delivered for purchase by the Owners
thereof and to have been purchased pursuant to the Indenture. The Trustee shall hold moneys for such
purchase of Bonds, without liability for interest thereon, for the benefit of the former Owner of the Bond on
such date of purchase, who shall thereafter be restricted exclusively to such moneys for any claim of
whatever nature on such Owner's part under the Indenture or on, or with respect to, such Bond. Any
moneys so deposited with and held by the Trustee not so applied to the payment of Bonds within six
months after such date of purchase shall be paid by the Trustee to the Bank (or the Obligor on the
Alternate Credit Facility, as the case may be) to the extent of any amount payable under the
Reimbursement Agreement (as defined below) and the balance to the Company upon the written
direction of the Company, and thereafter the former Owners shall be entitled to look only to the Company
for payment, and then only to the extent of the amount so repaid, and the Company shall not be liable for
any interest thereon and shall not be regarded as a trustee of such money.
Procedure for and Notice of Redemption
If less than all of the Bonds shaft be called for redemption, the particular Bonds or portions thereof to
be redeemed shall be selected by the Trustee, in such manner as the Trustee in its sole discretion may
deem proper, in the principal amount designated by the Company or otherwise as required by the
Indenture. 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
denomination in which Bonds are then authorized to be issued at the time of such redemption. 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. 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 Indenture, at least 10 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 major bond rating agencies, certificate 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 moneys sufficient to pay the principal of,
premium, if any, and interest on such Bonds to be redeemed. If such moneys are not so received, the
Issuer will not redeem such Bonds and the Trustee shall give notice, in the manner in which the notice of
redemption was given, that such redemption will not take place.
THE LETTER OF CREDIT
The following is a brief description of the Letter of Credit and certain of the terms of the Letter of
Credit and the agreement dated as of May 1, 1991 between the Company and the Bank pursuant to
which such Letter of Credit is issued (a "Reimbursement Agreement" which term shall also include the
document pursuant to which an Alternate Credit Facility is issued), as well as a description of certain
terms of the Agreement.
The Letter of Credit will be an irrevocable direct-pay obligation of the Bank to pay to the Trustee,
upon request and in accordance with the terms thereof, up to (a) an amount equal to the outstanding
principal amount of the Bonds to be used (i) to pay the principal of the Bonds, (ii) to enable the Trustee
to pay the portion of the purchase price equal to 100% of the principal amount of Bonds delivered or
deemed delivered to it for purchase and not remarketed by the Remarketing Agent or (iii) to enable the
12
Company to purchase Bonds in lieu of redemption under certain circumstances, plus (b) an amount
equal to 294 days' accrued interest on the Bonds (calculated at a rate of 12% per annum and on the
basis of a year of 365 days), to be used (i) to pay interest on the Bonds or (ii) to enable the Trustee to
pay the portion of the purchase price of Bonds properly delivered for purchase equal to the accrued
interest, if any, on such Bonds. The Company is permitted under the Reimbursement Agreement and the
Agreement to secure an extension of the Letter of Credit beyond the expiration date of the then current
Letter of Credit, but the Bank is under no obligation to agree to such an extension.
The Bank's obligation under the Letter of Credit will be reduced to the extent of any drawings
thereunder. However, with respect to a drawing by the Trustee to enable the Trustee to pay the purchase
price of Bonds delivered for purchase and not remarketed by the Remarketing Agent, such amounts shall
be immediately reinstated upon reimbursement. With respect to a drawing by the Trustee for the
payment of interest on the Bonds, the amount that may be drawn under the Letter of Credit will be
automatically reinstated to the extent of such drawing as of the close of business on the ninth Business
Day following such drawing unless the Bank shall have notified the Trustee within nine Business Days
after such drawing that the Company has failed to reimburse the Bank or to cause it to be reimbursed for
such drawing.
Upon an acceleration of the maturity of the Bonds due to an event of default under the Indenture, the
Trustee will be entitled to draw on the Letter of Credit, if it is then in effect, to the extent of the aggregate
principal amount of the Bonds outstanding, plus up to 294 days' interest accrued and unpaid on the
Bonds, less amounts paid in respect of principal or interest for which the Letter of Credit has not been
reinstated as described above.
The Letter of Credit shall expire (the "Expiration Date") at 4:00 p.m. local time in Los Angeles,
California, upon the earliest of (i) May 23, 1994, unless otherwise extended pursuant to an agreement
between the Bank and the Company, (ii) the making of a final drawing under the Letter of Credit, or (iii)
the date the Trustee surrenders the Letter of Credit to the Bank for cancellation. The Trustee agrees to
surrender the Letter of Credit to the Bank, and not to make any drawing, after (i) the Expiration Date, (ii)
there are no Bonds outstanding under the Indenture, or (iii) a Substitute Letter of Credit or Alternate
Credit Facility, as the case may be, has been delivered to the Trustee.
Alternate Credit Facility
At any time (with notice to the Bank or the Obligor on the Alternate Credit Facility, as the case may
be) the Company may, at its option, provide for the delivery to the Trustee on any Business Day of an
Alternate Credit Facility to replace the Letter of Credit or the Alternate Credit Facility then in effect, as the
case may be. An Alternate Credit Facility may have an expiration date earlier than the maturity of the
Bonds, but in no event shall such Alternate Credit Facility have an expiration date earlier than one year
from the date of its delivery. The Company must furnish to the Trustee (i) an opinion of nationally
recognized Bond Counsel ("Bond Counsel") stating that the delivery of such Alternate Credit Facility is
authorized under the Agreement and complies with the terms thereof and will not impair the validity under
the Act of the Bonds or will not cause the interest on the Bonds to become includible in the gross income
of the Owners thereof for federal income tax purposes and (ii) 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 Credit Facility and that the delivery of the
proposed Alternate Credit Facility will not, by itself, result in a reduction, suspension or withdrawal of its
rating or ratings of the Bonds.
The Company may, however, at any time, provide for the delivery on any Business Day to the Trustee
of an Alternate Credit Facility where the above-described evidence from Moody's or S&P's is not
received. In that event, the Bonds are subject to redemption as more fully described herein under the
caption "THE BONDS - Redemption Upon Expiration or Termination of Letter of Credit or Alternate Credit
Facility".
13
• •••, .-.. ..• . . . . . .
Substitute Letter of Credit
The Company may, at its option, at any time provide for the delivery to the Trustee of a Substitute
Letter of Credit No Substitute Letter of Credit may be delivered which:
(i)so long as the Bonds bear interest at Flexible Rates, reduces the Interest Coverage Period
to a period shorter than 294 days (during such time as Flexible Periods can be from one to not more
than 270 days) or 389 or 390 days, as applicable (during such time as Flexible Periods can be from
one to 365 or 366 days, as applicable);
(ii)so long as the interest rate borne by the Bonds is a Daily Interest Rate, a Weekly Interest
Rate or a Monthly Interest Rate, reduces the Interest Coverage Period to a period shorter than 65
days;
(iii)so long as the interest rate borne by the Bonds is a Term Interest Rate, reduces the
Interest Coverage Period to a period shorter than 208 days; or
(iv)decreases the Interest Coverage Rate below 12%.
The Company may, at its option, at any time direct in writing the Trustee and the Remarketing Agent
to allow the selection of Flexible Periods of from one to 365 or 366 days, as applicable, or from one to 270
days, but only if (for such time as Flexible Periods can be from one to 365 or 366 days, as applicable)
the Company provides for the delivery to the Trustee of a Substitute Letter of Credit which increases the
Interest Coverage Period to 389 or 390 days, as applicable.
Termination of Letter of Credit or Alternate Credit Facility
At any time, the Company may, at its option, provide for the termination on any Business Day of the
Letter of Credit or any Alternate Credit Facility then in effect. The Company must furnish to the Trustee
(i) an opinion of Bond Counsel stating that the termination of the Letter of Credit or Alternate Credit
Facility is authorized under the Agreement and complies with the terms thereof and will not impair the
validity under the Act of the Bonds or will not cause the interest on the Bonds to become includible in the
gross income of the Owners thereof for purposes of federal income taxation and (ii) 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 termination of the Letter of
Credit or Alternate Credit Facility and that such termination will not, by itself, result in a reduction,
suspension or withdrawal of its rating or ratings of the Bonds.
The Company may, however, at any time, at its option, provide for the termination on any Business
Day of the Letter of Credit or any Alternate Credit Facility then in effect when the above-described
evidence from Moody's or S&P is not received. In that event, the Bonds are subject to redemption as
more fully described herein under the caption "Ti-is Bcnios - Redemption Upon Expiration or Termination
of Letter of Credit or Alternate Credit Facility."
CONVERSION OF RATE
Conversion to Term Interest Rate or Floating Interest Rates. The interest rate borne by the Bonds
(the type of interest rate in effect immediately prior to a conversion being herein called the "Existing
Rate") shall be converted to a Term Interest Rate, a Term Interest Rate with a Term Period of different
duration than the then current Term Period or any of the Floating Interest Rates, upon receipt by the
Trustee of a written direction from the Company specifying the specific method of interest accrual on the
Bonds and the effective date (which, if a Letter of Credit or an Alternate Credit Facility is outstanding,
shall be a date at least 11 days prior to the Interest Payment Date next preceding the scheduled
expiration date of the Letter of Credit or Alternate Credit Facility, as the case may be) of the conversion
to such method of accrual, specifying changes, if any, to the Bond redemption prices and No-Call Periods
and, if applicable, specifying the duration of the Term Period (which must be a period of six months or an
integral multiple thereof, provided that the first Term Period may be less than such period but must end
on the day next preceding a January 1 or July 1). The Conversion Date must be (a) if the Existing Rate is
14
a Floating Interest Rate, a Business Day not less than 30 days from the date of receipt by the Trustee of
the written direction from the Company specified above or (b) if the Existing Rate is a Term Interest
Rate, a January 1 or July 1 not less than 20 days after the receipt by the Trustee of the written notice
specified above and not prior to the end of the No-Call Period for such Term Period. The written direction
shall be accompanied by a written opinion, addressed to the Trustee, the Issuer, the Company, the Bank
(or the Obligor on the Alternate Credit Facility, as the case may be) and the Remarketing Agent, of Bond
Counsel selected by the Company and acceptable to the Trustee and the Remarketing Agent stating that
such conversion (i) is authorized or permitted by the Indenture, (ii) will not cause interest on the Bonds
to become includible in the gross income of the Owners thereof for purposes of federal income taxation
and (iii) will not violate the provisions of the Act or Utah law. The conversion of the interest rate borne by
the Bonds shall not become effective unless on the Conversion Date the Trustee shall have received an
opinion of Bond Counsel dated the Conversion Date reaffirming the conclusions of the opinion accompa-
nying the written direction of the Company initiating the conversion.
Inability To Convert. If for any reason a change in method of calculation of interest on the Bonds
cannot proceed, the Bonds shall continue to bear interest calculated in the method applicable prior to the
proposed change.
Notice to Owners of Conversion. The Trustee shall give notice by first-class mail to the Owners of
Bonds not less than 10 days and not more than 15 days prior to the Conversion Date. Such notice shall
state (i) that the method of determining the interest rate on the Bonds will be converted to an alternate
method of determining the rate, (ii) the effective date of the alternate method of determining the rate,
(iii) the procedures and dates involved in determining the rate and the procedure for notifying Owners of
the interest rate, (iv) when interest on the Bonds will be payable after the effective date, (v) if the
Trustee has been so notified by the Company, whether the Letter of Credit or an Alternate Credit Facility,
as the case may be, will be in effect after such effective date and, if so, the issuer, the expiration terms
and the interest coverage (including the Interest Coverage Period and the Interest Coverage Rate) of the
Letter of Credit or Alternate Credit Facility, as the case may be, (vi) whether subsequent to such
effective date the Owners of Bonds will no longer have the right to deliver Bonds to the Trustee for
purchase, (vii) that the rating on the Bonds by Moody's, if the Bonds are then rated by Moody's, and
S&P, if the Bonds are then rated by S&P, may be reduced, suspended or withdrawn, and (viii) that all
outstanding Bonds not repurchased on or prior to the effective date will be redeemed on such effective
date except Bonds with respect to which the Owner has directed the Issuer not to redeem the same in
accordance with the Indenture.
THE AGREEMENT
Loan Payments
As Loan Payments, 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; provided,
however, that the obligation of the Company to make any such Loan Payment will be deemed to be
satisfied and discharged to the extent of the corresponding payment made (i) by the Bank to the Trustee
under the Letter of Credit or (ii) by the Obligor on the Alternate Credit Facility to the Trustee under the
Alternate Credit Facility.
From the date of the original issuance of the Bonds to and including the Interest Payment Date next
preceding the date of expiration or earlier termination of the Letter of Credit (or an Alternate Credit
Facility, as the case may be), the Company will provide for the payment of the principal of the Bonds,
upon redemption or acceleration, and interest on the Bonds when due, by the delivery of the Letter of
Credit (or an Alternate Credit Facility, as the case may be) to the Trustee. The Trustee will be directed to
draw moneys under the Letter of Credit (or an Alternate Credit Facility, as the case may be), in
accordance with the provisions of the Indenture and the Letter of Credit (or an Alternate Credit Facility,
as the case may be), to the extent necessary to pay the principal of, premium, if any (if covered by such
Letter of Credit or Alternate Credit Facility, as the case may be), and interest on the Bonds if and when
15
due. The initial Letter of Credit does not provide for drawings in respect of amounts of such redemption
premium.
Payments to Trustee.
The Company will pay to the Trustee amounts equal to the amounts to be paid by the Trustee
pursuant to the Indenture for the purchase of outstanding Bonds, such amounts to be paid by the
Company to the Trustee on the dates such payments are to be made; provided, however, that the
obligation of the Company to make any such payment under the Agreement shall be reduced by the
amount of any moneys available for such payments, including proceeds from the remarketing of the
Bonds or moneys drawn under the Letter of Credit (or an Alternate Credit Facility, as the case may be).
From the date of the original issuance of the Bonds to and including the Interest Payment Date next
preceding the date of the expiration or earlier termination of the Letter of Credit (or an Alternate Credit
Facility, as the case may be), the Company will provide for the payment of the amounts to be paid by the
Trustee for the purchase of Bonds by the delivery of the Letter of Credit (or an Alternate Credit Facility,
as the case may be) to the Trustee. The Trustee will be directed to draw moneys under the Letter of
Credit (Or an Alternate Credit Facility, as the case may be), in accordance with the provisions of the
Indenture and the Letter of Credit (or an Alternate Credit Facility, as the case may be), to the extent
necessary for the purchase of Bonds.
Obligation Absolute
The Company's obligation to make Loan Payments and payments to the Trustee for the purchase of
Bonds is absolute, irrevocable and unconditional and will not be subject to any defense other than
payment or to any right of setoff, counterclaim or recoupment arising out of any breach by the Issuer, the
Bank (or Obligor on the Alternate Credit Facility), the Trustee or the Remarketing Agent of any obligation
to the Company.
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, 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 will not take, or permit to be taken on its behalf, any action which
would cause the interest on the Bonds to become includible in the gross income of Owners of the Bonds
for purposes of federal income taxation and will take, or require to be taken, such action as may, from
time to time, be required under applicable law or regulation to continue to cause the interest on the Bonds
not to be includible in the gross income of the Owners thereof for purposes of federal income taxation.
See "TAX EXEMPTION."
Assignment; Merger
With the consent of the Bank (or the Obligor on the Alternate Credit Facility, as the case may be),
the Company's interest in the 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) cause the interest payable on the
Bonds (other than Bonds held by a "substantial user" or "related person" within the meaning of Section
183(b) (13) of the 1954 Code) to become includible in the gross income of the Owners thereof for
purposes of federal income taxation or (b) relieve (other than as described in the next succeeding
paragraph) the Company from primary liability for its obligations to make the Loan Payments or to make
payments to the Trustee with respect to the purchase of the Bonds or for any other of its obligations
under the Agreement; and subject further to the condition that the Company shall have delivered to the
Trustee and the Bank (or the Obligor on the Alternate Credit Facility, as the case may be) an opinion of
counsel to the Company that such assignment complies with the provisions of this paragraph. The
Company shall, within 30 days after the delivery thereof, furnish to the Issuer, the Bank (or Obligor on the
Alternate Credit Facility, as the case may be) and the Trustee a true and complete copy of the
agreements or other documents effectuating any such assignment.
The Company also may (a) consolidate with or merge 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 Utah as a foreign corporation or incorporated and existing under the laws of the State of Utah,
which as a result of the transaction shall assume (either by operation of law or in writing) all of the
obligations of the Company under the Agreement; 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 Agreement and the 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 Agreement.
Defaults
Each of the following events will constitute an "Event of Default" under the Agreement:
(a)a failure by the Company to make when due any Loan Payment or any payment required to
be made to the Trustee for the purchase of Bonds, which failure shall have resulted in an "Evérit of
Default" as described herein in paragraph (a), (b) or (C) under "Ti-ti INDENTURE - Defaults";
(b)a failure by the Company to pay when due any other amount required to be paid under the
Agreement or to observe and perform any other covenant, condition or agreement on the Company's
part to be observed or performed (other than a failure described in clause (a) above), which failure
continues for a period of 60 days (or such longer period as the Trustee and the Bank (or the Obligor
on the Alternate Credit Facility, as the case may be) may agree to in writing) after written notice
given to the Company and the Bank (or the Obligor on the Alternate Credit Facility, as the case may
be) by the Trustee or to the Company, the Trustee and the Bank (or the Obligor on the Alternate
Credit Facility, as the case may be) 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 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, 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 Agreement (other than its obligations to make when due Loan Payments and payments to the
Remarketing Agent or the Trustee for the purchase of Bonds and its obligation to maintain its existence),
the Company shall not be deemed in default by reason of not carrying out such agreement or performing
such obligation 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.
Any waiver 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
17
Agreement and a rescission and annulment of the consequences thereof. See the caption "THE INDENTURE
- Defaults."
Upon the occurrence and continuance of any Event of Default under the 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
enforce performance and observance of any obligation, agreement or covenant of the Company under
the Agreement.
Any amounts collected upon an Event of Default under the Agreement will be applied in accordance
with the Indenture.
Amendments
The Agreement may be amended subject to the limitations contained in the Agreement and in the
Indenture. See the caption "THE INDENTURE - Amendment of the Agreement."
THE INDENTURE
Pledge and Security
Pursuant to 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. The Issuer will also pledge and assign to the Trustee all its rights and interests under the
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 will have a prior claim on the Bond
Fund for the payment of its compensation and expenses and for the repayment of any advances (plus
interest thereon) made by it to effect performance of certain covenants in the Indenture (except that the
Trustee will not have such priority with respect to amounts deposited in the Bond Fund from amounts
drawn under the Letter of Credit or Alternate Credit Facility).
Application of the Bond Fund
There is created under the Indenture a Bond Fund and therein established a Principal Account and
an Interest Account Loan Payments, amounts drawn by the Trustee under the Letter of Credit (or an
Alternate Credit Facility, as the case may be) for payment of the principal of, premium, if any, and
interest on, the Bonds when due, 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 certificate and agreement among the Trustee, the Issuer and the Company, 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 when due, or, in some circumstances, for payment of the purchase price of the Bonds, subject
to the prior claim of the Trustee to the extent described in "THE INDENTURE - Pledge and Security."
Funds for the payment of the principal of, and premium, if any, and interest on, the Bonds shall be
derived from the following sources in the order of priority indicated:
(a)Available Moneys;
(b)moneys drawn under the Letter of Credit or an Alternate Credit Facility, as the case may be;
(C) any other moneys paid by the Company pursuant to the Agreement or any other moneys in
the Bond Fund.
Investment of Funds
Moneys in the Bond Fund will, at the direction of the Company, be invested in securities or
obligations specified in the Indenture, provided, however, that during the term of the Letter of Credit (or
1E]
an Alternate Credit Facility, as the case may be) moneys drawn under the Letter of Credit (or an
Alternate Credit Facility, as the case may be) shall be invested by the Trustee only in Government
Obligations (as defined in the Indenture) with a term not exceeding 30 days. All income or other gain
from such investments will be credited, and any loss will be charged, to the particular fund or account
from which the investments were made.
FIjfl
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 (other than Bonds
pledged to the Bank (the "Pledged 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 (other than Pledged Bonds)
for a period of five days after such interest has become due and payable;
(C) a failure to pay amounts due to Owners of the Bonds who have delivered Bonds to the
Trustee for purchase for a period of five days after such payment has become due and payable;
(d)the Trustee's receipt of notice from the Bank not later than the ninth Business Day following
a drawing under the Letter of Credit to pay interest on the Bonds that the Bank has not been
reimbursed for such drawing;
(e)the Trustee's receipt of notice from the Bank (or the Obligor on the Alternate Credit Facility,
as the case may be) of an "Event of Default" under and as defined in the Reimbursement
Agreement (which may be caused by the failure of the Company to comply with any of its covenants
and obligations thereunder);
(t) 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 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; or
(g) an "Event of Default" under the Agreement.
Remedies
(i) Upon the occurrence (without waiver or cure) of an Event of Default described in clause (a),
(b) or (c) of the preceding paragraph or an Event of Default described in clause (g) of the preceding
paragraph resulting from an "Event of Default" under the Agreement as described under clause (a) or
(c) of "THE AGREEMENT - Defaults" herein, the Trustee may (and upon the written request of the
Owners of not less than 25% in principal amount of the Bonds then outstanding the Trustee must), or (ii)
upon the occurrence (without waiver or cure) of an Event of Default described in clause (d) or (e) of
the preceding paragraph, the Trustee must, by written notice to the Issuer, the Company and the Bank
(or the Obligor on the Alternate Credit Facility, as the case may be), declare the Bonds to be
immediately due and payable, whereupon they shall, without further action, become and be immediately
due and payable and, during the period the Letter of Credit (or an Alternate Credit Facility, as the case
may be) is in effect, with accrued interest on the Bonds payable on the Bond Payment Date (as defined
in the Indenture) established by the Trustee pursuant to the indenture, anything in the Indenture or in the
Bonds to the contrary notwithstanding, and the Trustee shall give notice thereof to the issuer, the
19
Company and the Bank (or the Obligor on the Alternate Credit Facility, as the case may be) and shall
give notice by first-class mail thereof to Owners of the Bonds, and the Trustee shall as promptly as
practicable draw moneys under the Letter of Credit or an Alternate Credit Facility, as the case may be, to
the extent available thereunder, in an amount sufficient to pay principal of and accrued interest on the
Bonds payable on the Bond Payment Date.
The provisions described in the preceding paragraph are subject to the condition that if, so long as
no Letter of Credit or Alternate Credit Facility is outstanding, 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 all 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, at the rate per annum specified in the Bonds) and such amount as shall be
sufficient to cover reasonable compensation and reimbursement of expenses payable 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; but no such waiver,
rescission and annulment shall extend to or affect any subsequent Event of Default or impair any right or
remedy consequent thereon.
