20130619Notice of Interest Change.pdf

ROCKY MOUNTAIN
HSIYEA,
201 South Main,Suite 2300
Salt Lake City, Uah 841 ll
:i''.ii'r !
: :' i;'
June 19,2013
VA OWRNIGHT DELIWRY
Idaho Public Utilities Commission
47 2 W est Washington Street
Boise,Idaho 83720
Attn: Ms. Jean Jewell
Commission Secretary
Re: Case No. PAC-E-03-I Order No. 29201
Informational Notice of Interest Rate Mode Change
Dear Commissioners:
On June 3,2013, four series of pollution control revenue bonds were remarketed in a weekly
interest mode. Previously, these bonds were in a fixed rate term mode which began June 2,
2003. For informational pu{poses, PacifiCorp (the "Company") submits to the Commission an
original and 3 verified copies of each of the following documents:
1. Reoffering Circular dated i|;4lay 22,2013
Remarketing Agreement, dated I|lIay 22,2013, among the Company and Barclays Capital
Inc., as remarketing agent for the following Bond issues:
a. $15,000,000 Sweetwater County, Wyoming Pollution Control Revenue Bonds
(PacifiCorp Project), Series 1984
b. $5,300,000 Converse County, Wyoming Environmental Improvement Revenue
Bonds (PacifiCorp Project), Series 1995
Remarketing Agreement, dated May 22,2013,among the Company and Morgan Stanley
& Co. LLC, as remarketing agent for the following Bond issues:
a. $8,500,000 City of Forsyth, Rosebud County, Montana Flexible Rate Demand
Pollution Control Revenue Bonds (PacifiCorp Colstrip Project), Series 1986
b. $22,000,000 Lincoln County, Wyoming Environmental Improvement Revenue
Bonds (PacifiCorp Project), Series 1995
'.1 9:3tr
2.
3.
Idaho Public Utilities Commission
June 19,2013
Page2
Because PacifiCorp has not issued any new securities in connection with the referenced
transactions, no Report of Securities Issued is enclosed.
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, Idaho Regulatory Manager, if you have any
questions about this leffer or the enclosed documents.
Sincerely,
&ru** J.^l'-
Tanya Sacks
Assistant Treasurer
Enclosures
Cc: Terri Carlock
Ted Weston
REOFFERING CIRCULAR - COMPOSITE REOFFERING _ NOT NEW ISSUES
On the date ofinitial issuance and delivery ofeach series ofthe Bonds, Chapman and Cutler, as Bond Counsel for each such series,
rendered its opinion that, assuming compliance with certain covenants of the Issuer and the Company, interest on the Bonds of such series was
not, under then-existing laws, includable in gross income to the owners thereoffor federal income tax to the extent, upon the conditions and
subject to the limitations described in such opinion. See APPENDICES B- I through B-4 attached hereto for a copy of each such opinion. In
connection with the conversion ofthe interest rate on each series ofthe Bonds to a weekly interest rate, as described herein, Chapman and
CutlerLLP, as Bond Counsel, will render its opinions that such conversions will not adversely affect the tax-exempt status ofthe interest on
such Bonds. See "TAX EXEMPTION" herein for a more complete discussion.
$50,800,000
COMPOSITf, REOFFERING
PACIFICORP PRO.IECTS
The Bonds of each series described in this Reoffering Circular axe limited obligations of the applicable Issuer and, except to the
extent payable from Bond proceeds and certain other moneys pledged therefor, are payable solely from and secured by a pledge ofpayments to
be made under separate Loan Agreements entered into by the applicable Issuer with, and secured by First Mortgage Bonds issued by,
PACIFICORP
On June 3,2013, the Bonds will be remarketed and will bear interest at a Weekly Interest Rate payable the frst Business Day of each
month commencing July 1,2013. The initial Weekly Interest Rate and each subsequent Weekly Interest Rate to be bome by the Bonds of each
series will be determined by the applicable Remarketing Agent. Thereafter, the interest rate on the Bonds of each series may be changed from
time to time to Daily, Weekly, Flexible or Term Interest Rates, designated and determined in accordance with the separate Indentures entered
into between the applicable Issuer and The Bank of New York Mellon Trust Company, N.A., as Trustee. The Bonds of each series are subject
to purchase at the option ofthe owners thereofand, under certain circumstances, are subject to mandatory purchase in the manner and at the
times described herein. The Bonds are subject to optional and mandatory redemption prior to maturity as described herein.