The provisions of the second preceding paragraph are, further, subject to the condition that, if an
Event of Default described in clause (d) or (e) of "THE INDENTURE - Defaults" shall have occurred and if
the Trustee shall thereafter have received written notice from the Bank (or the Obligor on the Alternate
Credit Facility, as the case may be) (x) that the notice which caused such Event of Default to occur has
been withdrawn and (y) that the amounts available to be drawn on the Letter of Credit (or the Alternate
Credit Facility, as the case may be) to pay (i) the principal of the Bonds or the portion of purchase price
equal to principal and (ii) interest on the Bonds and the portion of purchase price equal to accrued
interest have been reinstated to an amount equal to the principal amount of the Bonds outstanding plus
accrued interest thereon for the applicable Interest Coverage Period at the Interest Coverage Rate, then,
in every such case, such Event of Default shall be deemed waived and its consequences rescinded and
annulled, and the Trustee shall promptly give written notice of such waiver, rescission and annulment to
the Issuer, the Bank (or the Obligor on the Alternate Credit Facility, as the case may be), the Company
and the Remarketing Agent, and shall give notice thereof to all Owners of the outstanding Bonds (if such
Owners were notified of the acceleration) by first-class mail; but no such waiver, rescission and
annulment shall extend to or affect any subsequent Event of Default or impair any right or remedy
consequent thereon.
Upon the occurrence and continuance of any Event of Default under the Indenture, the Trustee may.
and upon the written request of the Owners of not less than 25% in principal amount of the Bonds
outstanding and receipt of indemnity to its satisfaction must, pursue any available remedy to enforce the
rights of the Owners of the Bonds and require the Company, the Issuer or the Bank (or the Obligor on the
Alternate Credit Facility, as the case may be) to carry Out its 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.
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 make certain payments with
respect to the Bonds and to draw on the Letter of Credit (or Alternate Credit Facility, as the case 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 under the Indenture or exercising any
20
trust or power conferred on the Trustee upon furnishing satisfactory indemnity to the Trustee and
provided that such direction shall not result in any personal liability of the Trustee.
No Owner of any Bond will have any right to institute suit to execute 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 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 the Owner of any Bond to receive
payment of the principal of, premium, if any, and interest on his 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 the, Bonds.
Acceleration of Bonds Upon Bankruptcy of the Company. As described above, certain events of
bankruptcy relating to the Company constitute events of default under the Agreement and the Indenture
permitting (or, at the request of the Owners of the Bonds as described above, requiring) the Trustee to
accelerate the Bonds and draw upon the Letter of Credit to pay principal of and interest on the Bonds. In
October 1990, in the case of In Re Prime Motor Inns, Inc. a United States Bankruptcy Court for the
Southern District of Florida granted a preliminary injunction against such an acceleration under provisions
substantially similar to those contained in the Indenture and the Agreement. The court held that the
acceleration of bonds based solely on the filing of bankruptcy petitions was prohibited by the United
States Bankruptcy Code and enjoined the bond trustee from disbursing to bondowners amounts drawn
under various letters of credit issued to secure a number of industrial development bond issues. The
decision of the court In Re Prime Motor Inns, Inc., could adversely affect the ability of the Trustee to
accelerate the Bonds upon the bankruptcy of the Company, at least in the absence of some other default
by the Company. However, the decision would not affect the ability of the Trustee to draw upon the
Letter of Credit to pay the principal of or purchase price and interest on the Bonds as the same otherwise
became due and payable.
Defeasance
All or any portions of Bonds (in Authorized Denominations) shalt, 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 drawn under the Letter of Credit or an Alternate Credit Facility;
(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) on said Bonds or portions thereof on and prior to the redemption date or maturity date
thereof, as the case may be;
(d)in the event said Bonds or portions thereof do not mature and are not to be redeemed
within the next succeeding 30 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 portions thereof 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 interest on said Bonds or portions thereof;
(e)the Trustee shall have received 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, that such action will not result in a
21
reduction, suspension or withdrawal of the rating on the Bonds by Moody's or S&P, as the case may
(f)the Trustee, Moody's, if the Bonds are then rated by Moody's, and S & P, if the Bonds are
then rated by S & P, 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;
(g)the Trustee, Moody's, if the Bonds are then rated by Moody's, and S & P. if the Bonds are
then rated by S & P, shall have received an opinion of Bond Counsel to the effect that such deposit
will not adversely affect the exclusion of interest on the Bonds from gross income for purposes of
federal income taxation ("Bond Counsel's Opinion"); and
(h)the Trustee, Moody's, if the Bonds are then rated by Moody's, and S & P, if the Bonds are
then rated by S & P, shall have received an unqualified opinion of counsel experienced in bankruptcy
matters, selected by the Company ("Bankruptcy Counsel's Opinion"), to the effect that the
payment of the Bonds from the amounts so deposited would not result in 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.
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 and interest on said
Bonds or portions 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 redemption of the Bonds in connection with the expiration of the term of the
Letter of Credit (or the Alternate Credit 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
for redemption 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, 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 ) Available Moneys or moneys drawn under the Letter of Credit or an
Alternate Credit Facility, as the case may be, sufficient to make such payment and/or (2) Government
Obligations purchased with Available Moneys or moneys drawn under the Letter of Credit or an Alternate
Credit Facility, as the case may be, 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, (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, a Bankruptcy Counsel's Opinion, to the effect that the payment
of the Bonds from the moneys and/or Government Obligations so deposited will not result in a voidable
22
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, and a Bond Counsel's
Opinion shall have been delivered to the Trustee. 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 caption
• 'THE BONDS - Purchase of Bonds" 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 of Trustee
With the prior written consent of the Bank (which consent, if unreasonably withheld, shall not be
required), the Trustee may be removed at any time by filing with the Trustee so removed, and with the
Issuer, the Company, the Registrar, the Remarketing Agent and the Bank (or the Obligor on the Alternate
Credit Facility, as the case may be), an instrument or instruments in writing executed by the Owners of
not less than a majority in principal amount of the Bonds then Outstanding. The Trustee may also be
removed by the Issuer under certain circumstances.
Modifications and Amendments
The Indenture may be modified or amended by supplemental indentures without the consent of or
notice to 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 under the Indenture or to surrender any right or power reserved or conferred upon the Issuer
which shall . not 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 Trust Indenture Act of 1939, as amended; (e) to modify, alter, amend or
supplement the Indenture in any other respect which in the judgment of the Trustee is not adverse to the
Owners of the Bonds; (f) to implement a conversion of an interest rate or to evidence or give effect to or
facilitate the delivery and administration under the Indenture of an Alternate Credit Facility or a Substitute
Letter of Credit; (g) to provide for a depositary to accept tendered Bonds in lieu of the Trustee; (h) 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 cause interest on the Bonds to become
includible in the gross income of the Owners thereof for purposes of federal income taxation; (i) to
secure or maintain a rating for the Bonds in both the highest short-term or commercial paper debt Rating
Category (as defined in the Indenture) and in either of the two highest long-term debt Rating Categories;
and (j) to provide demand purchase obligations to cause the Bonds to be authorized purchases for
investment companies.
Except for supplemental indentures entered into for the purposes described in the preceding
paragraph, the Indenture will not be modified or amended without the consent of the Owners of not less
than 60% in aggregate principal amount of Bonds outstanding, who shall have the right to consent to and
23
approve any supplemental indenture; provided that, unless approved in writing by 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, 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 lien on or a pledge of the receipts and revenues of
the Issuer under the Agreement ranking prior to or on a parity with the 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 Agreement. No amendment of the Indenture shall be effective without the prior written
consent of the Company and the Bank (or the Obligor on the Alternate Credit Facility, as the case may
be).
Amendment of the Agreement
Without the consent of or notice to the Owners of the Bonds, the Issuer may amend the Agreement,
and the Trustee may consent thereto, as may be required (a) by the provisions of the 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 is not materially adverse to the Owners of the
Bonds or (d) to secure or maintain a rating for the Bonds in both the highest short-term or commercial
paper debt Rating Category and in either of the two highest long-term debt Rating Categories. The Issuer
and the Trustee will not consent to any other amendment of the Agreement without the written approval
or consent of the Bank (or the Obligor on the Alternate Credit Facility, as the case may be) 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
Agreement will become effective without the prior written consent of the Bank (or the Obligor on the
Alternate Credit Facility, as the case may be) and the Company.
UNDERWRITING
Goldman, Sachs & Co., as Underwriter, has agreed to purchase the Bonds from the Issuer thereof at
a purchase price of 100% of the principal amount thereof. The Underwriter is committed to purchase all of
the Bonds if any are purchased. The Company has agreed to pay the Underwriter an aggregate lee of
$168,750 and indemnify the Underwriter against certain liabilities, including liabilities under the federal
securities laws. The Underwriter may offer and sell the Bonds to certain dealers (including dealers
depositing Bonds into investment trusts) and others at prices lower than the offering price stated on the
cover page hereof. After the initial public offering, the public offering price may be changed from time to
time by the Underwriter.
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 the 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 excludible from
gross income. Failure by the Company or the Issuer to comply with certain of such requirements could
cause interest on 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 the 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
24
Bond for any period during which such Bond is owned by a person who is a substantial user of the Project
or any person considered to be related to such person (within the meaning of Section 103(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 (because the Prior Bonds were issued prior
to August 8, 1986). 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 ("AMT") for corporations. The AMT is
levied for taxable years beginning after December 31, 1986 in addition to the corporate regular tax in
certain cases. The AMT, if any, depends upon the corporation's alternative minimum taxable income
("AMT]"), which is the corporation's taxable income with certain adjustments. One of the adjustment
items used in computing AMT1 of a corporation (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 AMTI (before such
adjustment item and the alternative tax net operating toss deduction). "Adjusted current earnings"
would include all tax exempt interest, including interest on the Bonds.
In rendering its opinion, Bond Counsel will rely upon a certificate of the Company relating to the
Project and the application of the proceeds of the Bonds and the proceeds of the Prior Bonds with
respect to certain material facts soley within the knowledge of the Company.
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 recipi-
ents 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 purchas-
ers of the Bonds should consult their tax advisors as to applicability of any such collateral consequences.
In the opinion of Bond Counsel, under existing laws of the State of Utah presently enacted and
construed, interest on the Bonds will be exempt from taxes imposed by the Utah Individual Income Tax
Act.
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 MATTERS
The validity of the Bonds will be passed upon by Chapman and Cutler, Bond Counsel, and the
Underwriter's obligation to purchase any issue of the Bonds is subject to the issuance of Bond Counsel's
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, for the Underwriter by Winthrop, Stimson, Putnam &
Roberts, as Counsel to the Underwriter, and for the Issuer by Jones, Waldo, Holbrook & McDonough, as
Special Counsel for the Issuer. The validity of the Letter of Credit will be passed upon for the Bank by its
counsel, Milbank, Tweed, Hadley & McCIoy and Dr. Dieter C. Hauser.
Chapman and Cutler has represented other parties in matters involving subsidiaries of the Company
where legal fees of Chapman and Cutler have been paid by such subsidiaries. Jones, Waldo, Holbrook &
McDonough represents the Company, the Utah Power & Light Company Division of the Company, and
First National Bank of Chicago on matters unrelated to the Bonds. The firm served as bond counsel for
the Prior Bonds.
25
MISCELLANEOUS
The attached Appendices are an integral part of this Official Statement and must be mad together
with all of the balance of this Official Statement.
EMERY COUNTY, UTAH
By 10, 1
Chair, Board
of County Commissioners
[This page intentionally left blank.]
[This page intentionally left blank.]
PACIFICORP
PaciflCorp, an Oregon corporation (the "Company"), is a diversified electric utility that conducts its
retail electric utility business as Pacific Power & Light Company ("Pacific Power") and Utah Power &
Light Company ("Utah Power"), and engages in power production and sates on a wholesale basis under
the name PacifiCorp Electric Operations. The Company is the indirect owner, through Inner PacifiCorp,
Inc., a wholly owned subsidiary, of approximately 82% of NERCO, Inc. ("NERCO"), 87% of Pacific
Telecom, Inc. ("Pacific Telecom") and 100% of PacifiCorp Financial Services, Inc. ("PacifiCorp Financial
Services").
Pacific Power furnishes electric service in portions of six western states: Oregon. Wyoming,
Washington, Idaho, California and Montana. Utah Power furnishes electric service in portions of three
western states: Utah, Wyoming and Idaho. NERCO is a natural resource company that is one of the
largest producers of coal, gold and silver in North America, a significant producer of gas and oil in the Gulf
Coast region of the United States and is also engaged in the exploration for and development of precious
metals, gas and oil. Pacific Telecom, through its subsidiaries, provides local telephone service and
access to the long distance network in Alaska, seven other western states, Wisconsin and Iowa, provides
intrastate and interstate long distance communication services in Alaska, provides cellular mobile
telephone services, and is engaged in the construction of and sales of capacity in a submarine fiber optic
cable between the United States and Japan. PacifiCorp Financial Services is a business offering certain
specialized financial services, including aviation financing, computer leasing, tax advantaged investments
and business development financing.
The principal executive offices of the Company are located at 700 N.E. Multnomah, Suite 1600,
Portland, Oregon 97232-4116; the telephone number is [phone].
AVAILABLE 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. Such reports, proxy statements and other information may be inspected and
copied at the offices of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549; 75 Park
Place, 14th Floor, New York, New York 10007; and 230 South Dearborn Street, Chicago, Illinois 60604.
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, at prescribed rates. Reports, proxy material and other
information concerning the Company may also be inspected at the New York and Pacific Stock
Exchanges.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and Exchange Commission are
incorporated in this Appendix by reference:
(a)Annual Report on Form 10-K for the year ended December 31, 1990 (as amended by
Form 8 dated April 29, 1991).
(b)Quarterly Report on Form 10-0 for the quarter ended March 31. 1991.
(C) Current Reports on Form 8-K dated March 12, March 13 and March 18, 1991.
All reports filed 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 Appendix A and to be a part hereof from the date
of filing such documents.
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
A-I
documents referred to above which have been or may be incorporated herein by reference, other than
exhibits to such documents. Requests for such copies should be directed to Corporate Shareholder
Services, PaciflCorp, 700 N.E. Multnomah, Suite 700, Portland, Oregon 97232-4107. The telephone
number is [phone].
The following selected financial information for each of the three years in the period ended
December 31, 1990 has been derived from the consolidated financial statements of the Company for the
respective years in that three-year period. The consolidated financial statements have been audited by
Deloitte & Touche, independent public accountants, and the reports of Deloitte & Touche (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 documents incorporated herein by reference.
SELECTED FINANCIAL INFORMATION
(Dollars in Millions)
'tsar Ended December 31
1990 1989 1988
Income Statement Data
Revenues(a) ........................................... $3,828.0 $3,628.4 $3,520.4
Expenses(b) .......................................... 2,739.7 2,595.0 2,475.5
Income from Operations .................................. 1,088.3 1,033.4 1044.9
Interest Expense, Income Taxes
and Other .......................................... 614.4 567.8 598.2
Net Income ........................................... $ 473.9 $ 465.6 $ 446.7
CommonEquity .......................................
Preferred Stock .......................................
Preferred Stock Subject to Mandatory Redemption
Long Term Debt and Capital Lease
Obligations .........................................
PacifiCo!p Financial Services
Long Term Debt.....................................
Total.............................................
$3,207.8 $3,006.6 $2,935.9
342.4 242.4 246.3
50.0 50.0 56.3
3,978.6 3,539.0 3,441.0
693.0 855.6 906.0
$8,271.8 $7,693.6 $7,585.5
(a)Certain amounts from prior years have been reclassified to conform with the presentation in the
Company's Quarterly Report on Form 1 0-Q for the quarter ended March 31, 1991. The reclassifica-
tions had no effect on previously reported consolidated net income.
(b)Includes interest expense of PacifiCorp Financial Services.
The information contained and incorporated by reference In this Appendix A to the Official
Statement has been obtained from the Company. The Issuer and the Underwriter make no
representation as to the accuracy or completeness of such information.
APPENDIX B
Crdit Suisse
Founded in 1856, Credit Suisse is a universal bank which maintains its corporate headquarters in
Zurich, Switzerland. In 1989, Credit Suisse became a subsidiary of CS Holding as a result of a share
exchange transaction. With $5.8 billion in capital and reserves, Credit Suisse is among the most highly
capitalized banks in the world. Credit Suisse is engaged in all banking activities and its international
network operations are conducted through over 73 branches, representative offices and affiliates
throughout the world. Banking operations in the United States began in 1940 and currently include
branches in New York and Los Angeles, an agency in Miami and offices in San Francisco, Atlanta,
Chicago and Houston. Credit Suisse is a globally active full-service bank.
Credit Suisse's principal office is at Paradeplatz 8, 8001, Zurich, Switzerland, its New York Branch is
at 100 Wall Street, New York, NY 10005, and its Los Angeles Branch is at 800 Wilshire Boulevard, Los
Angeles, California 90017.
Swiss accounting principles applicable to Swiss banks are to a large extent embodied in the Swiss
law. Among Swiss banks it is common practice that fixed assets (including real estate), which are
carried at cost net of accumulated depreciation, are depreciated faster than the life of the asset would
normally require. Also, Swiss law requires that the maximum balance sheet value of marketable securities
be their cost, but in fact these securities are often carried at values below such maximum amounts as
there are no minimum valuations required by law. The published financial statements of Credit Suisse are
now consolidated for the first time. CS Holding, which was originally a sister company of Credit Suisse,
became the central holding company and parent company of the entire Credit Suisse Group during the
course of 1989.
SELECTED INFORMATION OF CREDIT SUISSE(a)
(BANK ONLY)
Yew Ended Dsombsr 31
ieee tees ieee
(mimosa at dollars)
Operating Income ........................................... $ 828 $ 1,097 $ 907
Net Income ................................................. 362 551 455
Total Assets ................................................ 96,744 90,513 87,218
Liquid Assets(b) ............................................. 25,464 23,380 28,455
Loans(c) .................................................. 59,974 54,229 45,820
Total Deposits and Due to Banks.............................. 63,471 58,903 55,569
Total Capital and Reserves ................................... 5,878 5,819 5,536
(a)The figures originally expressed in Swiss francs, have been converted into U.S. dollars at the rate of
$0.77 for 1 Swiss franc prevailing at December 31, 1990. The conversion rate prevailing on May 14,
1991 was $0.70 for 1 Swiss franc. These figures represent the bank operation only.
(b)Liquid assets consist of cash, due from banks (sight and time) and bills discounted and money
market paper.
(c)Loans include advances in current accounts, time loans and others.
Credit Suisse's auditors are Swiss Auditing Company
The information relating to Credit Suisse contained above has been furnished by Credit Suisse. No
representation is made herein as to the absence of material adverse changes in the information contained
in this Appendix B subsequent to the date of this Official Statement. A copy of the Annual Report of
Credit Suisse may be obtained tree of charge from Credit Suisse, by anyone to whom this Official
Statement is furnished, at its Los Angeles branch by writing to Credit Suisse at 800 Wilshire Boulevard,
Suite 888, Los Angeles, California 90017-2685 or by calling [phone] or at its New York Branch
by writing to Credit Suisse at 100 Wall Street, New York, New York 10005 or by calling [phone].
B-i
[This page intentionally left blank.]
I -
APPENDIX C -
- ALTERNATIVE INTEREST RATES
The following is a description of the interest rate and purchase provisions of the Bonds while the
Bonds bear a Daily Interest Rate, aWeekly Interest Rate, a Monthly Interest Rate, or a Term Interest Rate.
The method by which the interest rate on the Bonds is determined can be changed as described in the
Official Statement under "CONVERSION OF RATE." -
Interest Provisions -
Daily interest Rate. With respect to each day the Bonds are to bear a Daily Interest Rate, the Daily
Interest Rate shalt be determined by the Remarketing Agent to be the interest rate which, in the judgment
of the Remarketing Agent, when borne by the Bonds would be the minimum interest rate necessary to
enable the Remarketing Agent to sell the Bonds on such date at 100% of the principal amount thereof
plus accrued interest, if any; provided, however, that with respect to any day that is not a Business Day,
the Daily Interest Rate shall be the same rate as the Daily Interest Rate established for the immediately
preceding Business Day unless the Remarketing Agent is open for business on such non-Business Day
and determines a rate for such non-Business Day, in which case the Bonds shall bear interest at the rate
- 80 determined. On the basis of such Daily Interest Rates, the Trustee shall calculate the amount of
interest payable during each Interest Period on the Bonds bearing interest at a Daily Interest Rate.
Weekly Interest Rate. With respect to each week the Bonds are to bear interest at a Weekly Interest
Rate, the Weekly Interest Rate on the Bonds shall be determined by the Remarketing Agent on Tuesday
(or the next succeeding Business Day, if such Tuesday is not a Business Day) of each week to be the
interest rate which, on the following day, in the judgment of the Remarketing Agent, when borne by the
Bonds would be the minimum interest rate necessary to enable the Remarketing Agent to sell the Bonds
on such date at 100% of the principal amount thereof plus accrued interest, if any.
Monthly Interest Rate. With respect to each Interest Period the Bonds are to bear interest at a
Monthly Interest Rate, the Monthly Interest Rate shall be determined on the first Business Day of such
Interest Period by the Remarketing Agent to be that rate which would be the minimum interest rate
necessary to enable the Remarketing Agent to sell the Bonds on the first day of such Interest Period at
100% of the principal amount thereof.
Term Interest Rate. - With respect to each Term Period the Bonds are to bear interest at a Term
Interest Rate, the Term Interest Rate shall be determined by the Remarketing Agent on the Business Day
next preceding the first day of a Term Period which shall be the rate which would be the minimum interest
rate necessary to enable the Remarketing Agent to sell all of the Bonds on the first day of such Term
Period at 100% of the principal amount thereof. "Term Period" means the period, which generally must
be an integral multiple of six months, specified as such by the Company upon a conversion of the interest
rate on the Bonds to a Term Interest Rate.
Promptly after the determination of each Term Interest Rate, the Trustee shall mail a notice by first-
class mail to each Owner of a Bond, at the address shown on the registration books of the Issuer
maintained by the Registrar, advising such Owner of such Term Interest Rate and of the Term Period for
which such Term Interest Rate will be in effect. Failure by the Trustee to give any such notice by mailing,
or any defect therein, shall not affect the Term Interest Rate to be borne by the Bonds in any Term Period.
General. In the event the Remarketing Agent fails for any reason to establish any Flexible Rate,
Daily Interest Rate, Weekly Interest Rate, Monthly Interest Rate, or Term Interest Rate required to be
established under the provisions of the Indenture, the most recently established Flexible Rate, Daily
Interest Rate, Weekly Interest Rate, Monthly Interest Rate or Term Interest Rate, as the case may be, shall
continue in effect until a new applicable interest rate is established.