The Bonds of each series are issuable as fully registered Bonds, without coupons and will be registered in the name of Cede & Co., as
registered owner and nominee for The Depository Trust Company, New York, New York. DTC initially will act as securities depository for
the Bonds. Only beneficial interests in book-+ntry form are being offered. The Bonds of each series are issuable during any Weekly Interest
Rate Period in denominations of $100,000 and any integral multiple thereof (provided that one Bond need not be in a multiple of $100,000 but
may be in such denomination greater than $100,000 as is necessary to account for any principal amount of the Bonds not corresponding
directly with $ 100,000 denominations). So long as Cede & Co. is the registered owner of the Bonds of each series, as nominee for DTC, the
principal of and premium, if any, and interest on the Bonds of each series will be paid by the Trustee directly to DTC, which will, in turn, remit
such pal.rnents to DTC participants for subsequent disbursement to the beneficial owners of the Bonds. See "TIIE BONDS."
Price 100%
Each series of the Bonds is reoffered by the applicable Remarketing Agent referred to below, subject to prior sale, withdrawal or
modification of the offer without notice and certain other conditions. At the time of the original issuance and delivery of each series of the
Bonds, Chapman and Cutler, Bond Counsel, delivered its opinion as to the legality of such series of Bonds. Each such opinion spoke only as to
their respective dates of delivery and will not be reissued in connection with this reoffering. Certain legal matters pertaining to the adjustment
of the interest rate determination method on the Bonds will be passed upon by Chapman and Cutler LLP. Certain legal matters in connection
with the reoffering will be passed upon for the Company by Paul J. Leighton, Esq., and for the Remarketing Agents by Kutak Rock LLP. It is
expected that delivery of the Bonds to DTC will be made through the facilities of DTC on or about June 3, 2013.
$15,000,000
SWEETWATER COLTNTY, WYOMING
POLLUTION CONTROL
REVENUE BONDS
(PACIFICORP PROJECT)
SERTES 1984 (NON-AMr)
(cusrP 870487 CK91)
$5,300,000
CONVERSE COUNTY, WYOMING
ENVIRONMENTAL IMPROVEMENT
REVENUE BONDS
(PACIFICORP PROJECT)
SERIES 199s (AMT)
(cuslP 212490 ACo')
BARCLAYS
as Remarketing Agent for the
Sweetwater Bonds and Converse Bonds
$8,500,000
CITY OF FORSYTH,
ROSEBUD COUNTY, MONTANA
FLEXIBLE RATE DEMAND POLLUTION
CONTROLREVEIIUE BONDS
(PACIFICORP COLSTRIP PRO.IECT)
SERIES 1986 (AMT)
(custP 346668 DC8',)
$22,000,000
LINCOLN COUNTY, WYOMING
ENVIRONMENTAL IMPROVEMENT
REVENUE BON'DS
(PACIFICORP PROJECT)
SERTES 199s (AMT)
(cusrP 533477 AC9')
MORGAN STANLEY
as Remarketing Agent for the
Forsyth Bonds and Lincoln Bonds
Dated: May22,2013
I Copyright, American Bankers Association. CUSIP data herein is provided by Standard and Poor's CUSIP Service Bureau, a division of The McGraw-Hill
Companies, lnc. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Service. CUSIP numbers are
provided for convenience of reference only. None of the Issuers, the Company or the Remarketing Agents take any responsibility for the accuracy of such
numbers.
$15,000,000
SWEETWATER COLNTY, WYOMING
POLLUTION CONTROL REVENUE BONDS
(PACTFTCORP PROJECT)
SERTES 1984 (NON-AMT)
Interest Payment Dates: First Business Day of each calendar month
Initial Interest Payment Date: July l, 2013
Issued: December 12, 1984
Maturity: December 1, 2014
Issued: December29, 1986
Maturity: December l, 2016
Issued: November 17, 1995
Maturity: November l, 2025
Issued: November 17, 1995
Maturity: November 1, 2025
$8,500,000
CITY OF FORSYTH, ROSEBUD COT]NTY, MONTANA
FLEXIBLE RATE DEMAND
POLLUTION CONTROL REVENUE BONDS
(PACIFICORP COLSTRIP PROJECT)
SERIES 1986 (AMT)
Interest Payment Dates: First Business Day of each calendar month
Initial Interest Payment Date: July l, 2013
$5,300,000
CONVERSE COI-]NTY, WYOMING
ENVIRONMENTAL IMPROVEMENT
REVENT]E BONDS
(PACTFTCORP PROJECT)
SERTES 1995 (AMT)
Interest Payment Dates: First Business Day of each calendar month
Initial lnterest Payment Date: July 1, 2013
$22,000,000
LINCOLN COT]NTY, WYOMING
ENVIRONMENTAL IMPROVEMENT
REVENUE BONDS
(PACTFTCORP PROJECT)
SERIES 1995 (AMT)
Interest Payment Dates: First Business Day of each calendar month
Initial Interest Payment Date: July l, 2013
The information contained in this Reoffering Circular (which term, whenever used herein, shall be deemed to
include the cover, the Table of Contents, and the Appendices to this Reoffering Circular) has been obtained from the
Company and other sources deemed reliable. The Issuers have not reviewed nor approved any information in the
Reoffering Circular. No representation is made, however, as to the accuracy or completeness of such information and
nothing contained in this Reoffering Circular is, or will be relied upon as, a promise or representation by the Issuers or the
Remarketing Agents. Each Remarketing Agent has provided the following sentence (but only with respect to the Bonds
for which it is Remarketing Agent) for inclusion in this Reoflering Circular: The Remarketing Agent has reviewed the
information in this Reoffering Circular in accordance with, and as part of, its responsibilities to investors under the federal
securities laws as applied to the facts and circumstances of this transaction, but the Remarketing Agent does not guarantee
the accuracy or completeness of such information. The Trustee assumes no responsibility for this Reoffering Circular and
has not reviewed or undertaken to verify any information contained herein. The information contained in this Reoffering
Circular is subject to change without notice, and the delivery of this Reoffering Circular shall not, under any
circumstances, create any implication that there have not been changes in the affairs ofthe Issuers or the Company since
the date of this Reoffering Circular.
No broker, dealer, salesperson or any other person has been authorized by the Issuers, the Company or the
Remarketing Agents to give any information or to make any representation other than as contained in this Reoffering
Circular in connection with the offering described in it and, if given or made, such other information or representation
must not be relied upon as having been authorized by any of the foregoing. This Reoffering Circular does not constitute
an offer or reoffering of any securities other than those described on the cover page, or an offer to sell or a solicitation of
an offer to buy by any person in anyjurisdiction in which it is unlawful for such person to make such offer, solicitation or
sale.
Table of Contents
THE ISSTJERS..
THE BONDS
INTRODUCTORY STATEMENT
THE LOAN AGREEMENTS..
THE INDENTURES ...............
T}IE FIRST MORTGAGE BONDS.........
............................... 22
.........,,.................... 30
APPENDIX A
APPENDX B.I
APPENDD( B-2
APPENDIX B-3
APPENDIX 8.4
APPENDX C-I
APPENDIX C-2
APPENDIX C-3
APPENDIX C.4
APPENDIX D
PacifiCorp
Approving Opinion ofBond Counsel for the Series I 984 Bonds
Approving Opinion ofBond Counsel for the Series I 986 Bonds
Approving Opinion ofBond Counsel for the Series 1995 Convene County Bonds
Approving Opinion ofBond Counsel for the Series I 995 Lincoln County Bonds
Proposed Form ofOpinion ofBond Counsel for Change in Rate Determination Method ofthe Series 1984 Bonds
Proposed Form ofOpinion ofBond Counsel for Change in Rate Determination Method ofthe Series 1986 Bonds
Proposed Form of Opinion of Bond Counsel for Change in Rate Determination Method of the Series 1995 Converse
County Bonds
Proposed Form of Opinion of Bond Counsel for Change in Rate Determination Method ofthe Senes 1995 Lincoln
County Bonds
Form of Continuing Disclosure Agreement
THE BONDS HAVE NOT BEEN REGISTERED LINDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND TI{E INDENTURE HAS NOT BEEN QUALIFIED LNDER THE TRUST INDENTURE ACT OF 1939, AS
AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS.