Purchase Provisions
Purchase on Demand of Owner While Bonds Bear Daily Interest Rate.
While the Bonds bear interest at a Daily Interest Rate, any Bond shall be purchased on the demand
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 Remarketing Agent
c-i
at its principal office, by no later than 9:30 a.m., New York, New York time, on such Business Day, of a
written notice or a telephonic notice, promptly confirmed by tested telex, which states the principal
amount of such Bond to be purchased and the date on which the same shall be purchased pursuant to
this paragraph, and (B) delivery of such Bond (with all necessary endorsements) to the New York
delivery office of the Trustee, at or prior to 9:30 a.m., New York, New York time, on the date specified in
such notice.
Purchase on Demand of Owner While Bonds Bear Weekly Interest Rate.
While the Bonds bear interest at a Weekly Interest Rate, any Bond shall be purchased, on the
demand of the Owner thereof, on any Wednesday at a purchase price equal to 100%. of the principal
amount thereof plus accrued interest, if any, to the date of purchase, upon: (i) delivery to the principal
office of the Remarketing Agent of a telephonic notice (unless the Trustee shall be serving as
Remarketing Agent, in which case written notice delivered to the New York delivery office of the Trustee
shall be required) by 10:00 a.m., New York, New York time, on the seventh day preceding such
Wednesday, which states the aggregate principal amount thereof; (ii) delivery of such Bond (with all
necessary endorsements) and, in the case of a Bond to be purchased prior to the Interest Payment Date
for any Interest Period and after the Record Date in respect thereto, a due-bill, in form satisfactory to the
Trustee, at the New York delivery office of the Trustee at or prior to 10:00 a.m., New York, New York time,
on such Wednesday; provided, however, that such Bond shall be so purchased only if the Bond so
delivered to the Trustee shall conform in all respects to the description thereof in the aforesaid notice. In
the event that Tuesday and Wednesday are not Business Days, the procedures described in this
paragraph to occur on either Tuesday or Wednesday, shall occur on the next succeeding Business Day.
An Owner who gives the notice set forth in clause (i) above may repurchase the Bonds so tendered with
such notice on such Wednesday if the Remarketing Agent agrees to sell the Bonds so tendered to such
Owner. If such Owner decides to repurchase such Bonds and the Remarketing Agent agrees to sell the
specified Bonds to such Owner prior to delivery of such Bonds as set forth in clause (ii) hereinabove, the
delivery requirement set forth in such clause (ii) shall be waived.
Purchase on Demand of Owner While Bonds Bear Monthly Interest Rate.
While the Bonds bear interest at a Monthly Interest Rate, any Bond shall be purchased, on the
demand of the Owner thereof, on any Interest Payment Date at a purchase price equal to 100% of. the
principal amount thereof, upon (1) delivery to the New York delivery office of the Trustee at or prior to
4:00 p.m.. New York, New York time, on the third Business Day prior to such Interest Payment Date of a
written notice which (i) states the aggregate principal amount of such Bond and (ii) states that such
Bond shall be purchased on such interest Payment Date pursuant to this paragraph; and (2) the delivery
of such Bond (with all necessary endorsements) at the New York delivery office of the Trustee at or prior
to 10:00 a.m., New York, New York time, on such Interest Payment Date; provided, however, that such
Bond shall be so purchased pursuant to this paragraph only if the Bond so delivered to the Trustee shall
conform in all respects to the description thereof in the aforesaid notice. An Owner who gives the notice
set forth in clause (1) hereinabove may repurchase the Bonds so tendered on such Interest Payment
Date it the Remarketing Agent agrees to sell the Bonds so tendered to such Owner. If such Owner
decides to repurchase such Bonds and the Remarketing Agent agrees to sell the specified Bonds to such
Owner prior to delivery of such Bonds as set forth in clause (2) hereinabove, the delivery requirement set
forth in such clause (2) shall be waived.
Purchase While Bonds Bear Term Interest Rate.
(a) While the Bonds bear interest at a Term Interest Rate, any Bond shall be purchased on the
day (which is not a Conversion Date) next succeeding the last day of any Term Period (a "Purchase
Date") at a purchase price equal to 100% of the principal amount thereof unless the Owner of the
Bond delivers a completed Owner Election Notice (as defined in the Indenture) to the New York
delivery office of the Trustee between the opening of business on the twenty-first day next preceding
the Purchase Date and the close of business on the seventh day next preceding the Purchase Date
(or if such twenty-first or seventh day is not a Business Day, the next succeeding Business Day).
The delivery of an Owner Election Notice by an Owner to retain his Bond is irrevocable and binding
on such Owner and cannot be withdrawn. The Trustee shall give the Remarketing Agent telephonic
notice, promptly confirmed in writing, specifying the principal amount of Bonds for which Owner
C-2
- •1 . - ,-. .,..
Election Notices have been received. Not later than the fifteenth day next preceding the Purchase
Date, the Trustee shall give notice by first-class malt to the Owners of the Bonds stating (i) the last
day of the Term Period, (ii) that the Bonds will be purchased on the Purchase Date unless the
Owner of the Bond delivers a completed Owner Election Notice (a copy of which shalt accompany
the notice from the Trustee) to the Trustee as provided in the Indenture between the opening of
business on the twenty-first day and the close of business on the seventh day next preceding the
Purchase Date (or if such seventh day is not a Business Day, the next succeeding Business Day)
and (iii) that after the Purchase Date the Bonds will bear interest at a Term Interest Rate for a Term
Period of the same duration as the then current Term Period.
If during any Term Period the Company fails to deliver to the Trustee a notice of conversion as
described under the caption "Cof.vERSloN OF RATE - Conversion to Term Interest Rate or Floating
Interest Rates," from and after the Purchase Date the Bonds shall bear interest at a Term Interest
Rate for a Term Period of the same duration as that ending on the day immediately preceding such
Purchase Date.
Any Owner of a Bond who does not deliver a completed Owner Election Notice as described
above must deliver such Bond (with any necessary endorsements) to the New York delivery office of
the Trustee, not later than 10:00 a.m., New York, New York time, on the Purchase Date.
Any Owner who delivers a completed Owner Election Notice as described above in order to
retain a portion of a Bond must deliver such Bond (with any necessary endorsements) to the New
York delivery office of the Trustee with such Owner Election Notice. If an Owner so elects to retain a
portion of a Bond, the Trustee shall, in accordance with the provisions of the Indenture, deliver to
such Owner a principal amount of Bonds of Authorized Denominations equal to the portion of the
Bond so retained.
(b) Bonds or portions thereof to be purchased as provided in paragraph (a) above which are
not delivered by the Owner thereof to the Trustee as above provided shall nonetheless be deemed to
have been delivered by the Owner thereof for purchase and to have been purchased, provided that
there have been irrevocably deposited with the Trustee moneys in accordance with the Indenture in
an amount sufficient to pay the purchase price of such Bonds. Thereafter, the Trustee shall
authenticate a new Bond as provided in the Indenture. Moneys deposited with the Trustee for
purchase of Bonds pursuant to the Indenture shalt be held in trust in a separate escrow account
without liability for interest thereon and shall be paid to the Owners of such Bonds upon presentation
thereof. The Trustee shall within five days after the Purchase Date give written notice to the
Company whether Bonds have not been delivered, and upon direction to do so by the Company the
Trustee shall give notice by first class mail to each Owner whose Bonds are deemed to have been
purchased pursuant to the Indenture, which notice shall state that interest on such Bonds ceased to
accrue on the Purchase Date and that moneys representing the purchase price of such Bonds are
available against delivery thereof at the New York delivery office of the Trustee. The Trustee shall
hold moneys deposited by the Company or drawn by the Trustee under the Letter of Credit or an
Alternate Credit Facility, as the case may be, for the purchase of Bonds as provided in the Indenture,
without liability for interest thereon, for the benefit of the former Owner of the Bond on such date of
purchase, who shalt thereafter be restricted exclusively to such moneys for any claim of whatever
nature on his part under the Indenture or on, or with respect to, such Bond. Any moneys so
deposited with and held by the Trustee not so applied to the payment of Bonds, within six months
after such date of purchase shall be paid by the Trustee to the Bank (or the Obligor on the Alternate
Credit Facility, as the case may be) to the extent of any amount payable under the Reimbursement
Agreement, and the balance shall be paid by the Trustee to the Company upon the written direction
of the Authorized Company Representative consented to in writing by the Bank (or the Obligor on
the Alternate Credit Facility, as the case may be), and thereafter the former Owners shall be entitled
to look only to the Company for payment, and then only to the extent of the amount so repaid to the
Bank (or the Obligor on the Alternate Credit Facility, as the case may be) and/or the Company, and
the Company shall not be liable for any interest thereon and shall not be regarded as a trustee of
such money.
C-3
[This page intentionally left blank.]
APPENDIX D
Upon the delivery of the Bonds, Chapman and Cutler, Bond Counsel, proposes to issue its final
approving opinion in substantially the following form:
Law Offices of
CHAPMAN AND CUTLER
a partnership including professional corporations
Theodore S. Chapman 50 South Main Street; Salt Lake City, Utah 84144 2 North Central Avenue
1877-1943 Phoenm Arizona $5004
Henry E. Cutlet FAX ($01) [phone]
18794959 Telephone (801) $33-0066
111 West Monroe Street
Chicep, Illinois 60603
[phone]
Re: $45,000,000 Pollution Control Revenue Refunding Bonds (PaciflCorp Project)
Series 1991 of Emery County, Utah
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 1991, in the aggregate principal amount of $45,000,000 (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 purposeof
refunding the Issuer's $45,000,000 Pollution Control Revenue Bonds, 11 1/4% Series due April 1, 2011
(Utah Power & Light Company Project) (the "Refunded Bonds"). The Refunded Bonds were issued for
the purpose of financing a portion of the cost of air and water pollution control and solid waste disposal
facilities (the "Project") at the Hunter generating plant (the "Station") 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 provided by the Company, have been deposited with the trustee for the
Refunded Bonds to provide for the payment of the Refunded Bonds.
The Bonds mature on duly 1, 2015, bear interest from time to time computed as set forth in each of
the Bonds and are subject to 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, only 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 May 1, 1991 (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
0-1
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 May 1, 1991
(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 Floating Interest Rates (as
defined in the Indenture) to be borne by the Bonds, which Floating Interest Rate may be a Daily Interest
Rate, a Weekly Interest Rate, a Monthly Interest Rate or Flexible Rates (each as defined in the
Indenture), and for the conversion of the interest rate borne by the Bonds to a different Floating Interest
Rate or to a Term Interest Rate under certain conditions. The Indenture provides that the Bonds bear
interest at Flexible Rates until conversion to a different Floating 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 Commission-
ers 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 Company's obligation to make payments to the Issuer under the Loan
Agreement, the Company has caused to be delivered to the Trustee an irrevocable Letter of Credit (the
"Letter of Credit") of Credit Suisse, Los Angeles Branch (the "Bank"), under which the Trustee is
permitted under certain conditions to draw up to (a) an amount equal to the principal of the outstanding
Bonds (i) to pay the principal of the Bonds when due upon redemption or acceleration or (ii) to enable
the Trustee 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 294 days'
accrued interest on the outstanding Bonds (I) to pay interest on the Bonds or (ii) to enable the Trustee
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. Delivery of the Letter of Credit, however, does not release the Company
from its payment obligation under the Loan Agreement. The stated expiration date of the Letter of Credit
is May 23, 1994, subject to the provisions of the Letter of Credit.
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,
except to the extent paid from moneys drawn by the Trustee under the Letter of Credit.
Subject to the condition that the Company and the Issuer 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 any person considered to be related to such person (within the meaning of Section
103(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 (because the
Refunded Bonds were issued prior to August 8, 1986). 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 Issuer and Company 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
D-2
no opinion regarding any such collateral consequences arising with respect to the Bonds. In rendering
this opinion we have retied upon a certificate 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 existing laws of the State of Utah presently enacted and construed, the
interest on the Bonds is exempt from taxes imposed by the Utah Individual Income Tax Act.
We are not passing upon the Letter of Credit or action taken by the Bank in connection therewith.
The validity of the Letter of Credit has been passed upon by Milbank, Tweed, Hadley & McCloy and Dr.
Dieter C. Hauser.
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 retied 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 execution by the Company of, the Loan Agreement, and (v) the binding effect
of the Loan Agreement on the Company.
Jones, Waldo, Holbrook & McDonough, special counsel to 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.
The opinions described above are in form satisfactory to us, both in scope and content.
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
D-3
APPENDIX D
PROPOSED FORM OPINION OF BOND COUNSEL
[LETTERHEAD OF CHAPMAN AND CUTLER LLPJ
[DATED THE CLOSING DATE]
The Bank of New York Mellon, PacifiCorp
Trust Company, N.A., 825 N.E. Multnomah Street,
as successor Trustee Suite 1900
2 North LaSalle Street, Suite 1020 Portland, Oregon 97232-4116
Chicago, Illinois 60602
Emery County, Utah JPMorgan Chase Bank, National Association
75 East Main 383 Madison Avenue
Castle Dale, Utah 84513 New York, New York 10179
Re: $45,000,000
Emery County, Utah
Pollution Control Revenue Refunding Bonds
(PacifiCorp Project) Series 1991 (the "Bonds")
Ladies and Gentlemen:
This opinion is being furnished in accordance with Section 4.03(b) of that certain Loan
Agreement, dated as of May 1, 1991 (the "Loan Agreement"), between Emery County, Utah (the
"Issuer") and PacifiCorp (the "Company"). Prior to the date hereof, payment of principal and
purchase price of and interest on the Bonds was secured by a credit facility issued by BNP
Paribas. On the date hereof, the Company desires to deliver a Letter of Credit (the "Letter of
Credit") to be issued by JPMorgan Chase Bank, National Association (the "Bank"), for the
benefit of the Trustee.
We have examined the law and such documents and matters as we have deemed
necessary to provide this opinion letter. As to questions of fact material to the opinions
expressed herein, we have relied upon the provisions of the Trust Indenture, dated as of May 1,
1991 (the "Indenture"), between the Issuer and The Bank of New York Mellon Trust Company,
N.A., as successor trustee (the "Trustee") and related documents, and upon representations,
including regarding the consent of the Owners, made to us without undertaking to verify the
same by independent investigation.
The terms used herein denoted by initial capitals and not otherwise defined shall have the
meanings specified in the Indenture.
D-1
Based upon the foregoing and as of the date hereof, we are of the opinion that:
1.The delivery of the Letter of Credit is authorized under the Loan
Agreement and complies with the terms of the Loan Agreement.
2.The delivery of the Letter of Credit, the validity under the Act of the
Bonds and will not cause interest on the Bonds to become includible in the gross income
of the owners thereof for federal income tax purposes.
At the time of the issuance of the Bonds, we rendered our approving opinion relating to,
among other things, the validity of the Bonds and the exclusion from federal income taxation of
interest on the Bonds. We have not been requested, nor have we undertaken, to make an
independent investigation to confirm that the Company and the Issuer have complied with the
provisions of the Indenture, the Loan Agreement, the Tax Certificate (as defined in the
Indenture) and other documents relating to the Bonds, or to review any other events that may
have occurred since such approving opinion was rendered other than with respect to the
Company in connection with other than with respect to the Company in connection with (a) the
adjustment of the interest rate on the Bonds described in our opinion dated February 28, 1996,
(b) the delivery of an Alternate Credit Facility, dated as of May 15, 2001, (c) delivery of the
Prior Letter of Credit, dated September 15, 2004 and (d) the delivery of the Letter of Credit
described herein. Accordingly, we do not express any opinion with respect to the Bonds, except
as described above.
Our opinion represents our legal judgment based upon our review of the law and the facts
that we deem relevant to render such opinion and is not a guarantee of a result. This opinion is
given as of the date hereof and we assume no obligation to review or supplement this opinion to
reflect any facts or circumstances that may hereafter come to our attention or any changes in law
that may hereafter occur.
In rendering this opinion as Bond Counsel, we are passing only upon those matters set
forth in this opinion and are not passing upon the adequacy, accuracy or completeness of any
information furnished to any person in connection with any offer or sale of the Bonds.
Respectfully submitted,
D-2
APPENDIX E
[FORM OF LETTER OF CREDIT]
IRREVOCABLE TRANSFERABLE LETTER OF CREDIT
April 18, 2012
U.S. $45,961,644.00
Letter of Credit No. CPCS-358995
CUSIP No. 291147 BW5
The Bank of New York Mellon Trust Company, N.A.,
as trustee (the "Trustee ") under the Trust Indenture
dated as of May 1, 1991 (the "Indenture"), between
Emery County, Utah (the "Issuer") and the Trustee
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention: Corporate Trust Department
Ladies and Gentlemen:
We hereby establish in your favor as Trustee for the benefit of the holders of the Bonds (as
hereinafter defined), our irrevocable transferable Letter of Credit No. CPCS-358995 for the
account of PacifiCorp, an Oregon corporation (the "Borrower"), whereby we hereby irrevocably
authorize you to draw on us from time to time, from and after the date hereof to and including
the earliest to occur of our close of business on: (i) April 18, 2013 (as extended from time to
time, the "Stated Expiration Date"), (ii) the earlier of (A) the date which is fifteen (15) days
following the date of conversion of the interest rate on all of the Bonds to a fixed interest rate
pursuant to Section 4.01 of the Indenture, as such date is specified in a certificate in the form of
Annex A hereto (the "Conversion Date ") or (B) the date on which the Bank honors a drawing
under the Letter of Credit on or after the Conversion Date, (iii) the date which is fifteen (15) days
following receipt from you of a certificate in the form set forth as Annex B hereto, (iv) the date
on which an Acceleration Drawing is honored by us, and (v) the date which is fifteen (15) days
following receipt by you of a written notice from us specifying the occurrence of an Event of
Default under the Reimbursement Agreement dated as of April 18, 2012, between the Borrower
and us (the "Reimbursement Agreement") and directing you to accelerate the Bonds (such
earliest date, the "Termination Date"), a maximum aggregate amount not exceeding forty-five
million nine hundred sixty-one thousand six hundred forty-four United States Dollars (U.S.
$45,961,644 - the "Original Stated Amount") to pay principal of and accrued interest on, or the
purchase price of, the U.S. $45,000,000 Pollution Control Revenue Refunding Bonds
(PacifiCorp Project) Series 1991 issued by the Issuer (the "Bonds"), in accordance with the
terms hereof (said U.S. $45,961,644 having been calculated to be equal to U.S. $45,000,000
(forty-five million U.S. Dollars), the original principal amount of the Bonds, plus U.S. $961,644
(nine hundred sixty-one thousand six hundred forty-four U.S. Dollars), which is 65 days' accrued
interest on said principal amount of the Bonds at the rate of twelve percent (12.0%) per annum
calculated on a 365-day basis (the "Cap Interest Rate")). This credit is available to you against
E-1
presentation of the following documents (the "Payment Documents") presented to JPMorgan
Chase Bank, N.A. (the "Issuing Bank") as described below:
A certificate (with all blanks appropriately completed) (i) in the form attached as Annex C hereto
to pay accrued interest on the Bonds as provided for under Section 6.04 of the Indenture (an
"Interest Drawing"), (ii) in the form attached as Annex D hereto to pay the principal amount of
and accrued interest on the Bonds in respect of any redemption of the Bonds as provided for in
Section 3.10, 3.11 or 3.12 of the Indenture (a "Redemption Drawing"), provided that in the event
the date of redemption or purchase coincides with an Interest Payment Date (as defined in the
Indenture) the Redemption Drawing shall not include any accrued interest on the Bonds (which
interest is payable pursuant to an Interest Drawing), (iii) in the form attached as Annex E hereto,
to allow J.P. Morgan Securities LLC, as Remarketing Agent (together with its permitted
successors and assigns, the "Remarketing Agent"), to pay the purchase price of Bonds tendered
for purchase as provided for in Section 3.01, 3.02, 3.03, 3.04, or 3.05 of the Indenture which
have not been successfully remarketed or for which the purchase price has not been received by
the Remarketing Agent by 10:00 A.M., New York, New York time, on the purchase date (a
"Liquidity Drawing"), provided that in the event the purchase date coincides with an Interest
Payment Date, the Liquidity Drawing shall not include any accrued interest on the Bonds (which
interest is payable pursuant to an Interest Drawing), (iv) in the form attached as Annex F hereto,
to pay the principal of and accrued interest in respect of Bonds the payment of which has been
accelerated pursuant to Section 9.02(a) of the Indenture (an "Acceleration Drawing"), or (v) in
the form attached as Annex G hereto to pay the principal amount of Bonds maturing on July 1,
2015 (a "Stated Maturity Drawing"), each certificate to state therein that it is given by your duly
authorized representative and dated the date such certificate is presented hereunder. No
drawings shall be made under this Letter of Credit for Pledged Bonds (as defined in the
Indenture) or Bonds registered in the name of the Company.
All drawings shall be made by presentation of each Payment Document by facsimile (at
facsimile number [phone] or alternately to [phone]), Attention: Standby Service
Unit, without further need of documentation, including the original of this Letter of Credit, it
being understood that each Payment Document so submitted is to be the sole operative
instrument of drawing.
We agree to honor and pay the amount of any Interest, Redemption, Liquidity, Acceleration or
Stated Maturity Drawing if presented in compliance with all of the terms of this Letter of Credit.
If such drawing, other than a Liquidity Drawing, is presented prior to 3:00 P.M., New York, New
York time, on a Business Day, payment shall be made to the account number or address
designated by you of the amount specified, in immediately available funds, by 10:00 A.M., New
York, New York time, on the following Business Day. If any such drawing, other than a
Liquidity Drawing, is presented at or after 3:00 P.M., New York, New York time, on a Business
Day, payment shall be made to the account number or address designated by you of the amount
specified, in immediately available funds, by 1:30 P.M., New York, New York time, on the
following Business Day. If a Liquidity Drawing is presented prior to 12:00 Noon, New York,
New York time, on a Business Day, payment shall be made to the account number or address
designated by you of the amount specified, in immediately available funds, by 2:00 P.M., New
York, New York time, on the same Business Day. If a Liquidity Drawing is presented at or after
12:00 Noon, New York, New York time, payment shall be made to the account number and at
such bank designated by you of the amount specified, in immediately available funds, by 10:00
A.M., New York, New York time, on the following Business Day. Payments made hereunder
E-2
shall be made by wire transfer to you or by deposit into your account with us in accordance with
the instructions specified by the Trustee in the drawing certificate relating to a particular drawing
hereunder. "Business Day" means any day other than a day on which banking institutions in the
city in which the principal corporate trust office of the Trustee or the principal corporate trust
office of the Tender Agent or the principal office of the Remarketing Agent (as defined in the
Indenture) is located, or the city where the office of the Issuing Bank where drawings are made
hereunder is located, are required or authorized by law to remain closed, or other than a day on
which the New York Stock Exchange is closed.