IN CONNECTION WITH TFIIS REOFFERING, THE REMARKETING AGENTS MAY OVERALLOT OR
EFFECT TRANSACTIONS THAT STABILIZE OR MAINTATN TIIE MARKET PRICE OF THE BONDS AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING.
IF COMMENCED, MAY BE DISCONTINUED AT ANYTIME.
RBorrrnrnc CrncuurR
$15,000,000
SwcnrwlmR Couxrv, WYotvttNc
PollurroN CoNrRor, RnvnNuB BoNos
(PacruConr Pno.locr)
Series 1984
$5i0o,ooo
Corwrnsr CouxrY, WvovuNc
ENvInoN*TENTAL IupRovBtvtBNt
RnvrxuB Boxos
(PlcrrrConr Pno.rrcr)
Series 1995
$8,500,000
Crrv or FoRsYru,
RosBruo CouNrY, MoNraNa.
Flrxnlp Rarn Dnua,No Por.luuoN
CoNrRol RBvsNuB Bonos
(PlcrrrCoRp ColsrRlr Pno.lncr)
Series 1986
$22,000,000
Lrxcor.x CouxrY, WyourNc
ErwtRoxnaENTAL IupRovBtuBNr
RrvBNur BoNos
(PacrrrConr Pno.lrcr)
Series 1995
INTRODUCTORY STATEMENT
This Reoffering Circular is provided to fumish information in connection with the
reoffering on June 3,2013 (the "Conversion Date"), of four separate issues (each, an "lssue") of
bonds (collectively, the 'oBonds"): the $15,000,000 Sweetwater County, Wyoming Pollution
Control Revenue Bonds (PacifiCorp Project) Series 1984 (the "Series 1984 Bonds"); the
$8,500,000 City of Forsyth, Rosebud County, Montana Flexible Rate Demand Pollution Control
Revenue Bonds (PacifiCorp Colstrip Project) Series 1986 (the "Series 1986 Bonds"); the
$5,300,000 Converse County, Wyoming Environmental Improvement Revenue Bonds
(PacifiCorp Project) Series 1995 (the "Series 1995 Converse County Bonds"); and the
$22,000,000 Lincoln County, Wyoming Environmental Improvement Revenue Bonds
(PacifiCorp Project) Series 1995 (the "Series 1995 Lincoln County Bonds," and, together with
the Series 1995 Converse County Bonds, the "Series 1995 Bonds"), issued by the hereinafter
described issuers (each an "Issuer" and, collectively, the "lssuers"). The Bonds being reoffered
hereby will bear interest at a weekly interest rate (the "Weekly Interest Rate") for each series of
the Bonds. The Bonds are subject to optional purchase at the demand of the Owners and, under
certain circumstances, are subject to mandatory purchase, as described herein. The Bonds are
subject to redemption at the option of the Company and to mandatory redemption prior to their
respective dates of maturity, as described herein.
The proceeds of each series of Bonds were used by PacifiCorp, 4n Oregon corporation
(the "Compotry"), to finance a portion of its share of expenditures, including financing costs,
relating to the construction of certain air and water pollution control and solid waste disposal
facilities (each, a "Project" and collectively, the "Projects") at (i) the Jim Bridger coal-fired
steam electric generating plant located in Sweetwater County, Wyoming in the case of the
Series 1984 Bonds; (ii) the Colstrip Units 3 and 4 of the coal-fired steam electric generating plant
located in Rosebud County, Montana in the case of the Series 1986 Bonds; (iii) the Dave
Johnson coal-fired steam electric generating plant located in Converse County, Wyoming in the
case of the Series 1995 Converse County Bonds; and (iv)theNaughton coal-fired steam electric
generating plant located in Lincoln County, Wyoming in the case of the Series 1995 Lincoln
County Bonds.
The Bonds were issued pursuant to certain trust indentures described below (together, the
"Original Indentures"), each of which has been amended and restated by a separate supplemental
indenture, dated as of June 7,2003 (collectively, the "Supplemental Indentures"), between each
of the respective Issuers and The Bank of New York Mellon Trust Company, N.A., as successor
trustee under each of the Original Indentures (the "Trustee"). The Original Indentures as
amended and restated by the Supplemental Indentures are sometimes referred to herein as theo'Indentures." The proceeds from the sale of the Bonds were loaned to the Companypursuant to
certain loan agreements described below (collectively, the "Original Loan Agreements"), each of
which has been amended and restated by a First Supplemental Loan Agreement, dated as of
June l, 2003 (collectively, the "Supplemental Loan Agreements"), between each of the
respective Issuers and the Company. The Original Loan Agreements as amended and restated by
the Supplemental Loan Agreements are sometimes referred to herein as the "Loan Agreements."
The Series 1984 Bonds were issued pursuant to the Indenture of Trust, dated as of
December l, 1984, as amended and supplemented to the date hereof (the "Series 1984
Indenture"), between Sweetwater County, Wyoming ("Sweetwater County"), and the Trustee,
and the proceeds of the Series 1984 Bonds were loaned to the Company pursuant to the Loan
Agreement, dated as of December 1, 1984, as amended, between Sweetwater County and the
Company.
The Series 1986 Bonds were issued by the City of Forsyth, Rosebud County, Montana
(the "City of Forsyth") pursuant to the Trust Indenture, dated as of December l, 1986, as
amended and supplemented to the date hereof (the "Series 1986 Indenture"), between the City of
Forsyth and the Trustee, and the proceeds of the Series 1986 Bonds were loaned to the Company
pursuant to the Loan Agreement, dated as of December l, 1986, as amended, between the City of
Forsyth and the Company.
The Series 1995 Converse County Bonds were issued by Converse County, Wyoming
("Converse County") pursuant to the Trust lndenture, dated as of November l, 1995, as amended
and supplemented to the date hereof (the "Series 1995 Converse County Indenture"), between
Converse County and the Trustee, and the proceeds of the Series 1995 Converse County Bonds
were loaned to the Company pursuant to the Loan Agreement, dated as of November l, 1995, as
amended, between Converse County and the Company.
The Series 1995 Lincoln County Bonds were issued by Lincoln County, Wyoming
("Lincoln County") pursuant to the Trust lndenture, dated as of November l, 1995, as amended
and supplemented to the date hereof (the "Series 1995 Lincoln County Indenture"), between
Lincoln County and the Trustee, and the proceeds of the Series 1995 Lincoln County Bonds were
loaned to the Company pursuant to the Loan Agreement, dated as of November l, 1995, as
amended, between Lincoln County and the Company.