The Available Amount (as hereinafter defined) will be reduced automatically by the amount of
any drawing hereunder; provided, however, that the amount of any Interest Drawing hereunder
shall be automatically reinstated on the 9 th (ninth) Business Day after payment by us of such
drawing unless the Issuing Bank gives notice of an Event of Default under the Reimbursement
Agreement. After payment by us of a Liquidity Drawing, the obligation of the Issuing Bank to
honor drawings under this Letter of Credit will be automatically reduced by an amount equal to
the Original Purchase Price of any Bonds (or portions thereof) purchased pursuant to said
drawing. In addition, prior to the Conversion Date, in the event of the remarketing of the Bonds
(or portions thereof) previously purchased with the proceeds of a Liquidity Drawing, our
obligation to honor drawings hereunder shall be automatically reinstated concurrently upon
receipt by the Issuing Bank, or the Trustee on the Issuing Bank's behalf, of an amount equal to
the Original Purchase Price of such Bonds (or portion thereof) plus accrued interest thereon as
required under the Reimbursement Agreement as specified in a certificate in the form of Annex
L hereto (a "Reinstatement Certificate"); the amount of such reinstatement shall be equal to the
Original Purchase Price of such Bonds (or portions thereof). "Original Purchase Price" shall
mean the principal amount of any Bond purchased with the proceeds of a Liquidity Drawing plus
the amount of accrued interest on such Bond paid with the proceeds of a Liquidity Drawing (and
not pursuant to an Interest Drawing) upon such purchase.
Upon receipt by us of a certificate of the Trustee in the form of Annex H hereto, the Letter of
Credit will automatically and permanently reduce the amount available to be drawn hereunder by
the amount specified in such certificate. Such reduction shall be effective as of the next Business
Day following the date of delivery of such certificate.
Upon any permanent reduction of the Available Amount to be drawn under this Letter of Credit,
as provided herein, we will deliver to you an amendment to this Letter of Credit substantially in
the form of Annex I hereto to reflect any such reduction. The "Available Amount" shall mean
the Original Stated Amount (i) less the amount of all prior reductions pursuant to Interest,
Redemption, Liquidity, Acceleration or Stated Maturity Drawings, (ii) less the amount of any
reduction thereof pursuant to a certificate in the form of Annex H hereto, (iii) plus the amount of
all reinstatements as above provided.
Prior to the Termination Date, we may extend the Stated Expiration Date from time to time at the
request of the Borrower by delivering to you an amendment to this Letter of Credit in the form of
Annex K hereto designating the date to which the Stated Expiration Date is being extended.
Each such extension of the Stated Expiration Date shall become effective on the Business Day
following delivery of such notice to you and thereafter all references in this Letter of Credit to
the Stated Expiration Date shall be deemed to be references to the date designated as such in
E-3
such notice. Any date to which the Stated Expiration Date has been extended as herein provided
may be extended in a like manner.
Upon the Termination Date this Letter of Credit shall automatically terminate and be delivered to
the Issuing Bank for cancellation. Failure to deliver said Letter of Credit will have no effect on
the Termination Date, and the Letter of Credit will still be considered terminated.
This Letter of Credit is transferable to any transferee who has succeeded you as Trustee under
the Indenture, and may be successively transferred. Any transfer request must be affected by
presenting to us the attached form of Annex J signed by the transferor and the transferee together
with the original Letter of Credit. Upon our endorsement of such transfer, the transferee instead
of the transferor shall, without necessity of further action, be entitled to all the benefits of and
rights under this Letter of Credit in the transferor's place; provided that, in such case, any
certificates of the Trustee to be provided hereunder shall be signed by one who states therein that
he is a duly authorized officer or agent of the transferee.
Communications with respect to this Letter of Credit shall be addressed to us at JPMorgan Chase
Bank, N.A., 131 South Dearborn, 5th Floor, Mail Code IL 1-0236, Chicago, 11 60603-5506,
Attention: Standby Letter of Credit Unit, specifically referring to the number of this Letter of
Credit. For telephone assistance, please contact the Standby Client Service Unit at 1-800-634-
1969, select Option 1, or 1-312-385-7910, and have this Letter of Credit number available.
Except as expressly stated herein, this Letter of Credit is governed by, and construed in
accordance with the International Standby Practices, ICC Publication No. 590 (the "1SP98"). As
to matters not governed by the 1SP98, this Letter of Credit shall be governed by and construed in
accordance with the laws of the State of New York, including without limitation the Uniform
Commercial Code as in effect in the State of New York, without regard to principals of conflict
of laws.
All payments made by us hereunder shall be made from our funds and not with the funds of any
other Person.
This Letter of Credit sets forth in full the terms of our undertaking, and such undertaking shall
not in any way be modified or amended by reference to any other document whatsoever.
Very truly yours,
JPMorgan Chase Bank, N.A.
By:_
Name:
Title:
E-4
ANNEX A
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
NOTICE OF CONVERSION DATE
[Date]
JPMorgan Chase Bank, N.A.
131 South Dearborn
5th Floor, Mail Code IL 1-0236
Chicago, IL 60603-5506
Attn: Standby Letter of Credit Unit
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No. CPCS-
358995 dated April 18, 2012 (the "Letter of Credit"), which has been established by you for the
account of PacifiCorp, an Oregon corporation, in favor of the Trustee.
The undersigned hereby certifies and confirms that the Conversion Date has occurred on [insert
date], and, accordingly, said Letter of Credit shall terminate 15 days after such Conversion Date
in accordance with its terms.
All defined terms used herein which are not otherwise defined herein shall have the same
meaning as in the Letter of Credit.
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
[Title of Authorized
Representative]
E-5
ANNEx B
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
NOTICE OF TERMINATION
[Date]
JPMorgan Chase Bank, N.A.
131 South Dearborn
5th Floor, Mail Code IL1-0236
Chicago, IL 60603-5506
Attn: Standby Letter of Credit Unit
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No. CPCS-
358995 dated April 18, 2012 (the "Letter of Credit"), which has been established by you for the
account of PacifiCorp, an Oregon corporation in favor of the Trustee.
The undersigned hereby certifies and confirms that [(i) no Bonds (as defined in the Letter of
Credit) remain Outstanding within the meaning of the Indenture, (ii) all drawings required to be
made under the Indenture and available under the Letter of Credit have been made and honored,
or (iii) [a Substitute Letter of Credit] [an Alternate Credit Facility] (as defined in the Indenture)
has been provided to replace the Letter of Credit pursuant to the Indenture and Section 4.03(J
of the Loan Agreement dated as of May 1, 1991, between the Issuer and the Borrower,]* and,
accordingly, the Letter of Credit shall be terminated in accordance with its terms.
All defined terms used herein which are not otherwise defined shall have the same meaning as in
the Letter of Credit.
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
By
[Title of Authorized
Representative]
* Insert appropriate subsection.
E-6
ANNEX C
TO
JPM0RGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
INTEREST DRAWING CERTIFICATE
JPMorgan Chase Bank, N.A.
facsimile number [phone]
alternately to [phone])
Attn: Standby Letter of Credit Unit
The undersigned individual, a duly authorized representative of The Bank of New York Mellon
Trust Company, N.A. (the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as
follows with respect to (i) that certain Irrevocable Transferable Letter of Credit No. CPCS-
358995 dated April 18, 2012 (the "Letter of Credit"), issued by JPMorgan Chase Bank, N.A.
(the "Bank") in favor of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of Credit):
1.The Beneficiary is the Trustee under the Indenture.
2.The Beneficiary is entitled to make this drawing in the amount of U.S.
$ the Letter of Credit pursuant to the Indenture with respect to the
payment of interest due on all Bonds outstanding on the Interest Payment Date (as defined in the
Indenture) occurring on [insert applicable date]F, other than Pledged Bonds (as defined in the
Indenture)] or Bonds registered in the name of the Company.
3.The amount of the drawing is equal to the amount required to be drawn by the
Trustee pursuant to Section 6.04 of the Indenture.
4.The amount of the drawing made by this Certificate was computed in compliance
with the terms of the Indenture and, when added to the amount of any other drawing under the
Letter of Credit made simultaneously herewith, does not exceed the Available Amount (as
defined in the Letter of Credit).
5.Payment by the Bank pursuant to this drawing shall be made to
ABA Number , Account Number
Attention: Re:
(Signature Page Follows)
E-7
ANNEX C
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
(CONTINUED)
IN WITNESS WHEREOF, this Certificate has been executed this ____ day of
20.
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
By________________________
[Title of Authorized
Representative]
E-8
ANNEx D
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
REDEMPTION DRAWING CERTIFICATE
JPMorgan Chase Bank, N.A.
facsimile number [phone]
alternately to [phone])
Attn: Standby Letter of Credit Unit
The undersigned individual, a duly authorized representative of The Bank of New York Mellon
Trust Company, N.A. (the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as
follows with respect to (i) that certain Irrevocable Transferable Letter of Credit No. CPCS-
358995 dated April 18, 2012 (the "Letter of Credit"), issued by JPMorgan Chase Bank, N.A.
(the "Bank") in favor of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of Credit):
The Beneficiary is the Trustee under the Indenture.
2. The Beneficiary is entitled to make this drawing in the amount of U.S.
$ the Letter of Credit pursuant to Section [3.10] [3.111 13.121 * of the
Indenture.
3. (a) The amount of this drawing is equal to (i) the principal amount of Bonds to be
redeemed by the Issuer (as defined in the Letter of Credit) pursuant to Section
[3.10] [3.11] [3.121* of the Indenture on [insert applicable date] (the "Redemption Date") (other
than Pledged Bonds (as defined in the Indenture) or Bonds registered in the name of the
Company), plus (ii) interest on such Bonds accrued from the immediately preceding Interest
Payment Date (as defined in the Indenture) to the Redemption Date, provided that in the event
the Redemption Date coincides with an Interest Payment Date this drawing does not include any
accrued interest on such Bonds.
(b) Of the amount stated in paragraph 2 above:
(i)U.S. $_______________ is demanded in respect of the principal amount of the
Bonds referred to in subparagraph (a) above; and
(ii)U.S. $______________ is demanded in respect of accrued interest on such Bonds.
4. Payment by the Bank pursuant to this drawing shall be made to
ABA Number , Account
Number . Attention: . Re:
5. The amount of the drawing made by this Certificate was computed in compliance
with the terms and conditions of the Indenture and, when added to the amount of any other
drawing under the Letter of Credit made simultaneously herewith, does not exceed the Available
Amount (as defined in the Letter of Credit).
* Insert appropriate subsection.
E-9
ANNEX D
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
(CONTINUED)
6.Upon payment of the amount drawn hereunder, the Bank is hereby directed to
permanently reduce the Available Amount by U.S. $[insert amount of reduction] and the
Available Amount shall thereupon equal U.S. $[insert new Available Amount]. The Available
Amount has been reduced by an amount equal to the principal of Bonds paid with this drawing
and an amount equal to 65 days' interest thereon at the Cap Interest Rate (as defined in the Letter
of Credit).
7.Of the amount of the reduction stated in paragraph 6 above:
(1) U.S. $____________ is attributable to the principal amount of
Bonds redeemed; and
(ii) U.S. $____________ is attributable to interest on such Bonds (i.e.,
65 days' interest thereon at the Cap Interest Rate).
8.The amount of the reduction in the Available Amount has been computed in
accordance with the provisions of the Letter of Credit.
9.Following the reduction, the Available Amount shall be at least equal to the
aggregate principal amount of the Bonds outstanding (to the extent such Bonds are not Pledged
Bonds (as defined in the Indenture) or Bonds registered in the name of the Company) plus 65
days' interest thereon at the Cap Interest Rate.
* 10. In the case of a redemption pursuant to Section 3.11 of the Indenture, the Trustee,
prior to giving notice of redemption to the owners of the Bonds, received written evidence from
the Bank that the Bank has consented to such redemption.
(Signature Page Follows)
* To be included in certificate only if Section 3.11 is referenced in paragraph numbered 2 or 3
above.
B-b
ANNEX D
TO
JPM0RGAN CHASE BANK; N.A.
LETTER OF CREDIT
No. CPCS-358995
(CONTINUED)
IN WITNESS WHEREOF, this Certificate has been executed this day of
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
LIM
[Title of Authorized
Representative]
E-1 1
ANNEX E
TO
JPM0RGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
LIQUIDITY DRAWING CERTIFICATE
JPMorgan Chase Bank, N.A.
facsimile number [phone]
alternately to [phone])
Attn: Standby Letter of Credit Unit
The undersigned individual, a duly authorized representative of The Bank of New York Mellon
Trust Company, N.A. (the "Beneficiary") hereby CERTIFIES as follows with respect to (i) that
certain Irrevocable Transferable Letter of Credit No. CPCS-358995 dated April 18, 2012 (the
"Letter of Credit"), issued by JPMorgan Chase Bank, N.A. (the "Bank") in favor of the
Beneficiary; (ii) those certain Bonds (as defined in the Letter of Credit); and (iii) that certain
Indenture (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. The Beneficiary is entitled to make this drawing under the Letter of Credit in the
amount of U.S. $_____________ with respect to the payment of the purchase price of Bonds
tendered for purchase in accordance with Section 3.01, 3.02, 3.03, 3.04 or 3.05 of the Indenture
and to be purchased on [insert applicable date] (the "Purchase Date ") which Bonds have not
been remarketed as provided in the Indenture or the purchase price of which has not been
received by the Remarketing Agent (as defined in the Letter of Credit) by 10:00 A.M., New
York, New York time, on said Purchase Date.
3. (a) The amount of the drawing is equal to (i) the principal amount of Bonds to be
purchased pursuant to the Indenture on the Purchase Date (other than Pledged Bonds as defined
in the Indenture or Bonds registered in the name of the Company), plus (ii) interest on such
Bonds accrued from the immediately preceding Interest Payment Date (as defined in the
Indenture) (or if none, the date of issuance of the Bonds) to the Purchase Date, provided that in
the event the Purchase Date coincides with an Interest Payment Date this drawing does not
include any accrued interest on such Bonds.
(b) Of the amount stated in paragraph (2) above:
(i)U.S. $_________________ is demanded in respect of the principal portion of the
purchase price of the Bonds referred to in subparagraph (2) above; and
(ii)U.S. $__ is demanded in respect of payment of the
interest portion of the purchase price of such Bonds.
4. The amount of the drawing made by this Certificate was computed in compliance
with the terms and conditions of the Indenture and, when added to the amount of any other
E-12
ANNEX E
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
(CONTINUED)
drawing under the Letter of Credit made simultaneously herewith, does not exceed the Available
Amount (as defined in the Letter of Credit).
5.The Beneficiary will register or cause to be registered in the name of the
Borrower, upon payment of the amount drawn hereunder, Bonds in the principal amount of the
Bonds being purchased with the amounts drawn hereunder and will deliver such Bonds to the
Trustee in accordance with the Indenture.
6.Payment by the Bank pursuant to this drawing shall be made to

ABA Number Account
Number Attention: Re:
IN WITNESS WHEREOF, this Certificate has been executed this day of
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
[Title of Authorized
Representative]
E-13
ANNExF
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
ACCELERATION DRAWING CERTIFICATE
JPMorgan Chase Bank, N.A.
facsimile number [phone]
alternately to [phone])
Attn: Standby Letter of Credit Unit
The undersigned individual, a duly authorized representative of The Bank of New York Mellon
Trust Company, N.A. (the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as
follows with respect to (i) that certain Irrevocable Transferable Letter of Credit No. CPCS-
358995 dated April 18, 2012 (the "Letter of Credit"), issued by JPMorgan Chase Bank, N.A.
(the "Bank") in favor of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. An Event of Default has occurred under subsection [insert subsection] of
Section 9.01 of the Indenture and the Trustee has declared the principal of and accrued interest
on all Bonds then outstanding immediately due and payable. The Beneficiary is entitled to make
this drawing in the amount of U.S. $____________ under the Letter of Credit pursuant to
Section 9.02 of the Indenture in order to pay the principal of and interest accrued on the Bonds
due to an acceleration thereof in accordance with Section [J of the Indenture.
3. (a) The amount of this drawing is equal to (i) the principal amount of Bonds
outstanding on [insert date of acceleration] (the "Acceleration Date ") other than Pledged Bonds
(as defined in the Indenture) or Bonds registered in the name of the Company, plus (ii) interest
on such Bonds accrued from the immediately preceding Interest Payment Date (as defined in the
Indenture) to the Acceleration Date.
(b) Of the amount stated in paragraph 2 above:
(i)U.S. $____________ is demanded in respect of the principal portion of the Bonds
referred to in subparagraph (a) above; and
(ii)U.S. $____________________ is demanded in respect of accrued interest on such
Bonds.
4. The amount of this drawing made by this Certificate was computed in compliance
with the terms and conditions of the Indenture and, when added to the amount of any drawing
under the Letter of Credit made simultaneously herewith, does not exceed the Available Amount
(as defined in the Letter of Credit).
5. Payment by the Bank pursuant to this drawing shall be made to
ABA Number , Account Number
Attention: , Re:
(Signature Page Follows)
E- 14
ANNEX F
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
(CONTINUED)
IN WITNESS WHEREOF, this Certificate has been executed this ____ day of
.20
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
[Title of Authorized
Representative]
E-15
ANNEX G
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
STATED MATURITY DRAWING CERTIFICATE
JPMorgan Chase Bank, N.A.
facsimile number [phone]
alternately to [phone])
Attn: Standby Letter of Credit Unit
The undersigned individual, a duly authorized representative of The Bank of New York Mellon
Trust Company, N.A. (the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as
follows with respect to (i) that certain Irrevocable Transferable Letter of Credit No. CPCS-
358995 dated April 18, 2012 (the "Letter of Credit"), issued by JPMorgan Chase Bank, N.A.
(the "Bank") in favor of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of Credit):
1.The Beneficiary is the Trustee under the Indenture.
2.The Beneficiary is entitled to make this drawing in the amount of U.S.
under the Letter of Credit pursuant to Section 6.04 of the Indenture.
3.The amount of this drawing is equal to the principal amount of Bonds outstanding
on [_, _________, the maturity date thereof as specified in the Indenture, other than
Pledged Bonds (as defined in the Indenture) or Bonds registered in the name of the Company.
4.The amount of this drawing made by this Certificate was computed in compliance
with the terms and conditions of the Indenture and, when added to the amount of any other
drawing under the Letter of Credit made simultaneously herewith, does not exceed the Available
Amount (as defined in the Letter of Credit).
5.Payment by the Bank pursuant to this drawing shall be made to
ABA Number Account Number

Attention: , Re:
(Signature Page Follows)
E-16
AN1ExG
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
(CONTINUED)
IN WITNESS WHEREOF, this Certificate has been executed this day of
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
By
[Title of Authorized
Representative]
E-17
ANNEX H
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
REDUCTION CERTIFICATE
JPMorgan Chase Bank, N.A.
131 South Dearborn
5th Floor, Mail Code IL 1-0236
Chicago, IL 60603-5506
Attn: Standby Letter of Credit Unit
The undersigned individual, a duly authorized representative of The Bank of New York Mellon
Trust Company, N.A. (the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as
follows with respect to (i) that certain Irrevocable Transferable Letter of Credit No. CPCS-
358995 dated April 18, 2012 (the "Letter of Credit"), issued by JPMorgan Chase Bank, N.A.
(the "Bank") in favor of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of Credit):
1.The Beneficiary is the Trustee under the Indenture.
2.Upon receipt by the Bank of this Certificate, the Available Amount (as defined in
the Letter of Credit) shall be reduced by U.S.$ and the Available Amount shall
thereupon equal U.S. $ . U.S. $_________________ of the new Available
Amount is attributable to interest.
3.The amount of the reduction in the Available Amount has been computed in
accordance with the provisions of the Letter of Credit.
4.Following the reduction, the Available Amount shall be at least equal to the
aggregate principal amount of the Bonds outstanding (other than Pledged Bonds (as defined in
the Indenture) or Bonds registered in the name of the Company) plus 65 days' interest thereon at
the Cap Interest Rate (as defined in the Letter of Credit).
IN WITNESS WHEREOF, this Certificate has been executed this ______ day of
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
By
[Title of Authorized
Representative]
E-18
ANNEX I
TO
JPM0RGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
NOTICE OF REDUCTION AMENDMENT
[Date]
CUSIP No. 291147 BW5
The Bank of New York Mellon Trust Company, N.A.,
as trustee (the "Trustee ") under the Trust Indenture
dated as of May , 1, 1991 (the "Indenture"), between
Emery County, Utah (the "Issuer") and the Trustee
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No. CPCS-
358995 dated April 18, 2012 (the "Letter of Credit"), established by us in your favor as
Beneficiary related to, the U.S. $45,000,000 Pollution Control Revenue Refunding Bonds
(PacifiCorp Project) Series 1991 issued by the Issuer (the "Bonds"). We hereby notify you that,
in accordance with the terms of the Letter of Credit and the Reimbursement Agreement (as
defined in the Letter of Credit), the Available Amount (as defined in the Letter of Credit) has
been reduced to U.S. $, of which U.S. $_______________ is attributable to
principal and U.S. $________________ is attributable to interest.
This amendment shall be attached to the Letter of Credit and made a part thereof.
JPMorgan Chase Bank, N.A.
By:_
Name:
Title:
E-19
ANNEX J
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
REQUEST FOR TRANSFER
JPMorgan Chase Bank, N.A. Date:
131 South Dearborn
Mail Code ILl-0236
Chicago, IL 60603-5506
Attn: Standby Letter of Credit Unit
Re: JPMorgan Chase Bank, N.A. Irrevocable Transferable Letter of Credit No. CPCS-358995 dated April 18, 2012
We, the undersigned "Transferor", hereby irrevocably transfer all of our rights to draw under the above referenced Letter of
Credit ("Credit") in its entirety to:
NAME OF TRANSFEREE
(Print Name and complete address of the Transferee) "Transferee"
ADDRESS OF TRANSFEREE
CITY, STATE/COUNTRY ZIP
In accordance with 1SP98, Rule 6, regarding transfer of drawing rights, all rights of the undersigned Transferor in such Credit are
transferred to the Transferee, who shall have the sole rights as beneficiary thereof, including sole rights relating to any
amendments whether increases or extensions or other amendments and whether now existing or hereafter made. All amendments
are to be advised directly to the Transferee without necessity of any consent of or notice to the undersigned Transferor.
The original Credit, including amendments to this date, is attached and the undersigned Transferor requests that you endorse an
acknowledgment of this transfer on the reverse thereof. The undersigned Transferor requests that you notify the Transferee of
this Credit in such form and manner as you deem appropriate, and the terms and conditions of the Credit as transferred. The
undersigned Transferor acknowledges that you incur no obligation hereunder and that the transfer shall not be effective until you
have expressly consented to effect the transfer by notice to the Transferee.