In order to secure the Company's obligation to repay the loan made to the Company
under each Loan Agreement, on June 2,2003 the Company issued and delivered to the Trustee
of each Issue a series of the Company's First Mortgage Bonds in a principal amount equal to the
principal amount of the related Issue as follows (collectively, the "First Mortgage Bonds"):
ISSUE
AGGREGATE
FIRST MORTGAGE BONDS PRINCIPAL AMOUNT
Series 1984 Bonds Collateral Bonds, First 2003 Series
Series 1986 Bonds Collateral Bonds, Second 2003 Series
Series 1995 Converse County Bonds Collateral Bonds, Fifth 2003 Series
Series 1995 Lincoln County Bonds Collateral Bonds, Sixth 2003 Series
s 15,000,000
g,5oo,ooo
5,300,000
22,000,000
The First Mortgage Bonds may be released (i) upon delivery of collateral in substitution
for the First Mortgage Bonds or (ii) at any time the Bonds are subject to optional redemption
provided that certain conditions are met as described below under "THE LOAN
AGREEMENTS-Loan Payments; The First Mortgage Bonds." The First Mortgage Bonds were
issued under the Mortgage and Deed of Trust, dated as of January 9, 1989, between the
Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee, as
trustee (the "Company Mortgage Trustee"), as supplemented and amended by various
supplemental indentures, including a Fifteenth Supplemental Indenture, dated as of June 1,2003
(the "Fifteenth Supplemental Indenture"), all collectively hereinafter referred to as the
"Company Mortgage." As holder of the First Mortgage Bonds, the Trustee will, ratably with the
holders of all other first mortgage bonds outstanding under the Company Mortgage, enjoy the
benefit of a lien on properties of the Company. See "THE FIRST MORTGAGE BONDS-
Security and Priority" for a description of the properties of the Company subject to the lien of the
Company Mortgage. The Bonds will not otherwise be secured by a mortgage of, or security
interest in, the Projects. The First Mortgage Bonds will be registered in the name of and held by
the Trustee for the benefit of the applicable "Owners" of the Bonds and will not be transferable
except to a successor trustee under the Indentures. "Owner," "holder" or "Bondholder" means
the registered owner of any Bonds; provided, however, when used in the context of the Tax-
Exempt (as hereinafter defined) status of the Bonds, the terms "Owner," "holder" or
"Bondholder" includes each actual purchaser of any Bond ("Beneficial Owner"). See "THE
BONDS-Book-Entry System."
Pursuant to the applicable provisions of each of the Indentures, the interest rate
determination method is being converted to the Weekly Interest Rate for each series of the
Bonds. Each such Weekly Interest Rate will apply during the Weekly lnterest Rate Period for
the applicable series of the Bonds, unless converted or redeemed as described herein.
The Bonds, together with the premium, if any, and interest thereon, will be limited
obligations and not general obligations of the Issuer thereof. None of the Indentures, the Loan
Agreements or the Bonds constitutes a debt or gives rise to a general obligation or liability of the
Issuer thereof or constitutes an indebtedness under any constitutional or statutory debt limitation.
The Bonds of each Issue will not constitute or give rise to a pecuniary liability of the Issuer
thereof and will not constitute any charge against such Issuer's general credit or taxing powers;
nor will the Bonds of an Issuer constitute an indebtedness of or a loan of credit of such Issuer.
The Bonds of each Issue are payable solely from the receipts and revenues to be received from
the Company as Loan Payments under the related Loan Agreement, or otherwise on the related
First Mortgage Bonds, and from any other moneys pledged therefor. Such receipts and revenues
and all of the applicable Issuer's rights and interests under each Loan Agreement (except as
noted under "THE INDENTURES-PIedge and Security" below) are pledged and assigned to
the Trustee as security, equally and ratably, for the payment of the Bonds to which the applicable
Loan Agreement relates. The payments required to be made by the Company under the Loan
Agreement, or otherwise on the First Mortgage Bonds, will be sufficient, together with other
funds available for such purpose, to pay the principal and purchase price of and premium, if any,
and interest on the Bonds of the Issue to which the Indenture relates. Under no circumstances
will any Issuer have any obligation, responsibility or liability with respect to any of the Projects,
the Loan Agreements, the Indentures, the Bonds or this Reoffering Circular, except for the
special limited obligation set forth in each of the Indentures and the Loan Agreements whereby
the Bonds are payable solely from amounts derived from the Company. Nothing contained in
the Indentures, the Bonds or the Loan Agreements, or in any other related documents, shall be
construed to require any Issuer to operate, maintain or have any responsibility with respect to any
of the Projects. The Issuers have no liability in the event of wrongful disbursement by the
Trustee or otherwise. No recourse shall be had against any past, present or future commissioner,
officer, employee, official or agent of any Issuer under the Indentures, the Bonds, the Loan
Agreements or any related document. The Issuers have no responsibility to maintain the
Tax-Exempt status of the Bonds under federal or state law nor any responsibility for any other
tax consequences related to the ownership or disposition of the Bonds.
None of the Issuers, the State of Montana or the State of Wyoming is in any event liable
for the payment of principal of, premium, if any, or interest on the Bonds, or for the purchase of
the Bonds, and neither the Bonds, nor the interest thereon, constitute an indebtedness of any of
the Issuers or a loan of credit thereof within the meaning of any constitutional or statutory
provisions whatsoever nor constitute or give rise to a pecuniary liability of any of the Issuers or a
charge against any of the Issuer's general credit or taxing power.