If you agree to these instructions, please advise the Transferee of the terms and conditions of this transferred Credit and these
instructions.
Transferor represents and warrants that (a) the Transferee is the Transferor's successor trustee under the Indenture, (b) the
enclosed Credit is original and complete, and (c) there is no outstanding demand or request for payment or transfer under the
Credit affecting the rights to be transferred.
The Effective Date shall be the date hereafter on which Transferring Bath effects the requested transfer by acknowledging this
request and giving notice thereof to Transferee.
WE WAIVE ANY RIGHT TO TRIAL BY JURY THAT WE MAY HAVE IN ANY ACTION OR PROCEEDING RELATING
TO OR ARISING OUT OF THIS TRANSFER.
This Request is made subject to ISP98 and is subject to and shall be governed by the laws of the State of New York, without
regard to principles of conflict of laws.
(Signature Page Follows)
E-20
ANNEX J
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
(CONTINUED)
Sincerely yours,
The Bank of New York Mellon Trust Company. N.A.
(Print Name of Transferor)
(Transferor's Authorized Signature)
(Print Authorized Signers Name and Title)
(Telephone Number/Fax Number)
SIGNATURE GUARANTEED
Signature(s) with title(s) conform(s) with that/those on
file with us for this individual, entity or company and
signer(s) is/are authorized to execute this agreement
(Print Name of Bank)
(Address of Bank)
(City, State, Zip Code)
(Print Name and Title of Authorized Signer)
(Authorized Signature)
(Telephone Number)
(Date)
Acknowledged:
(Print Name of Transferee)
(Transferee's Authorized Signature)
(Print Authorized Signers Name and Title)
(Telephone Number/Fax Number)
Acknowledged as of 1 20_
JPMorgan Chase Bank, N.A.
By:
Name:
Title:
SIGNATURE GUARANTEED
Signature(s) with title(s) conform(s) with that/those on
file with us for this individual, entity or company and
signer(s) is/are authorized to execute this agreement.
(Print Name of Bank)
(Address of Bank)
(City, State, Zip Code)
(Print Name and Title of Authorized Signer)
(Authorized Signature)
(Telephone Number)
(Date)
E-21
ANNEX K
TO
JPMORGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
NOTICE OF EXTENSION AMENDMENT
[Date]
CUSIP No. 291147 BW5
The Bank of New York Mellon Trust Company, N.A.,
as trustee (the "Trustee ") under the Trust Indenture
dated as of May 1, 1991 (the "Indenture"), between
Emery County, Utah (the "Issuer") and the Trustee
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No. CPCS-
358995 dated April 18, 2012 (the "Letter of Credit"), established by us in your favor as
Beneficiary related to the U.S. $ Control Revenue Refunding Bonds
(PacifiCorp Project) Series 1991 issued by the Issuer (the "Bonds"). We hereby notify you that,
in accordance with the terms of the Letter of Credit and the Reimbursement Agreement (as
defined in the Letter of Credit), the Stated Expiration Date (as defined in the Letter of Credit) has
been extended to 920.
This amendment shall be attached to the Letter of Credit and made a part thereof.
JPMorgan Chase Bank, N.A.
By:_
Name:
Title:
E-22
ANNEX L
TO
JPM0RGAN CHASE BANK, N.A.
LETTER OF CREDIT
No. CPCS-358995
REINSTATEMENT CERTIFICATE
JPMORGAN CHASE BANK, N.A.
facsimile number [phone]
alternately to [phone])
Attn: Standby Letter of Credit Unit
The undersigned individual, a duly authorized representative of The Bank of New York Mellon
Trust Company, N.A. (the "Beneficiary"), hereby CERTIFIES on behalf of the Beneficiary as
follows with respect to (i) that certain Irrevocable Transferable Letter of Credit No. CPCS-
358995 dated April 18, 2012 (the "Letter of Credit"), issued by JPMorgan Chase Bank, N.A.
(the "Bank") in favor of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of Credit):
1.The undersigned is the Trustee under the Indenture.
2.The Trustee has previously made a Liquidity Drawing under the Letter of Credit
on in the amount of U.S. $_ (representing U.S.
$ principal and U.S. $_______________ of interest) with respect to the
purchase price of Bonds which are now held as Pledged Bonds under the Indenture.
3.The Trustee has received proceeds from the sale of remarketed Pledged Bonds
originally purchased with the proceeds of the above described Liquidity Drawing and as of the
date hereof holds in the Custody Account established under the Indenture the amount of U.S.
$ U.S. $______________ of principal and U.S.
$ interest) with respect to the sale of such Pledged Bonds.
4.In accordance with the terms of the Letter of Credit, the Trustee deems that the
amount available under the Letter of Credit has been automatically reinstated to the extent of the
lesser of (i) the proceeds of remarketed Pledged Bonds held in the Custody Account as set forth
above, or (ii) the amount of the Liquidity Drawing described above, all in accordance with the
terms of the Letter of Credit and this notice.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate
this day of______________
The Bank of New York Mellon Trust
Company, N.A.
as Trustee
VA
[Title of Authorized
Representative] (Title)
E-23
REIMBURSEMENT AGREEMENT
dated as of April 18, 2012
by and between
PACIFICORP
and
JPMORGAN CHASE BANK, N.A.
$45,000,000
City of Forsyth, Rosebud County, Montana
Customized Purchase Pollution Control Revenue Refunding Bonds (PacifiCorp Project),
Series 1988
(NY) 27011 1084/LC.FE$.201 2/FORSYTH DOCUMENTS/Forsyth Reimbursement Agreement doe
Table of Contents
ARTICLE I DEFINITIONS . I
Section 1.01 Certain Defined Terms ......................................................................................... 1
Section 1.02 Relation to Other Documents...............................................................................3
ARTICLE II AMOUNT AND TERMS OF THE LETTER OF CREDIT................................4
Section 2.01 The Letter of Credit.............................................................................................4
Section 2.02 Letter of Credit Drawings....................................................................................4
Section2.03 Tenn ..................................................................................................................... 4
Section 2.04 Reimbursement of Drawings...............................................................................4
Section2.05 Fees .....................................................................................................................4
Section 2.06 Method of Payment; Etc . ...................................................................................... 4
Section 2.07 Computation of Fees ............................................................................................ 4
Section 2.08 Payment Due on Non-Business Day to Be Made on Next Business Day ...........5
Section2.09 Source of Funds...................................................................................................5
Section 2.10 Electronic Transmission.......................................................................................5
Section 2.11 Credit Agreement.................................................................................................5
Section 2.12 Extension of the Expiration Date.........................................................................6
Section2.13 Remedies .............................................................................................................. 6
ARTICLE III CONDITIONS OF ISSUANCE.................................................. KII
Section 3.01 Conditions Precedent to Issuance of the Letter of Credit..........
ARTICLE IV MISCELLANEOUS ................................................................. 7
Section 4.01 Modification of this Agreement ........................................................................... 7
Section 4.02 Waiver of Rights by the Bank.............................................................................. 7
Section4.03 Notices, Etc . ........................................................................................................ 7
Section4.04 No Remedies ...................................................................................................... 9
Section 4.05 No Deductions; Increased Costs ......................................................................... 9
Section4.06 Right of Set Off .................................................................................................. 11
Section4.07 Indemnity .................................................................................................... 11
Section 4.08 Obligations Absolute ........................................................................................ 12
Section 4.09 Liability of the Bank.......................................................................................... 12
Section 4.10 Successors and Assigns...................................................................................... 14
Section4.11 Headings ............................................................................................................ 14
Section4.12 Severability .................................................................................................... 14
Section4.13 Governing Law.................................................................................................. 14
Section 4.14 Continuing Obligation....................................................................................... 14
Section 4.15 Entire Agreement ................................................................................................ 15
Section 4.16 Drawing a Certification ...................................................................................... 15
Section 4.17 Facsimile Documents......................................................................................... 15
Section4.18 Counterparts ...................................................................................................... 15
(NY) 2701 I /OS4ILC.FEB.201 2/FORSYTh DOCUMENTS/Forsyth Reimbursement Agreement.doc
Section 4.19 Government Regulations .15
Section 4.20 Submission to Jurisdiction; Waiver of Jury Trial..............................................15
EXHIBIT A FORM OF IRREVOCABLE LETTER OF CREDIT
11
(NY) 27011 /0841LC.FEB.201 2/FORSYTH DOCUMENTS/Forsyth Reimbursement Agreement.doc
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT, dated as of April 18, 2012, by and between
PACIFICORP, an Oregon corporation, and JPMORGAN CHASE BANK, N.A., as the issuer of
the hereinafter described Letter of Credit.
RECITALS:
(1)Whereas, the Borrower (such term and each other capitalized term used herein
having the meaning set forth in Article I hereof) desires to secure a source of funds to be devoted
exclusively to the payment by the Trustee, when and as due, of the principal of and interest on
the Bonds, and has applied to the Bank for issuance by the Bank of the Letter of Credit in an
original stated amount of $45,961,644.
(2)The Borrower has entered into the Credit Agreement.
(3)The Issuer has heretofore issued the Bonds pursuant to the Indenture.
(4)The Issuer and the Borrower have entered into the Loan Agreement pertaining to
the Bonds.
(5)Under the Loan Agreement the Borrower has agreed to cause the Bonds to be
secured by an irrevocable direct pay letter of credit.
(6)The Bank has agreed to issue the Letter of Credit subject to the following terms
and conditions.
NOW, THEREFORE, in consideration of the premises, including the benefits to be
realized by Borrower as above described, and in order to induce the Bank to issue the Letter of
Credit, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms. Unless otherwise defined in this Agreement, terms
defined in the Credit Agreement shall have the meanings respectively indicated therein. As used
in this Agreement, the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"Administrative Agent" means JPMorgan Chase Bank, N.A. in its capacity as
Administrative Agent under the Credit Agreement, and its successors in such capacity.
"Available Amount" means the total amount available to be drawn under the Letter of
Credit, as the same may be reduced and reinstated from time to time in accordance with the
provisions of the Letter of Credit.
(NY) 2701 I/084/LC.FEB20 I 2/FORSYTH DOCUMENTS/Forsyth Reimbursement Agreement.doc
"Bank" means JPMorgan Chase Bank, N.A., as issuer of the Letter of Credit, and its
successors and assigns, and as Issuing Bank under the Credit Agreement.
"Bond Documents" means (i) the Indenture, (ii) the Loan Agreement, (iii) the
Remarketing Agreement and (iv) any other document executed by the Borrower in connection
with the issuance, reoffering or sale of the Bonds.
"Bonds" or "Bonds" means Issuer's $45,000,000 City of Forsyth, Rosebud County,
Montana Customized Purchase Pollution Control Revenue Refunding Bonds (PacifiCorp Project)
Series 1988.
"Borrower" means PacifiCorp, an Oregon corporation, and its successors and assigns.
"Business Day" has the meaning assigned thereto in the Letter of Credit.
"Closing Date" means the date on which the Letter of Credit is issued.
"Control Agreement" means the Control Agreement dated as of April 18, 2012 among
the Borrower, the Bank and the Trustee as amended or supplemented and restated from time to
time.
"Costs" has the meaning assigned thereto in Section 4.07.
"Credit Agreement" means that certain Amended and Restated Credit Agreement dated
as of July 6, 2006, among the Borrower, various banks identified therein, the Administrative
Agent and The Royal Bank of Scotland plc, as Syndication Agent, as amended or supplemented
from time to time.
"Dodd-Frank Act" means the Dodd-Frank Wall Street Reform and Consumer Protection
Act of 2010, as enacted by the United States Congress, and signed into law on July 21, 2010, and
all statutes, rules, guidelines or directives promulgated thereunder.
"Expiration Date" has the meaning assigned to such term in the Letter of Credit.
"Fee Letter" means the fee letter dated April 18, 2012 between the Borrower and the
"Governmental Authority" means any nation or government, any state, department,
agency or other political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to any government, and any
corporation or other entity owned or controlled (through stock or capital ownership or otherwise)
by any of the foregoing.
"Indenture" means that certain Trust Indenture dated as of January 1, 1988 between the
Issuer and the Trustee, as amended, supplemented and restated through and including the date
hereof.
2
(NY) 2701 l/004/LC,FEB.2OI2IFORSYTH DOCUMENTS/Forsyth Reimbursement Agreement.doe
"ISP" or "ISP98" means, International Standby Practices 1998 (International Chamber of
Commerce Publication No. 590).
"Issuer" means City of Forsyth, Rosebud County, Montana, and its lawful successors and
assigns.
"Letter of Credit" means the irrevocable direct pay letter of credit issued by the Bank to
the Trustee to secure payment of the Bonds, substantially in the form of Exhibit A attached
hereto.
"Loan Agreement" means the Loan Agreement dated as of January 1, 1988 between the
Borrower and the Issuer, as amended, supplemented and restated through and including the date
hereof.
"Official Statement" means the Supplement to Official Statement dated April 16, 2012
relating to the Bonds, together with the documents incorporated therein by reference.
"Payment Document" has the meaning assigned thereto in Section 4.08.
"Pledge Agreement" means the Pledge Agreement dated as of April 18, 2012 between the
Borrower and the Bank, as amended or supplemented from time to time.
"Pledged Bonds" has the meaning assigned thereto in the Indenture.
"Related Documents" means this Agreement, the Letter of Credit, the Fee Letter, the
Bond Documents, the Pledge Agreement, the Control Agreement, the Credit Agreement and any
other agreement or instrument relating thereto.
"Remarketing Agent" means the placement or remarketing agent at the time serving as
such under the Remarketing Agreement and designated as the Remarketing Agent for purposes
of the Indenture. The current Remarketing Agent is Barclays Capital, the investment banking
division of Barclays Bank PLC.
"Remarketing Agreement" means the Remarketing Agreement dated January 14, 1988
between the Borrower and the Remarketing Agent, as from time to time amended or
supplemented, or if such Remarketing Agreement shall be terminated, then such other agreement
which may from time to time be entered into with any Remarketing Agent with respect to the
remarketing or placement of the Bonds.
"Stated Expiration Date" has the meaning assigned thereto in the Letter of Credit.
"Trustee" means The Bank of New York Mellon Trust Company, N.A., as trustee under
the Indenture, or any further successor trustee under the Indenture.
Section 1.02 Relation to Other Documents. Nothing in this Agreement shall be deemed
to amend, or relieve the Borrower of any of its obligations under, the Credit Agreement or any
other Related Document. To the extent any provision of this Agreement conflicts with any
provision of the Credit Agreement, the provisions of this Agreement shall control as between the
3
(NY) 2703 I/084/LC.FEB2012/FORSYTH DOCUMENTS/Forsyth Reimbursement Agreement.doc
Borrower and the Bank. For avoidance of doubt, nothing herein shall affect the rights or
obligations of any other "Bank" party to the Credit Agreement.
ARTICLE II
AMOUNT AND TERMS OF THE LETTER OF CREDIT
Section 2.01 The Letter of Credit. Subject to the terms and conditions of this
Agreement, the Bank agrees to issue the Letter of Credit to the Trustee as beneficiary on the
Closing Date. The Letter of Credit shall be in the original stated amount of $45,961,644
consisting of (i) $45,000,000 to pay principal of the Bonds, plus (ii) 65 days' interest on said
principal amount computed at the rate of twelve percent (12%) per annum calculated on the basis
of a 365 day year and actual days elapsed, in the amount of $961,644.
Section 2.02 Letter of Credit Drawings. The Trustee is authorized to make drawings
under the Letter of Credit in accordance with the terms thereof. The Borrower hereby directs the
Bank to make payments under the Letter of Credit in the manner therein provided. The
Borrower hereby irrevocably approves reductions and reinstatements of the Available Amount as
provided in the Letter of Credit.
Section 2.03 Term. The Letter of Credit will expire as provided in the Letter of Credit.
Section 2.04 Reimbursement of Drawings. The Borrower agrees to reimburse the Bank
for the full amount of any drawing made under the Letter of Credit upon payment by the Bank of
each such drawing on the date specified pursuant to Section 2.17(c) of the Credit Agreement. If
the Borrower does not make such reimbursement on such date, such reimbursement obligation
shall bear interest at the applicable rate per annum specified in the Credit Agreement.
Section 2.05 Fees. The Borrower hereby agrees to pay to the Bank non-refundable fees
as provided in the Fee Letter.
Section 2.06 Method of Payment; Etc. All payments to be made by the Borrower under
this Agreement shall be made at the Chicago office of the Bank not later than 2:00 P.M.
(Chicago time) on the date when due and shall be made in lawful money of the United States of
America in freely transferable and immediately available funds in accordance with the wiring
instructions below (as such instructions may be modified from time to time by notice from the
Bank to the Borrower):
JPMorgan Chase Bank, N.A.
ABA #02100021
Credit Account #: 324331754
Credit Account Name: Global Trade Services - Chicago
OBI Reference: L/C No. CPCS-352394
Attention: Standby L/C Unit
Section 2.07. Computation of Fees. All computations of fees payable by the Borrower
under this Agreement shall be made on the basis of a 360-day year and actual days elapsed.
4
(NY) 2701 I/0841LC.FEB.2012/FORS'fl'H DOCUMENTS/Forsyth Reimbursement Agreementdoc
Section 2.08. Payment Due on Non-Business Day to Be Made on Next Business Day. If
any sum becomes payable pursuant to this Agreement on a day which is not a Business Day, the
date for payment thereof shall be extended, without penalty, to the next succeeding Business Day,
and such extended time shall be included in the computation of interest and fees.
Section 2.09. Source of Funds. All payments made by the Bank pursuant to the Letter
of Credit shall be made from funds of the Bank, and not from the funds of any other Person.
Section 2.10. Electronic Transmissions. The Bank is authorized to accept and process
any amendments, transfers, assignments of proceeds, instructions, consents, waivers and all
documents relating to the Letter of Credit which are sent to Bank by electronic transmission,
including SWIFT, electronic mail, telex, telecopy, telecopy, courier, mail or other computer
generated telecommunications and such electronic communication shall have the same legal
effect as if written and shall be binding upon and enforceable against the Borrower. The Bank
may, but shall not be obligated to, require authentication of such electronic transmission or that
the Bank receives original documents prior to acting on such electronic transmission.
Section 2.11 Credit Agreement. (a) The Borrower has requested the Bank to issue the
Letter of Credit pursuant to the terms and conditions of the Credit Agreement, including, without
limitation, Section 2.17 thereof. The parties hereto covenant and agree that the provisions of the
Credit Agreement shall apply to and govern with respect to the issuance of the Letter of Credit,
the Letter of Credit Liabilities arising as a result thereof and all other matters relating thereto.
(b)The Borrower acknowledges and agrees that for all purposes hereunder and under the
Credit Agreement, including without limitation for purposes of determining the Payment Date
and the date from which interest shall accrue on any Reimbursement Obligation under Section
2.17(c) of the Credit Agreement, (1) the Borrower shall be deemed to have notice of any drawing
on the Letter of Credit pursuant to (i) an Interest Drawing Certificate in the form of Annex C to
the Letter of Credit or (ii) a Redemption Drawing Certificate in the form of Annex D to the
Letter of Credit on the Business Day preceding such drawing and (2) the Borrower shall be
deemed to have notice of any drawing on the Letter of Credit pursuant to (i) a Liquidity
Certificate in the form of Annex E to the Letter of Credit, (ii) an Acceleration Drawing
Certificate in the form of Annex F to the Letter of Credit or (iii) a Stated Maturity Drawing
Certificate in the form of Annex G to the Letter of Credit by 10:00 A.M. (New York City time)
on the date of such drawing.
(c)The Borrower hereby represents and warrants that:
(1)after the issuance of the Letter of Credit, the Total Outstanding Amount will not
exceed the Total Commitment;
(2)immediately prior to and after the issuance of the Letter of Credit, no Default
shall have occurred and be continuing under the Credit Agreement;
(3)the representations and warranties of the Borrower contained in the Bond
Documents and in the Credit Agreement are true on and as of the date of issuance of the Letter of
Credit, before and after giving effect to such issuance, as though made on and as of such date;
and
5
(NY) 2701 I/0841LC.FEB201 2/FORSYTH DOCUMENTS/Forsyth Reimbursement Agrecment.doc
(4) No petition by or against the Borrower has at any time been filed under the United
States Bankruptcy Code or under any similar act.
Section 2.12 Extension of the Expiration Date. (a) At any time there shall remain no
less than ninety (90) days to the then current Stated Expiration Date of the Letter of Credit, the
Borrower may request the Bank to extend the then current Stated Expiration Date for a period of
one year. If the Bank, in its sole discretion, elects to extend the Stated Expiration Date then in
effect, the Bank shall give written notice of such election to extend to the Borrower and the
Trustee within thirty (30) days of receipt of such extension request from the Borrower, it being
understood and agreed that the failure of the Bank to notify the Borrower and the Trustee of any
decision within such 30-day period shall be deemed to be a rejection of such request and the
Bank shall not incur any liability or responsibility whatsoever by reason of the Bank's failure to
notify such parties within such 30-day period. The Bank's consent to any such extension of the
Stated Expiration Date shall be conditioned upon the preparation, execution and delivery of
documentation in form and substance satisfactory to the Bank and its counsel. Any date to
which the Stated Expiration Date has been extended in accordance with this Section 2.12 may be
extended in like manner.
(b) Upon any extension of the Stated Expiration Date pursuant to this Section 2.12, the
Bank and the Borrower each reserves the right to renegotiate any provision hereof.
Section 2.13 Remedies. Upon the occurrence of any Event of Default, the Bank may,
in addition to any other remedies provided by applicable law or by the Credit Agreement or any
other Related Document, give notice of the occurrence of an Event of Default to the Trustee,
directing the Trustee to accelerate the Bonds pursuant to Section 9.02(a) of the Indenture.
ARTICLE III
CONDITIONS OF ISSUANCE
Section 3.01 Conditions Precedent to Issuance of the Letter of Credit. The obligation of
the Bank to issue the Letter of Credit is subject to the conditions precedent that the Bank shall
have received on or before the date of the issuance of the Letter of Credit the following items,
each dated such date, in form and substance satisfactory to the Bank, that the other conditions
described below shall have been satisfied and that the costs, expenses and fees due and payable
under Section 2.05 and 4.07 hereof shall have been paid:
(a)The Issuer, the Borrower and the Trustee shall have duly authorized, executed and
delivered the Bond Documents, all in form and substance satisfactory to the Bank and its counsel.
(b)The Bonds shall have been duly reoffered and sold pursuant to the Remarketing
Agreement.
(c)The representations and warranties contained in the Credit Agreement and in the
Bond Documents shall be true on the Closing Date with the same effect as though made on and
as of that date, and no condition, event or act shall have occurred and be continuing which
constitutes a Default under the Credit Agreement.
6
(NY) 2701 1/0841LC.FEB.2012/FORSYT}1 DOCUMENTS/Forsyth Reimbursement Agreenienidoc
(d)The Bank shall have received from counsel for the Borrower an opinion in form
and substance satisfactory to it as to such matters relating to the Related Documents as it may
reasonably request.
(e)The Bank shall have received from Bond Counsel an approving opinion in
substantially the form attached to the Official Statement.
(f)All proceedings taken in connection with the execution and delivery of the Bonds
shall be reasonably satisfactory to the Bank and the Bank shall have received copies of such
certificates, documents and papers as reasonably requested in connection therewith, all in form
and substance reasonably satisfactory to the Bank. The Borrower shall supply to the Bank copies
certified by the secretary or an assistant secretary of the Borrower of corporate resolutions in
form and substance reasonably satisfactory to the Bank with respect to the authorization of the
Related Documents and the execution thereof by the Borrower, a certificate of the Secretary or
an Assistant Secretary of the Borrower certifying the names and true signatures of the officers of
the Borrower authorized to sign this Agreement and the other Related Documents to which it is a
party, the Articles of Incorporation and By-Laws of the Borrower, together with all amendments
thereto, and a copy of a certificate issued by the Secretary of State of the State of Oregon issued
no more than 30 days preceding the Closing Date, stating that the Borrower is in good standing
in the State of Oregon.
(g)No law, regulation, ruling or other action of the United States, the State of New
York or any political subdivision therein or thereof shall be in effect or shall have occurred, the
effect of which would be to prevent the Bank from fulfilling its obligations under this Agreement.
ARTICLE IV
MISCELLANEOUS
Section 4.01. Modification of this Agreement. No amendment, modification or waiver
of any provision of this Agreement shall be effective unless the same shall be in writing and
signed by the Bank and the Borrower and no amendment, modification or waiver of any
provision of the Letter of Credit shall in any event be effective unless the same shall be in
writing and signed by the Bank. Any such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand on the Borrower
in any case shall entitle the Borrower to any other or further notice or demand in the same,
similar or other circumstances.
Section 4.02. Waiver of Rights by the Bank. No course of dealing or failure or delay on
the part of the Bank in exercising any right, power or privilege hereunder or under the Letter of
Credit or this Agreement shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise or the exercise of any other right or privilege. The
rights of the Bank under the Letter of Credit and the rights of the Bank under this Agreement are
cumulative and not exclusive of any rights or remedies that the Bank would otherwise have.
Section 4.03 Notices, Etc. All notices and other communications provided for hereunder
shall be in writing (including telecopier communication or other electronic means if
7
(NY) 2701 11084/LC.FEB.201 2/FORSYTH DOCUMENTS/Forsyth Reimbursement Agreement.doc
accompanied by telephonic confirmation of receipt) and mailed, telecopied or delivered as
follows:
If to the Borrower, at:
PacifiCorp
825 N E. Multnomah St., Suite 1900
Portland, Oregon 97232
Attention: Vice President and Treasurer
Facsimile No.: [phone]
If to the Bank, at:
JPMorgan Chase Bank, N.A.
1 Chase Manhattan Plaza, Floor 03
New York, NY 10005-1401
Facsimile No.: [phone]
Telephone No.: [phone]
Attention: Regina Bruni
With a copy to the Bank,
Standby Letter of Credit Unit:
JPMorgan Chase Bank, N.A.
131 South Dearborn
5th Floor, Mail Code IL 1-0236
Standby Letter of Credit Unit
Chicago, 1160603-5506
Facsimile No.: [phone]
Telephone No.: [phone], Option 1
Attention: Standby Service Unit
If to the Remarketing Agent, at:
Barclays Capital, Inc.
745 Seventh Avenue, 2nd Floor
New York, NY 10019
Facsimile No.: [phone]
Telephone No.: [phone]
Attention: David Lo, Short Term Municipal Desk
If to the Trustee, to
The Bank of New York Mellon Trust Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Facsimile No.: [phone]
8
(NY) 27011 1084/LCFEB.201 2/FORSYTH DOCUMENTS/Forsyth Reimbursement Agreement doe
Telephone No.: [phone]
Attention: Corporate Trust
or, as to each party, at such other address as shall be designated by such party in a written notice
to the other party. All such notices and communications shall, when mailed or telecopied, be
effective when deposited in the mails or telecopied, respectively, addressed as aforesaid, except
that notices to the Bank shall not be effective until received by the Bank.
Section 4.04 No Remedies. No failure on the part of the Bank to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
Section 4.05 No Deductions; Increased Costs. (a) Except as otherwise required by law,
each payment by the Borrower to the Bank under this Agreement or any other Related Document
shall be made without setoff or counterclaim and without withholding for or on account of any
present or future taxes (other than overall net income taxes on the recipient imposed by any
jurisdiction having control of such recipient) imposed by or within the jurisdiction in which the
Borrower is domiciled, any jurisdiction from which the Borrower makes any payment hereunder,
or (in each case) any political subdivision or taxing authority thereof or therein. If any such
withholding is so required, the Borrower shall make the withholding, pay the amount withheld to
the appropriate Governmental Authority before penalties attach thereto or interest accrues
thereon and forthwith pay such additional amount as may be necessary to ensure that the net
amount actually received by the Bank free and clear of such taxes (including such taxes on such
additional amount) is equal to the amount which the Bank would have received had such
withholding not been made. If the Bank pays any amount in respect of any such taxes, penalties
or interest, the Borrower shall reimburse the Bank for that payment on demand in the currency in
which such payment was made. If the Borrower pays any such taxes, penalties or interest, it
shall deliver official tax receipts evidencing that payment or certified copies thereof to the Bank
on or before the thirtieth day after payment.
(b) If the Internal Revenue Code or any newly adopted law, treaty, regulation,
guideline or directive, or any change in any, law, treaty, regulation, guideline or directive or any
new or modified interpretation of any of the foregoing by any authority or agency charged with
the administration or interpretation thereof or any central bank or other fiscal, monetary or other
authority having jurisdiction over the Bank or the transactions contemplated by this Agreement,
whether or not having the force of law (each a "Change in Law") shall:
(i) limit the deductibility of interest on funds obtained by the Bank to pay
any of its liabilities or subject the Bank to any tax, duty, charge, deduction or withholding on or
with respect to payments relating to the Bonds, the Letter of Credit or this Agreement, or any
amount paid or to be paid by the Bank as the issuer of the Letter of Credit (other than any tax
measured by or based upon the overall net income of the Bank imposed by any jurisdiction
having control over the Bank);
9
(NY) 2701 1/0841LC.FEB.2OI2IFORSYTH DOCUMENTS/Forsyth Reimbursement Agreementdoc
(ii)impose, modify, require, make or deem applicable to the Bank any reserve
requirement, capital requirement, special deposit requirement, insurance assessment or similar
requirement against any assets held by, deposits with or for the account of, or loans, letters of
credit or commitments by, an office of the Bank;
(iii)change the basis of taxation of payments due the Bank under this
Agreement or the Bonds (other than by a change in taxation of the overall net income of the
Bank);
(iv)cause or deem letters of credit to be assets held by the Bank and/or as
deposits on its books; or
(v)impose upon the Bank any other condition with respect to any amount
paid or payable to or by the Bank or with respect to this Agreement or any of the other Related
Documents;
and the result of any of the foregoing is to increase the cost to the Bank of making any payment
or maintaining the Letter of Credit, or to reduce the amount of any payment (whether of principal,
interest or otherwise) receivable by the Bank, or to reduce the rate of return on the capital of the
Bank or to require the Bank to make any payment on or calculated by reference to the gross
amount of any sum received by it, in each case by an amount which the Bank in its reasonable
judgment deems material, then:
(1)the Bank shall promptly notify the Borrower in writing of such event;
(2)the Bank shall promptly deliver to the Borrower a certificate stating the
change which has occurred or the reserve requirements or other costs or conditions which have
been imposed on the Bank or the request, direction or requirement with which it has complied,
together with the date thereof, the amount of such increased cost, reduction or payment and a
reasonably detailed description of the way in which such amount has been calculated, and the
Bank's determination of such amounts, absent fraud or manifest error, shall be conclusive; and
(3)the Borrower shall pay to the Bank, from time to time as specified by the
Bank, such an amount or amounts as will compensate the Bank for such additional cost,
reduction or payment.
The protection of this Section 4.05(b) shall be available to the Bank regardless of any possible
contention of invalidity or inapplicability of the law, regulation or condition which has been
imposed; provided, however, that if it shall be later determined by the Bank that any amount so
paid by the Borrower pursuant to this Section 4.05(b) is in excess of the amount payable under
the provisions hereof, the Bank shall refund such excess amount to the Borrower.
Notwithstanding the foregoing, for purposes of this Agreement (a) all requests, rules, guidelines
or directives in connection with the Dodd-Frank Act shall be deemed to be a Change in Law,
regardless of the date enacted, adopted or issued, and (b) all requests, rules, guidelines or
directives promulgated by the Bank for International Settlements, the Basel Committee on
Banking Regulations and Supervisory Practices (or any successor or similar authority) or any
10
(NY) 2701 1/OS4ILC.FEB.201 2/FORSYTH DOCUMENTS/Forsyth Reimbursement Agreement.doc
Governmental Authority shall be deemed a Change in Law regardless of the date enacted,
adopted or issued.
Section 4.06 Right of Setoff. (a) Upon the occurrence and during the continuance of an
Event of Default, the Bank is hereby authorized at any time and from time to time without notice
to the Borrower (any such notice being expressly waived by the Borrower), and to the fullest
extent permitted by law, to setoff, to exercise any banker's lien or any right of attachment and
apply any and all balances, credits, deposits (general or special, time or demand, provisional or
final except those accounts established for the benefit of third parties or to satisfy legal or
regulatory requirements), accounts or monies at any time held and other indebtedness at any time
owing by the Bank to or for the account of the Borrower (irrespective of the currency in which
such accounts, monies or indebtedness may be denominated and the Bank is authorized to
convert such accounts, monies and indebtedness into United States dollars) against any and all of
the Obligations of the Borrower, whether or not the Bank shall have made any demand for any
amount owing to the Bank by the Borrower.
(b) The rights of the Bank under this Section 4.06 are in addition to, in augmentation
of, and, except as specifically provided in this Section 4.06, do not derogate from or impair,
other rights and remedies (including, without limitation, other rights of setoff) which the Bank
may have.
Section 4.07 Indemnity. The Borrower shall indemnify and hold harmless the Bank, its
parent, and correspondents and each of their respective directors, officers, employees and agents
(each, including the Bank, an "Indemnified Person") from and against any and all claims, suits,
judgments, costs, losses, fines, penalties, damages, liabilities, and expenses, including expert
witness fees and reasonable legal fees, charges and disbursements of retained counsel for any
Indemnified Person ("Costs"), arising out of, in connection with, or as a result of: (i) the Letter of
Credit or any pre-advice of its issuance; (ii) any transfer, sale, delivery, surrender, or
endorsement of any Payment Document at any time(s) held by any Indemnified Person in
connection with the Letter of Credit; (iii) any action or proceeding arising out of or in connection
with the Letter of Credit, this Agreement or any other Related Document (whether administrative,
judicial or in connection with arbitration), including any action or proceeding to compel or
restrain any presentation or payment under the Letter of Credit, or for the wrongful dishonor of
or honoring a presentation under the Letter of Credit; (iv) any independent undertakings issued
by the beneficiary of the Letter of Credit; (v) any unauthorized communication or instruction
(whether oral, telephonic, written, telegraphic, facsimile or electronic) (each an "Instruction")
regarding the Letter of Credit or error in computer transmission; (vi) an adviser, confirmer or
other nominated person seeking to be reimbursed, indemnified or compensated; (vii) any third
party seeking to enforce the rights of an Borrower, beneficiary, nominated person, transferee,
assignee of proceeds of the Letter of Credit; (viii) the fraud, forgery or illegal action of parties
other than the Indemnified Person; (ix) the enforcement of this Agreement or any rights or
remedies under or in connection with this Agreement, a Related Document or the Letter of Credit;
(x) the acts or omissions, whether rightful or wrongful, of any present or future de jure or de
facto governmental or regulatory authority or cause or event beyond the control of such
Indemnified Person; in each case, including that resulting from Bank's own negligence, provided,
however, that such indemnity shall not be available to any Person claiming indemnification
under (i) through (x) above to the extent that such Costs are found in a final, non-appealable
11
(NY) 2701 t/084/LC.FER 2012/FORSYTh DOCUMENTS/Forsyth Reimbursement Agreement.doc
judgment by a court of competent jurisdiction to have resulted directly from the gross negligence
or willful misconduct of the Indemnified Person claiming indemnity. If and to the extent that the
obligations of Borrower under this paragraph are unenforceable for any reason, Borrower shall
make the maximum contribution to the Costs permissible under applicable law.
Section 4.08 Obligations Absolute. The obligations of the Borrower under this
Agreement shall be absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances whatsoever, including,
without limitation: (i) any lack of validity, enforceability or legal effect of this Agreement or any
Related Document, or any term or provision herein or therein; (ii) payment against presentation
of any draft, demand or claim for payment under the Letter of Credit or other document
presented for purposes of drawing under the Letter of Credit (a "Payment Document") that does
not comply in whole or in part with the terms of the Letter of Credit or which proves to be
fraudulent, forged or invalid in any respect or any statement therein being untrue or inaccurate in
any respect, or which is signed, issued or presented by a Person (or a transferee of such Person)
purporting to be a successor or transferee of the beneficiary of the Letter of Credit; (iii) the Bank
or any of its branches or affiliates being the beneficiary of the Letter of Credit; (iv) the Bank or
any correspondent honoring a drawing against a Payment Document up to the amount available
under the Letter of Credit even if such Payment Document claims an amount in excess of the
amount available under the Letter of Credit; (v) the existence of any claim, set-off, defense or
other right that the Borrower or any other Person may have at any time against any beneficiary,
any assignee of proceeds, the Bank or any other Person; (vi) the Bank or any correspondent
having previously paid against fraudulently signed or presented Payment Documents (whether or
not the Borrower shall have reimbursed the Bank for such drawing); and (vii) any other event,
circumstance or conduct whatsoever, whether or not similar to any of the foregoing, that might,
but for this paragraph, constitute a legal or equitable defense to or discharge of, or provide a right
of set-off against, the Borrower's obligations hereunder (whether against the Bank, the
beneficiary or any other Person); provided, however, that subject to Section 4.09 hereof, the
foregoing shall not exculpate the Bank from such liability to the Borrower as may be finally
judicially determined in an independent action or proceeding brought by the Borrower against
the Bank following payment of the Borrower's obligations under this Agreement.
Section 4.09 Liability of the Bank. (a) The liability of the Bank (or any other
Indemnified Person) under, in connection with and/or arising out of this Agreement, any Related
Document or the Letter of Credit (or any pre-advice), regardless of the form or legal grounds of
the action or proceeding, shall be limited to any direct damages suffered by the Borrower that are
caused directly by Bank's gross negligence or willful misconduct in (i) honoring a presentation
that does not at least substantially comply with the Letter of Credit, (ii) failing to honor a
presentation that strictly complies with the Letter of Credit or (iii) retaining Payment Documents
presented under the Letter of Credit. In no event shall the Bank be deemed to have failed to act
with due diligence or reasonable care if the Bank's conduct is in accordance with Standard Letter
of Credit Practice or in accordance with this Agreement. The Borrower's aggregate remedies
against the Bank and any Indemnified Person for wrongfully honoring a presentation under the
Letter of Credit or wrongfully retaining honored Payment Documents shall in no event exceed
the aggregate amount paid by the Borrower to the Bank in respect of an honored presentation -
under the Letter of Credit, plus interest. Notwithstanding anything to the contrary herein, the
Bank and the other Indemnified Persons shall not, under any circumstances whatsoever, be liable
12
(NY) 2701 1/084/LC.FEB.201 2/FORSYTH DOCUMENTS/Forsyth Reimbursement Agreement.doc
for any punitive, consequential, indirect or special damages or losses regardless of whether the
Bank or any Indemnified Person shall have been advised of the possibility thereof or of the form
of action in which such damages or losses may be claimed. The Borrower shall take action to
avoid and mitigate the amount of any damages claimed against the Bank or any Indemnified
Person, including by enforcing its rights in the underlying transaction. Any claim by the
Borrower for damages under or in connection with this Agreement, any Related Document or the
Letter of Credit shall be reduced by an amount equal to the sum of (i) the amount saved by the
Borrower as a result of the breach or alleged wrongful conduct and (ii) the amount of the loss
that would have been avoided had the Borrower mitigated damages.
(b)Without limiting any other provision of this Agreement, the Bank and each other
Indemnified Person (if applicable), shall not be responsible to the Borrower for, and the Bank's
rights and remedies against the Borrower and the Borrower's obligation to reimburse and
indemnify the Bank shall not be impaired by: (i) honor of a presentation under the Letter of
Credit which on its face substantially complies with the terms of the Letter of Credit; (ii) honor
of a presentation of any Payment Documents which appear on their face to have been signed,
presented or issued (X) by any purported successor or transferee of any beneficiary or other party
required to sign, present or issue the Payment Documents or (Y) under a new name of the
beneficiary; (iii) acceptance as a draft of any written or electronic demand or request for payment
under the Letter of Credit, even if nonnegotiable or not in the form of a draft, and may disregard
any requirement that such draft, demand or request bear any or adequate reference to the Letter
of Credit; (iv) the identity or authority of any presenter or signer of any Payment Document or
the form, accuracy, genuineness, or legal effect of any presentation under the Letter of Credit or
of any Payment Documents; (v) disregard of any non-documentary conditions stated in the Letter
of Credit; (vi) acting upon any Instruction which it, in Good Faith, believes to have been given
by a Person or entity authorized to give such Instruction; (vii) any errors, omissions,
interruptions or delays in transmission or delivery of any message, advice or document
(regardless of how sent or transmitted) or for errors in interpretation of technical terms or in
translation; (viii) any delay in giving or failing to give any notice; (ix) any acts, omissions or
fraud by, or the solvency of, any beneficiary, any nominated Person or any other Person; (x) any
breach of contract between the beneficiary and the Borrower or any of the parties to the
underlying transaction; (xi) assertion or waiver of any provision of the ISP which primarily
benefits an issuer of a letter of credit, including, any requirement that any Payment Document be
presented to it at a particular hour or place; (xii) payment to any paying or negotiating bank
(designated or permitted by the terms of the Letter of Credit) claiming that it rightfully honored
or is entitled to reimbursement or indemnity under Standard Letter of Credit Practice; (xiii)
dishonor by the Bank of any presentation for which the Borrower is unable or unwilling to
reimburse or indemnify the Bank (provided that the Borrower acknowledges that if the Bank
shall later be required to honor the presentation, the Borrower shall be liable therefore in
accordance with Article II hereof); and (xiv) acting or failing to act as required or permitted
under Standard Letter of Credit Practice. For purposes of this Section 4.09(b), "Good Faith"
means honesty in fact in the conduct of the transaction concerned.
(c)The Borrower shall notify the Bank of (i) any noncompliance with any Instruction,
any other irregularity with respect to the text of the Letter of Credit or any amendment thereto or
any claim of an unauthorized, fraudulent or otherwise improper Instruction, within three (3)
Business Days of the Borrower's receipt of a copy of the Letter of Credit or amendment and (ii)
13
(NY) 2701 1/084/LC.FEB201 2/FORSYTH DOCUMENTS/Forsyth Reimbursement Agreement.doc
any objection the Borrower may have to the Bank's honor or dishonor of any presentation under
the Letter of Credit or any other action or inaction taken or proposed to be taken by the Bank
under or in connection with this Agreement or the Letter of Credit, within three (3) Business
Days after the Borrower receives notice of the objectionable action or inaction. The failure to so
notify the Bank within said times shall discharge the Bank from any loss or liability that the
Bank could have avoided or mitigated had it received such notice, to the extent that the Bank
could be held liable for damages hereunder; provided, that, if the Borrower shall not provide
such notice to the Bank within five (5) Business Days of the date of receipt in the case of clause
(i) or ten (10) Business Days from the date of receipt in the case of clause (ii), Bank shall have
no liability whatsoever for such noncompliance, irregularity, action or inaction and the Borrower
shall be precluded from raising such noncompliance, irregularity or objection as a defense or
claim against Bank.
Section 4.10 Successors and Assigns. Whenever in this Agreement the Bank is referred
to, such reference shall be deemed to include the successors and assigns of the Bank and all
covenants, promises and agreements by or on behalf of the Borrower which are contained in this
Agreement shall inure to the benefit of such successors and assigns. The rights and duties of the
Borrower hereunder, however, may not be assigned or transferred, except as specifically
provided in this Agreement or with the prior written consent of the Bank, and all obligations of
the Borrower hereunder shall continue in full force and effect notwithstanding any assignment by
the Borrower of any of its rights or obligations under any of the Related Documents or any
entering into, or consent by the Borrower to, any supplement or amendment to any of the Related
Documents.
Section 4.11. Headings. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
Section 4.12. Severability. Any provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or non-authorization without invalidating the
remaining provisions hereof or affecting the validity, enforceability or legality of such provision
in any other jurisdiction. The parties shall endeavor in good faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable provisions.
Section 4.13. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
Section 4.14. Continuing Obligation. This Agreement is a continuing obligation, shall
survive the expiration of the Letter of Credit until amounts owed hereunder and under the Credit
Agreement are paid in full and shall (a) be binding upon the Borrower, its successors and assigns,
and (b) inure to the benefit of and be enforceable by the Bank and its successors, transferees and
assigns. The obligation of the Borrower to reimburse the Bank pursuant to Sections 4.05 and
4.07 hereof shall survive the payment of the Bonds and termination of this Agreement.
14
(NY) 2701 1/084/LC.FEB.2012/FORSYTH DOCUMENTS/Forsyth Reimbursement Agreement.doc
Section 4.15. Entire Agreement. The Related Documents constitute the entire
understanding of the parties with respect to the subject matter thereof and any prior agreements,
whether written or oral, with respect thereto are superseded hereby.
Section 4.16. Drawing a Certification. Each drawing by the Trustee or any agent thereof
under the Letter of Credit shall be deemed (i) a certification by the Borrower that the
representations and warranties incorporated by reference in Section 2.11(c) of this Agreement
are correct in all material respects as of the date of the drawing, and (ii) a certification by the
Borrower that it is in all other respects in compliance with the provisions of this Agreement.
Section 4.17. Facsimile Documents. At the request of the Borrower, the Letter of Credit
provides that demands for payment thereunder shall be presented to the Bank by facsimile. The
Borrower acknowledges and assumes all risks relating to the use of such facsimile demands for
payment and agrees that its obligations under this Agreement, the Credit Agreement and the
other Related Documents shall remain absolute, unconditional and irrevocable if the Bank
honors such facsimile demands for payment.
Section 4.18. Counterparts. This Agreement may be executed in counterparts by the
parties hereto, and each such counterpart shall be considered an original and all shall constitute
one and the same instrument.
Section 4.19. Government Regulations. Borrower shall (a) ensure that no person who
owns a controlling interest in or otherwise controls the Borrower is or shall be listed on the
Specially Designated Nationals and Blocked Person List or other similar lists maintained by the
Office of Foreign Assets Control ("OFAC"), the Department of the Treasury or included in any
Executive Orders, that prohibits or limits Bank from making any advance or extension of credit
to Borrower or from otherwise conducting business with Borrower and (b) ensure that the Bond
proceeds shall not be used to violate any of the foreign asset control regulations of OFAC or any
enabling statute or Executive Order relating thereto. Further, Borrower shall comply, and cause
any of its subsidiaries to comply, with all applicable Bank Secrecy Act ("BSA") laws and
regulations, as amended. Borrower agrees to provide documentary and other evidence of
Borrower's identity as may be requested by Bank at any time to enable Bank to verify Borrower's
identity or to comply with any applicable law or regulation, including, without limitation,
Section 326 of the USA Patriot Act of 2001,31 U.S.C. Section 5318.
Section 4.20. Submission to Jurisdiction; Waiver of Jury Trial. The Borrower hereby
submits to the nonexclusive jurisdiction of any state or federal court located in the Borough of
Manhattan, City of New York, State of New York for purposes of all legal proceedings arising
out of or relating to this Agreement, the other Related Documents or the transactions
contemplated hereby or thereby. The Borrower irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such proceeding brought in
such a court has been brought in an inconvenient forum. The Borrower and the Bank each
hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of
or relating to any Related Document or the transactions contemplated thereby.
15
(NY) 2701 l/084/LC.FEB 2O 2/FORSYTH DOCUMENTS/Forsyth Reimbursement Agreement doe
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
PACIFICORP, as Borrower
By t\
Name: Bruce N. Williams
Title: Vice President and Treasurer
Signature Page to
Reimbursement Agreement
(NY) 2701 1/084/LC.FEB.2012/FORSYTII DOCUMENTS/Forsyth Reimbursement Agreementdoc
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as of the date
first above written.
JPMORGAN CHASE BANK, N.A., as Issuing Bank
By ____
Name: uan Jave a
Title: Executive Director
Signature Page to
Reimbursement Agreement
(NY) 2701 l/084/LC.FER.201 2/FORSYTH DOCUMENTS/Forsyth Reimbursement Agreement.doc
EXHIBIT A
TO
REIMBURSEMENT AGREEMENT
FORM OF LETTER OF CREDIT
(NY) 2701 1/084/LC.FEB.2Q12/FORSyTH DOCUMENTS/Forsyth Reimbursement Agreement.doe
REIMBURSEMENT AGREEMENT
dated as of April 18, 2012
by and between
PACIFICOR.P
and
JPMORGAN CHASE BANK, N.A.
$45,000,000
Emery County, Utah
Pollution Control Revenue Refunding Bonds (PacifiCorp Project)
Series 1991
(NY) 2101 1/084ILc.FEa.2o12/EMERy DOCUMENTS/Emery Reimbursement AgTeement.doc
Table of Contents
ARTICLE I DEF[NITIONS........................................ 1
Section 1.01 Certain Defined Terms........................... 1
Section 1.02 Relation to Other Documents................. 3
ARTICLE II AMOUNT AND TERMS OF THE LETTER OF CREDIT .4
Section 2.01 The Letter of Credit .............................................................................................4
Section 2.02 Letter of Credit Drawings.................................................................................... 4
Section2.03 Term ..................................................................................................................... 4
Section 2.04 Reimbursement of Drawings ............................................................................... 4
Section2.05 Fees ..................................................................................................................... 4
Section 2.06 Method of Payment; Etc . ..................................................................................... 4
Section 2.07 Computation of Fees. ............................................................................................ 4
Section 2.08 Payment Due on Non-Business Day to Be Made on Next Business Day ...........4
Section2.09 Source of Funds ................................................................................................... 5
Section 2.10 Electronic Transmission....................................................................................... 5
Section 2.11 Credit Agreement................................................................................................. 5
Section 2.12 Extension of the Expiration Date......................................................................... 6
Section2.13 Remedies .............................................................................................................. 6
ARTICLE III CONDITIONS OF ISSUANCE............................................................................6
Section 3.01 Conditions Precedent to Issuance of the Letter of Credit....................................6
ARTICLE IV MISCELLANEOUS ...........................................................................................7
Section 4.01 Modification of this Agreement ......................................................................... ..7
Section 4.02 Waiver of Rights by the Bank .............................................................................. 7
Section4.03 Notices, Etc . ........................................................................................................ 7
Section4.04 No Remedies ...................................................................................................... 9
Section 4.05 No Deductions; Increased Costs ........................................................................... 9
Section4.06 Right of Set Off .................................................................................................. 11
Section4.07 Indemnity .................................................................................................... 11
Section 4.08 Obligations Absolute ........................................................................................ 12
Section 4.09 Liability of the Bank.......................................................................................... 12
Section 4.10 Successors and Assigns...................................................................................... 14
Section4.11 Headings ............................................................................................................ 14
Section 4.12 Severability .................................................................................................... 14
Section4.13 Governing Law .................................................................................................. 14
Section 4.14 Continuing Obligation ....................................................................................... 14
Section 4.15 Entire Agreement............................................................................................... 15
Section 4.16 Drawing a Certification ...................................................................................... 15
Section 4.17 Facsimile Documents......................................................................................... 15
Section4.18 Counterparts ...................................................................................................... 15
(NY) 27011 /0841LC.FEB 201 2/EMERY DOCUMENTS/Emery Reimbursement Agreemenl.doc
Section 4.19 Government Regulations .15
Section 4.20 Submission to Jurisdiction; Waiver of Jun' Trial..............................................15
EXHIBIT A FORM OF IRREVOCABLE LETTER OF CREDIT
11
(NY) 2701 I/0841LC.FES.201 2/EMERY DOCUMENTS/Emery Reimbursement Agreement doe
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT, dated as of April 18, 2012, by and between
PACIFICORP, an Oregon corporation, and JPMORGAN CHASE BANK, N.A., as the issuer of
the hereinafter described Letter of Credit.
RECITALS:
(1)Whereas, the Borrower (such term and each other capitalized term used herein
having the meaning set forth in Article I hereof) desires to secure a source of funds to be devoted
exclusively to the payment by the Trustee, when and as due, of the principal of and interest on
the Bonds, and has applied to the Bank for issuance by the Bank of the Letter of Credit in an
original stated amount of $45,961,644.
(2)The Borrower has entered into the Credit Agreement.
(3)The Issuer has heretofore issued the Bonds pursuant to the Indenture.
(4)The Issuer and the Borrower have entered into the Loan Agreement pertaining to
the Bonds.
(5)Under the Loan Agreement the Borrower has agreed to cause the Bonds to be
secured by an irrevocable direct pay letter of credit
(6)The Bank has agreed to issue the Letter of Credit subject to the following terms
and conditions.
NOW, THEREFORE, in consideration of the premises, including the benefits to be
realized by Borrower as above described, and in order to induce the Bank to issue the Letter of
Credit, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms. Unless otherwise defined in this Agreement, terms
defined in the Credit Agreement shall have the meanings respectively indicated therein. As used
in this Agreement, the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"Administrative Agent" means JPMorgan Chase Bank, N.A. in its capacity as
Administrative Agent under the Credit Agreement, and its successors in such capacity.
"Available Amount" means the total amount available to be drawn under the Letter of
Credit, as the same may be reduced and reinstated from time to time in accordance with the
provisions of the Letter of Credit.
(NY) 2701 1/084/LC.FEB.201 2/EMERY DOCUMENTS/Emery Reimbursement Agreementdoe
"Bank" means JPMorgan Chase Bank, N.A., as issuer of the Letter of Credit, and its
successors and assigns, and as Issuing Bank under the Credit Agreement.
"Bond Documents" means (i) the Indenture, (ii) the Loan Agreement, (iii) the
Remarketing Agreement and (iv) any other document executed by the Borrower in connection
with the issuance, reoffering or sale of the Bonds.
"Bonds" or "Bonds" means Issuer's $45,000,000 Emery County, Utah Pollution Control
Revenue Refunding Bonds (PacifiCorp Project) Series 1991.
"Borrower" means PacifiCorp, an Oregon corporation, and its successors and assigns.
"Business Day" has the meaning assigned thereto in the Letter of Credit.
"Closing Date" means the date on which the Letter of Credit is issued.
"Control Agreement" means the Control Agreement dated as of April 18, 2012 among
the Borrower, the Bank and the Trustee as amended or supplemented and restated from time to
time.
"Costs" has the meaning assigned thereto in Section 4.07.
"Credit Agreement" means that certain Amended and Restated Credit Agreement dated
as of July 6, 2006, among the Borrower, various banks identified therein, the Administrative
Agent and The Royal Bank of Scotland plc, as Syndication Agent, as amended or supplemented
from time to time.
"Dodd-Frank Act" means the Dodd-Frank Wall Street Reform and Consumer Protection
Act of 2010, as enacted by the United States Congress, and signed into law on July 21, 2010, and
all statutes, rules, guidelines or directives promulgated thereunder.
"Expiration Date" has the meaning assigned to such term in the Letter of Credit.
"Fee Letter" means the fee letter dated April 18, 2012 between the Borrower and the
"Governmental Authority" means any nation or government, any state, department,
agency or other political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to any government, and any
corporation or other entity owned or controlled (through stock or capital ownership or otherwise)
by any of the foregoing.
"Indenture" means that certain Trust Indenture dated as of May 1, 1991 between the
Issuer and the Trustee, as amended, supplemented and restated through and including the date
hereof.
"ISP" or "1SP98" means, International Standby Practices 1998 (International Chamber of
Commerce Publication No. 590).
2
(NY) 27011 /0841LC.FEB.201 2/EMERY DOCUMENTS/Emery Reimbursement Agreement.doc
"Issuer" means Emery County, Utah, and its lawful successors and assigns.
"Letter of Credit" means the irrevocable direct pay letter of credit issued by the Bank to
the Trustee to secure payment of the Bonds, substantially in the form of Exhibit A attached
hereto.
"Loan Agreement" means the Loan Agreement dated as of May 1, 1991 between the
Borrower and the Issuer, as amended, supplemented and restated through and including the date
hereof.
"Official Statement" means the Supplement to Official Statement dated April 16, 2012
relating to the Bonds, together with the documents incorporated therein by reference.
"Payment Document" has the meaning assigned thereto in Section 4.08.
"Pledge Agreement" means the Pledge Agreement dated as of April 18, 2012 between the
Borrower and the Bank, as amended or supplemented from time to time.
"Pledged Bonds" has the meaning assigned thereto in the Indenture.
"Related Documents" means this Agreement, the Letter of Credit, the Fee Letter, the
Bond Documents, the Pledge Agreement, the Control Agreement, the Credit Agreement and any
other agreement or instrument relating thereto.
"Remarketing Agent" means the placement or remarketing agent at the time serving as
such under the Remarketing Agreement and designated as the Remarketing Agent for purposes
of the Indenture. The current Remarketing Agent is J.P. Morgan Securities LLC.
"Remarketing Agreement" means the Remarketing Agreement dated May 1, 2001
between the Borrower and the Remarketing Agent, as from time to time amended or
supplemented, or if such Remarketing Agreement shall be terminated, then such other agreement
which may from time to time be entered into with any Remarketing Agent with respect to the
remarketing or placement of the Bonds.
"Stated Expiration Date" has the meaning assigned thereto in the Letter of Credit.
"Trustee" means The Bank of New York Mellon Trust Company, N.A., as trustee under
the Indenture, or any further successor trustee under the Indenture.
Section 1.02 Relation to Other Documents. Nothing in this Agreement shall be deemed
to amend, or relieve the Borrower of any of its obligations under, the Credit Agreement or any
other Related Document. To the extent any provision of this Agreement conflicts with any
provision of the Credit Agreement, the provisions of this Agreement shall control as between the
Borrower and the Bank. For avoidance of doubt, nothing herein shall affect the rights or
obligations of any other "Bank" party to the Credit Agreement.
3
(NY) 27011/084/LC.FEB.2012/EMERY DOCUMENTS/Emery Reimbursement Agreement.doc
ARTICLE II
AMOUNT AND TERMS OF THE LETTER OF CREDIT
Section 2.01 The Letter of Credit. Subject to the terms and conditions of this
Agreement, the Bank agrees to issue the Letter of Credit to the Trustee as beneficiary on the
Closing Date. The Letter of Credit shall be in the original stated amount of $45,961,644
consisting of $45,000,000 to pay principal of the Bonds, plus (ii) 65 days' interest on said
principal amount computed at the rate of twelve percent (12%) per annum calculated on the basis
of a 365 day year and actual days elapsed, in the amount of $961,644.
Section 2.02 Letter of Credit Drawings. The Trustee is authorized to make drawings
under the Letter of Credit in accordance with the terms thereof. The Borrower hereby directs the
Bank to make payments under the Letter of Credit in the manner therein provided. The
Borrower hereby irrevocably approves reductions and reinstatements of the Available Amount as
provided in the Letter of Credit.
Section 2.03 Term. The Letter of Credit will expire as provided in the Letter of Credit.
Section 2.04 Reimbursement of Drawings. The Borrower agrees to reimburse the Bank
for the full amount of any drawing made under the Letter of Credit upon payment by the Bank of
each such drawing on the date specified pursuant to Section 2.17(c) of the Credit Agreement. If
the Borrower does not make such reimbursement on such date, such reimbursement obligation
shall bear interest at the applicable rate per annum specified in the Credit Agreement.
Section 2.05 Fees. The Borrower hereby agrees to pay to the Bank non-refundable fees
as provided in the Fee Letter.
Section 2.06 Method of Payment; Etc. All payments to be made by the Borrower under
this Agreement shall be made at the Chicago office of the Bank not later than 2:00 P.M.
(Chicago time) on the date when due and shall be made in lawful money of the United States of
America in freely transferable and immediately available funds in accordance with the wiring
instructions below (as such instructions may be modified from time to time by notice from the
Bank to the Borrower):
JPMorgan Chase Bank, N.A.
ABA# 02100021
Credit Account #: 324331754
Credit Account Name: Global Trade Services - Chicago
OBI Reference: L/C No. CPCS-358995
Attention: Standby L/C Unit
Section 2.07. Computation of Fees. All computations of fees payable by the Borrower
under this Agreement shall be made on the basis of a 360-day year and actual days elapsed.
Section 2.08. Payment Due on Non-Business Day to Be Made on Next Business Day. If
any sum becomes payable pursuant to this Agreement on a day which is not a Business Day, the
4
(NY) 2701 1/084/LC.FEJ32Ol2/EMlRy DOCUMENTS/Emery Reimbursement Agreemcnt.doc
date for payment thereof shall be extended, without penalty, to the next succeeding Business Day,
and such extended time shall be included in the computation of interest and fees.
Section 2.09. Source of Funds. All payments made by the Bank pursuant to the Letter
of Credit shall be made from funds of the Bank, and not from the funds of any other Person.
Section 2.10. Electronic Transmissions. The Bank is authorized to accept and process
any amendments, transfers, assignments of proceeds, instructions, consents, waivers and all
documents relating to the Letter of Credit which are sent to Bank by electronic transmission,
including SWIFT, electronic mail, telex, telecopy, telecopy, courier, mail or other computer
generated telecommunications and such electronic communication shall have the same legal
effect as if written and shall be binding upon and enforceable against the Borrower. The Bank
may, but shall not be obligated to, require authentication of such electronic transmission or that
the Bank receives original documents prior to acting on such electronic transmission.
Section 2.11 Credit Agreement. (a) The Borrower has requested the Bank to issue the
Letter of Credit pursuant to the terms and conditions of the Credit Agreement, including, without
limitation, Section 2.17 thereof. The parties hereto covenant and agree that the provisions of the
Credit Agreement shall apply to and govern with respect to the issuance of the Letter of Credit,
the Letter of Credit Liabilities arising as a result thereof and all other matters relating thereto.
(b)The Borrower acknowledges and agrees that for all purposes hereunder and under the
Credit Agreement, including without limitation for purposes of determining the Payment Date
and the date from which interest shall accrue on any Reimbursement Obligation under Section
2.17(c) of the Credit Agreement, (1) the Borrower shall be deemed to have notice of any drawing
on the Letter of Credit pursuant to (i) an Interest Drawing Certificate in the form of Annex C to
the Letter of Credit or (ii) a Redemption Drawing Certificate in the form of Annex D to the
Letter of Credit on the Business Day preceding such drawing and (2) the Borrower shall be
deemed to have notice of any drawing on the Letter of Credit pursuant to (i) a Liquidity
Certificate in the form of Annex E to the Letter of Credit, (ii) an Acceleration Drawing
Certificate in the form of Annex F to the Letter of Credit or (iii) a Stated Maturity Drawing
Certificate in the form of Annex G to the Letter of Credit by 10:00 A.M. (New York City time)
on the date of such drawing.
(c)The Borrower hereby represents and warrants that:
(1)after the issuance of the Letter of Credit, the Total Outstanding Amount will not
exceed the Total Commitment;
(2)immediately prior to and after the issuance of the Letter of Credit, no Default
shall have occurred and be continuing under the Credit Agreement;
(3)the representations and warranties of the Borrower contained in the Bond
Documents and in the Credit Agreement are true on and as of the date of issuance of the Letter of
Credit, before and after giving effect to such issuance, as though made on and as of such date;
and
5
(NY) 27011 /0841LC.FEB.201 2/EMERY DOCUMENTS/Emery Reimbursement Agreement.doc
(4) No petition by or against the Borrower has at any time been filed under the United
States Bankruptcy Code or under any similar act.
Section 2.12 Extension of the Expiration Date. (a) At any time there shall remain no
less than ninety (90) days to the then current Stated Expiration Date of the Letter of Credit, the
Borrower may request the Bank to extend the then current Stated Expiration Date for a period of
one year. If the Bank, in its sole discretion, elects to extend the Stated Expiration Date then in
effect, the Bank shall give written notice of such election to extend to the Borrower and the
Trustee within thirty (30) days of receipt of such extension request from the Borrower, it being
understood and agreed that the failure of the Bank to notify the Borrower and the Trustee of any
decision within such 30-day period shall be deemed to be a rejection of such request and the
Bank shall not incur any liability or responsibility whatsoever by reason of the Bank's failure to
notify such parties within such 30-day period. The Bank's consent to any such extension of the
Stated Expiration Date shall be conditioned upon the preparation, execution and delivery of
documentation in form and substance satisfactory to the Bank and its counsel. Any date to
which the Stated Expiration Date has been extended in accordance with this Section 2.12 may be
extended in like manner.
(b) Upon any extension of the Stated Expiration Date pursuant to this Section 2.12, the
Bank and the Borrower each reserves the right to renegotiate any provision hereof.
Section 2.13 Remedies. Upon the occurrence of any Event of Default, the Bank may,
in addition to any other remedies provided by applicable law or by the Credit Agreement or any
other Related Document, give notice of the occurrence of an Event of Default to the Trustee,
directing the Trustee to accelerate the Bonds pursuant to Section 9.02(a) of the Indenture.
ARTICLE III
CONDITIONS OF ISSUANCE
Section 3.01 Conditions Precedent to Issuance of the Letter of Credit. The obligation of
the Bank to issue the Letter of Credit is subject to the conditions precedent that the Bank shall
have received on or before the date of the issuance of the Letter of Credit the following items,
each dated such date, in form and substance satisfactory to the Bank, that the other conditions
described below shall have been satisfied and that the costs, expenses and fees due and payable
under Section 2.05 and 4.07 hereof shall have been paid:
(a)The Issuer, the Borrower and the Trustee shall have duly authorized, executed and
delivered the Bond Documents, all in form and substance satisfactory to the Bank and its counsel.
(b)The Bonds shall have been duly reoffered and sold pursuant to the Remarketing
Agreement.
(c)The representations and warranties contained in the Credit Agreement and in the
Bond Documents shall be true on the Closing Date with the same effect as though made on and
as of that date, and no condition, event or act shall have occurred and be continuing which
constitutes a Default under the Credit Agreement.
6
(NY) 27011 /084/LC.FEB.201 2/EMERY DOCUMENTS/Emery Reimbursement Agreement.doc
(d)The Bank shall have received from counsel for the Borrower an opinion in form
and substance satisfactory to it as to such matters relating to the Related Documents as it may
reasonably request.
(e)The Bank shall have received from Bond Counsel an approving opinion in
substantially the form attached to the Official Statement.
(I) All proceedings taken in connection with the execution and delivery of the Bonds
shall be reasonably satisfactory to the Bank and the Bank shall have received copies of such
certificates, documents and papers as reasonably requested in connection therewith, all in form
and substance reasonably satisfactory to the Bank. The Borrower shall supply to the Bank copies
certified by the secretary or an assistant secretary of the Borrower of corporate resolutions in
form and substance reasonably satisfactory to the Bank with respect to the authorization of the
Related Documents and the execution thereof by the Borrower, a certificate of the Secretary or
an Assistant Secretary of the Borrower certifying the names and true signatures of the officers of
the Borrower authorized to sign this Agreement and the other Related Documents to which it is a
party, the Articles of Incorporation and By-Laws of the Borrower, together with all amendments
thereto, and a copy of a certificate issued by the Secretary of State of the State of Oregon issued
no more than 30 days preceding the Closing Date, stating that the Borrower is in good standing
in the State of Oregon.
(g) No law, regulation, ruling or other action of the United States, the State of New
York or any political subdivision therein or thereof shall be in effect or shall have occurred, the
effect of which would be to prevent the Bank from fulfilling its obligations under this Agreement.
ARTICLE IV
MISCELLANEOUS
Section 4.01. Modification of this Agreement. No amendment, modification or waiver
of any provision of this Agreement shall be effective unless the same shall be in writing and
signed by the Bank and the Borrower and no amendment, modification or waiver of any
provision of the Letter of Credit shall in any event be effective unless the same shall be in
writing and signed by the Bank. Any such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand on the Borrower
in any case shall entitle the Borrower to any other or further notice or demand in the same,
similar or other circumstances.
Section 4.02. Waiver of Rights by the Bank. No course of dealing or failure or delay on
the part of the Bank in exercising any right, power or privilege hereunder or under the Letter of
Credit or this Agreement shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise or the exercise of any other right or privilege. The
rights of the Bank under the Letter of Credit and the rights of the Bank under this Agreement are
cumulative and not exclusive of any rights or remedies that the Bank would otherwise have.
Section 4.03 Notices, Etc. All notices and other communications provided for hereunder
shall be in writing (including telecopier communication or other electronic means if
(NY) 2701 1/084fLC.FEB2012/EMERy DOCUMENTS/Emery Reimbursement Agreement.doc
accompanied by telephonic confirmation of receipt) and mailed, telecopied or delivered as
follows:
If to the Borrower, at:
PacifiCorp
825 N .E. Multnomah St., Suite 1900
Portland, Oregon 97232
Attention: Vice President and Treasurer
Facsimile No.: [phone]
If to the Bank, at:
JPMorgan Chase Bank, N.A.
1 Chase Manhattan Plaza, Floor 03
New York, NY 10005-1401
Facsimile No.: [phone]
Telephone No.: [phone]
Attention: Regina Bruni
With a copy to the Bank,
Standby Letter of Credit Unit:
JPMorgan Chase Bank, N.A.
131 South Dearborn
5th Floor, Mail Code IL 1-0236
Standby Letter of Credit Unit
Chicago, 1160603-5506
Facsimile No.: [phone]
Telephone No.: [phone], Option 1
Attention: Standby Service Unit
If to the Remarketing Agent, at:
J.P. Morgan Securities LLC
383 Madison Avenue, 8th Floor
New York, NY 10179
Facsimile No.: [phone]
Telephone No.: [phone]
Attention: Michael R. Altman
If to the Trustee, to
The Bank of New York Mellon Trust Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Facsimile No.: [phone]
8
(NY) 2701 1/0841LC.FEB.2O12IEMERY DOCUMENTS/Emery Reimbursement Agreement.doc
Telephone No.: [phone]
Attention: Corporate Trust
or, as to each party, at such other address as shall be designated by such party in a written notice
to the other party. All such notices and communications shall, when mailed or telecopied, be
effective when deposited in the mails or telecopied, respectively, addressed as aforesaid, except
that notices to the Bank shall not be effective until received by the Bank.
Section 4.04 No Remedies. No failure on the part of the Bank to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
Section 4.05 No Deductions; Increased Costs. (a) Except as otherwise required by law,
each payment by the Borrower to the Bank under this Agreement or any other Related Document
shall be made without setoff or counterclaim and without withholding for or on account of any
present or future taxes (other than overall net income taxes on the recipient imposed by any
jurisdiction having control of such recipient) imposed by or within the jurisdiction in which the
Borrower is domiciled, any jurisdiction from which the Borrower makes any payment hereunder,
or (in each case) any political subdivision or taxing authority thereof or therein. If any such
withholding is so required, the Borrower shall make the withholding, pay the amount withheld to
the appropriate Governmental Authority before penalties attach thereto or interest accrues
thereon and forthwith pay such additional amount as may be necessary to ensure that the net
amount actually received by the Bank free and clear of such taxes (including such taxes on such
additional amount) is equal to the amount which the Bank would have received had such
withholding not been made. If the Bank pays any amount in respect of any such taxes, penalties
or interest, the Borrower shall reimburse the Bank for that payment on demand in the currency in
which such payment was made. If the Borrower pays any such taxes, penalties or interest, it
shall deliver official tax receipts evidencing that payment or certified copies thereof to the Bank
on or before the thirtieth day after payment.
(b) If the Internal Revenue Code or any newly adopted law, treaty, regulation,
guideline or directive, or any change in any, law, treaty, regulation, guideline or directive or any
new or modified interpretation of any of the foregoing by any authority or agency charged with
the administration or interpretation thereof or any central bank or other fiscal, monetary or other
authority having jurisdiction over the Bank or the transactions contemplated by this Agreement,
whether or not having the force of law (each a "Change in Law") shall:
(i) limit the deductibility of interest on funds obtained by the Bank to pay
any of its liabilities or subject the Bank to any tax, duty, charge, deduction or withholding on or
with respect to payments relating to the Bonds, the Letter of Credit or this Agreement, or any
amount paid or to be paid by the Bank as the issuer of the Letter of Credit (other than any tax
measured by or based upon the overall net income of the Bank imposed by any jurisdiction
having control over the Bank);
9
(NY) 270 I I/084/LC FEB201 2/EMERY DOCUMENTS/Emery Reimbursement Agreementdoc
(ii)impose, modify, require, make or deem applicable to the Bank any reserve
requirement, capital requirement, special deposit requirement, insurance assessment or similar
requirement against any assets held by, deposits with or for the account of, or loans, letters of
credit or commitments by, an office of the Bank;
(iii)change the basis of taxation of payments due the Bank under this
Agreement or the Bonds (other than by a change in taxation of the overall net income of the
Bank);
(iv)cause or deem letters of credit to be assets held by the Bank and/or as
deposits on its books; or
(v)impose upon the Bank any other condition with respect to any amount
paid or payable to or by the Bank or with respect to this Agreement or any of the other Related
Documents;
and the result of any of the foregoing is to increase the cost to the Bank of making any payment
or maintaining the Letter of Credit, or to reduce the amount of any payment (whether of principal,
interest or otherwise) receivable by the Bank, or to reduce the rate of return on the capital of the
Bank or to require the Bank to make any payment on or calculated by reference to the gross
amount of any sum received by it, in each case by an amount which the Bank in its reasonable
judgment deems material, then:
(1)the Bank shall promptly notify the Borrower in writing of such event;
(2)the Bank shall promptly deliver to the Borrower a certificate stating the
change which has occurred or the reserve requirements or other costs or conditions which have
been imposed on the Bank or the request, direction or requirement with which it has complied,
together with the date thereof, the amount of such increased cost, reduction or payment and a
reasonably detailed description of the way in which such amount has been calculated, and the
Bank's determination of such amounts, absent fraud or manifest error, shall be conclusive; and
(3)the Borrower shall pay to the Bank, from time to time as specified by the
Bank, such an amount or amounts as will compensate the Bank for such additional cost,
reduction or payment.
The protection of this Section 4.05(b) shall be available to the Bank regardless of any possible
contention of invalidity or inapplicability of the law, regulation or condition which has been
imposed; provided, however, that if it shall be later determined by the Bank that any amount so
paid by the Borrower pursuant to this Section 4.05(b) is in excess of the amount payable under
the provisions hereof, the Bank shall refund such excess amount to the Borrower.
Notwithstanding the foregoing, for purposes of this Agreement (a) all requests, rules, guidelines
or directives in connection with the Dodd-Frank Act shall be deemed to be a Change in Law,
regardless of the date enacted, adopted or issued, and (b) all requests, rules, guidelines or
directives promulgated by the Bank for International Settlements, the Base! Committee on
Banking Regulations and Supervisory Practices (or any successor or similar authority) or any
10
(NY) 270 I/084/LC.FEB.2012/EMERY DOCUMENTS/Emery Reimbursement Agreeinent.doc
Governmental Authority shall be deemed a Change in Law regardless of the date enacted,
adopted or issued.
Section 4.06 Right of Setoff. (a) Upon the occurrence and during the continuance of an
Event of Default, the Bank is hereby authorized at any time and from time to time without notice
to the Borrower (any such notice being expressly waived by the Borrower), and to the fullest
extent permitted by law, to setoff, to exercise any banker's lien or any right of attachment and
apply any and all balances, credits, deposits (general or special, time or demand, provisional or
final except those accounts established for the benefit of third parties or to satisfy legal or
regulatory requirements), accounts or monies at any time held and other indebtedness at any time
owing by the Bank to or for the account of the Borrower (irrespective of the currency in which
such accounts, monies or indebtedness may be denominated and the Bank is authorized to
convert such accounts, monies and indebtedness into United States dollars) against any and all of
the Obligations of the Borrower, whether or not the Bank shall have made any demand for any
amount owing to the Bank by the Borrower.
(b) The rights of the Bank under this Section 4.06 are in addition to, in augmentation
of, and, except as specifically provided in this Section 4.06, do not derogate from or impair,
other rights and remedies (including, without limitation, other rights of setoff) which the Bank
may have.
Section 4.07 Indemnity. The Borrower shall indemnify and hold harmless the Bank, its
parent, and correspondents and each of their respective directors, officers, employees and agents
(each, including the Bank, an "Indemnified Person") from and against any and all claims, suits,
judgments, costs, losses, fines, penalties, damages, liabilities, and expenses, including expert
witness fees and reasonable legal fees, charges and disbursements of retained counsel for any
Indemnified Person ("Costs"), arising out of, in connection with, or as a result of: (i) the Letter of
Credit or any pre-advice of its issuance; (ii) any transfer, sale, delivery, surrender, or
endorsement of any Payment Document at any time(s) held'by any Indemnified Person in
connection with the Letter of Credit; (iii) any action or proceeding arising out of or in connection
with the Letter of Credit, this Agreement or any other Related Document (whether administrative,
judicial or in connection with arbitration), including any action or proceeding to compel or
restrain any presentation or payment under the Letter of Credit, or for the wrongful dishonor of
or honoring a presentation under the Letter of Credit; (iv) any independent undertakings issued
by the beneficiary of the Letter of Credit; (v) any unauthorized communication or instruction
(whether oral, telephonic, written, telegraphic, facsimile or electronic) (each an "Instruction")
regarding the Letter of Credit or error in computer transmission; (vi) an adviser, confirmer or
other nominated person seeking to be reimbursed, indemnified or compensated; (vii) any third
party seeking to enforce the rights of an Borrower, beneficiary, nominated person, transferee,
assignee of proceeds of the Letter of Credit; (viii) the fraud, forgery or illegal action of parties
other than the Indemnified Person; (ix) the enforcement of this Agreement or any rights or
remedies under or in connection with this Agreement, a Related Document or the Letter of Credit;
(x) the acts or omissions, whether rightful or wrongful, of any present or future de jure or de
facto governmental or regulatory authority or cause or event beyond the control of such
Indemnified Person; in each case, including that resulting from Bank's own negligence, provided,
however, that such indemnity shall not be available to any Person claiming indemnification
under (i) through (x) above to the extent that such Costs are found in a final, non-appealable
11
(NY) 2701 1/0841LC.FEB.20 I 2/EMERY DOCUMENTS/Emery Reimbursement Agreementdoc
judgment by a court of competent jurisdiction to have resulted directly from the gross negligence
or willful misconduct of the Indemnified Person claiming indemnity. If and to the extent that the
obligations of Borrower under this paragraph are unenforceable for any reason, Borrower shall
make the maximum contribution to the Costs permissible under applicable law.
Section 4.08 Obligations Absolute. The obligations of the Borrower under this
Agreement shall be absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances whatsoever, including,
without limitation: (i) any lack of validity, enforceability or legal effect of this Agreement or any
Related Document, or any term or provision herein or therein; (ii) payment against presentation
of any draft, demand or claim for payment under the Letter of Credit or other document
presented for purposes of drawing under the Letter of Credit (a "Payment Document") that does
not comply in whole or in part with the terms of the Letter of Credit or which proves to be
fraudulent, forged or invalid in any respect or any statement therein being untrue or inaccurate in
any respect, or which is signed, issued or presented by a Person (or a transferee of such Person)
purporting to be a successor or transferee of the beneficiary of the Letter of Credit; (iii) the Bank
or any of its branches or affiliates being the beneficiary of the Letter of Credit; (iv) the Bank or
any correspondent honoring a drawing against a Payment Document up to the amount available
under the Letter of Credit even if such Payment Document claims an amount in excess of the
amount available under the Letter of Credit; (v) the existence of any claim, set-off, defense or
other right that the Borrower or any other Person may have at any time against any beneficiary,
any assignee of proceeds, the Bank or any other Person; (vi) the Bank or any correspondent
having previously paid against fraudulently signed or presented Payment Documents (whether or
not the Borrower shall have reimbursed the Bank for such drawing); and (vii) any other event,
circumstance or conduct whatsoever, whether or not similar to any of the foregoing, that might,
but for this paragraph, constitute a legal or equitable defense to or discharge of, or provide a right
of set-off against, the Borrower's obligations hereunder (whether against the Bank, the
beneficiary or any other Person); provided, however, that subject to Section 4.09 hereof, the
foregoing shall not exculpate the Bank from such liability to the Borrower as may be finally
judicially determined in an independent action or proceeding brought by the Borrower against
the Bank following payment of the Borrower's obligations under this Agreement.
Section 4.09 Liability of the Bank. (a) The liability of the Bank (or any other
Indemnified Person) under, in connection with and/or arising out of this Agreement, any Related
Document or the Letter of Credit (or any pre-advice), regardless of the form or legal grounds of
the action or proceeding, shall be limited to any direct damages suffered by the Borrower that are
caused directly by Bank's gross negligence or willful misconduct in (i) honoring a presentation
that does not at least substantially comply with the Letter of Credit, (ii) failing to honor a
presentation that strictly complies with the Letter of Credit or (iii) retaining Payment Documents
presented under the Letter of Credit. In no event shall the Bank be deemed to have failed to act
with due diligence or reasonable care if the Bank's conduct is in accordance with Standard Letter
of Credit Practice or in accordance with this Agreement. The Borrower's aggregate remedies
against the Bank and any Indemnified Person for wrongfully honoring a presentation under the
Letter of Credit or wrongfully retaining honored Payment Documents shall in no event exceed
the aggregate amount paid by the Borrower to the Bank in respect of an honored presentation
under the Letter of Credit, plus interest. Notwithstanding anything to the contrary herein, the
Bank and the other Indemnified Persons shall not, under any circumstances whatsoever, be liable
12
(NY) 27011 /084/LC.FEB2012/EMERY DOCUMENTS/Emery Reimbursement Agreement.doc
for any punitive, consequential, indirect or special damages or losses regardless of whether the
Bank or any Indemnified Person shall have been advised of the possibility thereof or of the form
of action in which such damages or losses may be claimed. The Borrower shall take action to
avoid and mitigate the amount of any damages claimed against the Bank or any Indemnified
Person, including by enforcing its rights in the underlying transaction. Any claim by the
Borrower for damages under or in connection with this Agreement, any Related Document or the
Letter of Credit shall be reduced by an amount equal to the sum of (i) the amount saved by the
Borrower as a result of the breach or alleged wrongful conduct and (ii) the amount of the loss
that would have been avoided had the Borrower mitigated damages.
(b)Without limiting any other provision of this Agreement, the Bank and each other
Indemnified Person (if applicable), shall not be responsible to the Borrower for, and the Bank's
rights and remedies against the Borrower and the Borrower's obligation to reimburse and
indemnify the Bank shall not be impaired by: (i) honor of a presentation under the Letter of
Credit which on its face substantially complies with the terms of the Letter of Credit; (ii) honor
of a presentation of any Payment Documents which appear on their face to have been signed,
presented or issued (X) by any purported successor or transferee of any beneficiary or other party
required to sign, present or issue the Payment Documents or (Y) under a new name of the
beneficiary; (iii) acceptance as a draft of any written or electronic demand or request for payment
under the Letter of Credit, even if nonnegotiable or not in the form of a draft, and may disregard
any requirement that such draft, demand or request bear any or adequate reference to the Letter
of Credit; (iv) the identity or authority of any presenter or signer of any Payment Document or
the form, accuracy, genuineness, or legal effect of any presentation under the Letter of Credit or
of any Payment Documents; (v) disregard of any non-documentary conditions stated in the Letter
of Credit; (vi) acting upon any Instruction which it, in Good Faith, believes to have been given
by a Person or entity authorized to give such Instruction; (vii) any errors, omissions,
interruptions or delays in transmission or delivery of any message, advice or document
(regardless of how sent or transmitted) or for errors in interpretation of technical terms or in
translation; (viii) any delay in giving or failing to give any notice; (ix) any acts, omissions or
fraud by, or the solvency of, any beneficiary, any nominated Person or any other Person; (x) any
breach of contract between the beneficiary and the Borrower or any of the parties to the
underlying transaction; (xi) assertion or waiver of any provision of the ISP which primarily
benefits an issuer of a letter of credit, including, any requirement that any Payment Document be
presented to it at a particular hour or place; (xii) payment to any paying or negotiating bank
(designated or permitted by the terms of the Letter of Credit) claiming that it rightfully honored
or is entitled to reimbursement or indemnity under Standard Letter of Credit Practice; (xiii)
dishonor by the Bank of any presentation for which the Borrower is unable or unwilling to
reimburse or indemnify the Bank (provided that the Borrower acknowledges that if the Bank
shall later be required to honor the presentation, the Borrower shall be liable therefore in
accordance with Article II hereof); and (xiv) acting or failing to act as required or permitted
under Standard Letter of Credit Practice. For purposes of this Section 4.09(b), "Good Faith"
means honesty in fact in the conduct of the transaction concerned.
(c)The Borrower shall notify the Bank of (i) any noncompliance with any Instruction,
any other irregularity with respect to the text of the Letter of Credit or any amendment thereto or
any claim of an unauthorized, fraudulent or otherwise improper Instruction, within three (3)
Business Days of the Borrower's receipt of a copy of the Letter of Credit or amendment and (ii)
13
(NY) 2701 110841LC.FEB.201 2/EMERY DOCUMENTS/Emery Reimbursement Agreementdoc
any objection the Borrower may have to the Bank's honor or dishonor of any presentation under
the Letter of Credit or any other action or inaction taken or proposed to be taken by the Bank
under or in connection with this Agreement or the Letter of Credit, within three (3) Business
Days after the Borrower receives notice of the objectionable action or inaction. The failure to so
notify the Bank within said times shall discharge the Bank from any loss or liability that the
Bank could have avoided or mitigated had it received such notice, to the extent that the Bank
could be held liable for damages hereunder; provided, that, if the Borrower shall not provide
such notice to the Bank within five (5) Business Days of the date of receipt in the case of clause
(i) or ten (10) Business Days from the date of receipt in the case of clause (ii), Bank shall have
no liability whatsoever for such noncompliance, irregularity, action or inaction and the Borrower
shall be precluded from raising such noncompliance, irregularity or objection as a defense or
claim against Bank.
Section 4.10 Successors and Assigns. Whenever in this Agreement the Bank is referred
to, such reference shall be deemed to include the successors and assigns of the Bank and all
covenants, promises and agreements by or on behalf of the Borrower which are contained in this
Agreement shall inure to the benefit of such successors and assigns. The rights and duties of the
Borrower hereunder, however, may not be assigned or transferred, except as specifically
provided in this Agreement or with the prior written consent of the Bank, and all obligations of
the Borrower hereunder shall continue in full force and effect notwithstanding any assignment by
the Borrower of any of its rights or obligations under any of the Related Documents or any
entering into, or consent by the Borrower to, any supplement or amendment to any of the Related
Documents.
Section 4.11. Headings. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
Section 4.12. Severability. Any provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or non-authorization without invalidating the
remaining provisions hereof or affecting the validity, enforceability or legality of such provision
in any other jurisdiction. The parties shall endeavor in good faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable provisions.
Section 4.13. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
Section 4.14. Continuing Obligation. This Agreement is a continuing obligation, shall
survive the expiration of the Letter of Credit until amounts owed hereunder and under the Credit
Agreement are paid in full and shall (a) be binding upon the Borrower, its successors and assigns,
and (b) inure to the benefit of and be enforceable by the Bank and its successors, transferees and
assigns. The obligation of the Borrower to reimburse the Bank pursuant to Sections 4.05 and
4.07 hereof shall survive the payment of the Bonds and termination of this Agreement.
14
(NY) 2701 1/084/LC.FEB.201 2/EMERY DOCUMENTS/Emery Reimbursement Agreement.doe
Section 4.15. Entire Agreement. The Related Documents constitute the entire
understanding of the parties with respect to the subject matter thereof and any prior agreements,
whether written or oral, with respect thereto are superseded hereby.
Section 4.16. Drawing a Certification. Each drawing by the Trustee or any agent thereof
under the Letter of Credit shall be deemed (i) a certification by the Borrower that the
representations and warranties incorporated by reference in Section 2.11(c) of this Agreement
are correct in all material respects as of the date of the drawing, and (ii) a certification by the
Borrower that it is in all other respects in compliance with the provisions of this Agreement.
Section 4.17. Facsimile Documents. At the request of the Borrower, the Letter of Credit
provides that demands for payment thereunder shall be presented to the Bank by facsimile. The
Borrower acknowledges and assumes all risks relating to the use of such facsimile demands for
payment and agrees that its obligations under this Agreement, the Credit Agreement and the
other Related Documents shall remain absolute, unconditional and irrevocable if the Bank
honors such facsimile demands for payment.
Section 4.18. Counterparts. This Agreement may be executed in counterparts by the
parties hereto, and each such counterpart shall be considered an original and all shall constitute
one and the same instrument.
Section 4.19. Government Regulations. Borrower shall (a) ensure that no person who
owns a controlling interest in or otherwise controls the Borrower is or shall be listed on the
Specially Designated Nationals and Blocked Person List or other similar lists maintained by the
Office of Foreign Assets Control ("OFAC"), the Department of the Treasury or included in any
Executive Orders, that prohibits or limits Bank from making any advance or extension of credit
to Borrower or from otherwise conducting business with Borrower and (b) ensure that the Bond
proceeds shall not be used to violate any of the foreign asset control regulations of OFAC or any
enabling statute or Executive Order relating thereto. Further, Borrower shall comply, and cause
any of its subsidiaries to comply, with all applicable Bank Secrecy Act ("BSA") laws and
regulations, as amended. Borrower agrees to provide documentary and other evidence of
Borrower's identity as may be requested by Bank at any time to enable Bank to verify Borrower's
identity or to comply with any applicable law or regulation, including, without limitation,
Section 326 of the USA Patriot Act of 2001,31 U.S.C. Section 5318.
Section 4.20. Submission to Jurisdiction; Waiver of Jury Trial. The Borrower hereby
submits to the nonexclusive jurisdiction of any state or federal court located in the Borough of
Manhattan, City of New York, State of New York for purposes of all legal proceedings arising
out of or relating to this Agreement, the other Related Documents or the transactions
contemplated hereby or thereby. The Borrower irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such proceeding brought in
such a court has been brought in an inconvenient forum. The Borrower and the Bank each
hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of
or relating to any Related Document or the transactions contemplated thereby.
15
(NY) 2701 1/0841LC.FEB.20 I 2/EMERY DOCUMENTS/Emery Reimbursement Agreement.doc
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
PACIFICORP, as Borrower
By 1- LC_
Name: Bruce N. Williams
Title: Vice President and Treasurer
Signature Page to
Reimbursement Agreement
(NY) 2701 1/084/LC.FEB.20 12/EMERY DOCUMENTS/Emery Reimbursement Agreement.doc
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as of the date first
above written.
JPMORGAN CHASE BANK, N.A., as Issuing Bank
By
Name: uania lana
Title: Executive Director
Signature Page to
Reimbursement Agreement
(NY) 2701 I/084/LC.FEB.2012/EMERY DOCUMENTS/Emery Reimbursement Agreement.doe
EXHIBIT A
TO
REIMBURSEMENT AGREEMENT
FORM OF LETTER OF CREDIT
(NY) 2701 1/084/LC.FEB.2012/EMERY DOCUMENTS/Emery Reimbursement Agreement.doc