Following the conversion to a Weekly Interest Rate, the Bonds of each Issue contain
substantially the same terms and provisions as, but will be entirely separate from, the Bonds of
each other Issue. The Bonds of one Issue will not be payable from or entitled to any revenues or
other security (including First Mortgage Bonds) pledged to the Trustee in respect of the Bonds of
any other Issue. Redemption of the Bonds of one Issue may be made in the manner described
below without redemption of the Bonds of any other Issue, and a default in respect of the Bonds
of one Issue will not, in and of itself, constitute a default in respect of the Bonds of the other
Issues; however, the same occurrence may constitute a default with respect to the Bonds of more
than one Issue.
Brief descriptions of the Issuers and summaries of certain provisions of, the Bonds, the
Loan Agreements, the Indentures and the First Mortgage Bonds are included in this Reoffering
Circular, including the Appendices hereto. As the Company has no present intention of
providing letters of credit, bond insurance or other third-party security to secure the Bonds, only
the relevant provision of the Indentures and the Loan Agreements are set forth herein.
Provisions of the Loan Agreements and the Indentures relating to matters such as the
establishment of various interest rates and interest rate periods, other than the Weekly Interest
Rate Period and the Daily Interest Rate Period, and providing letters of credit are not
summarized herein. Information regarding the Company is included or incorporated by
reference in Appendix A hereto. Appendices B-1, B-2, B-3 and B-4 set forth the approving
opinions of Chapman and Cutler, Bond Counsel, delivered on the date of original issuance of
each series of the Bonds. Appendices C-1, C-2, C-3 and C-4 set forth the proposed opinions of
Chapman and Cutler LLP, Bond Counsel in connection with the change in interest rate
determination method on the Bonds, to be delivered at the time the Bonds are reoffered.
Included as Appendix D is a copy of the Continuing Disclosure Agreement (the "Continuing
Disclosure Agreement") that the Company will execute and deliver on the Conversion Date.
The descriptions herein of the Loan Agreements, the Indentures and the Company
Mortgage are qualified in their entirety by reference to such documents, and the descriptions
herein of the Bonds and the First Mortgage Bonds are qualified in their entirety by reference to
the forms thereof and the information with respect thereto included in the aforesaid documents.
All such descriptions are further qualified in their entirety by reference to laws and principles of
equity relating to or affecting the enforcement of creditors' rights generally. Copies of such
documents, except the Company Mortgage, ffi&y be obtained from the principal corporate trust
office of the Trustee in Chicago, Illinois. The Company Mortgage is available for inspection at
the office of the Company and at the principal office of the Company Mortgage Trustee in
New York, New York. References herein to each series of the Bonds are qualified in their
entirety by reference to the forms thereof included in the related Indentures and the information
with respect thereto included in the aforesaid documents. Except as expressly stated herein and
unless otherwise defined in this Reoffering Circular, all capitalized terms used herein with
respect to a series of the Bonds have the same meaning as those terms have in the related
Indenture. All such descriptions are further qualified in their entirety by reference to bankruptcy
laws and laws relating to or affecting generally the enforcement of creditors' rights.
As this Reoffering Circular is being initially circulated in connection with the adjustment
to a Weekly Interest Rate Period, generally only the Daily and Weekly Interest Rate Periods are
described herein.
THE ISSUERS
Sweetwater County, Wyoming
Sweetwater County is a political subdivision duly organized and existing under the laws
and Constitution of the State of Wyoming. The Series 1984 Bonds were issued under the
authority of Sections 15-1-701 through l5-l-710, inclusive, of the Wyoming Statutes (1977), as
amended and supplemented (the "Wyoming Act").
The City of Forsyth, Rosebud County, Montana
The City of Forsyth is a municipal corporation and political subdivision duly organized
and existing under the Constitution and laws of the State of Montana. The Series 1986 Bonds
were issued under authority of Sections90-5-l0l through 90-5-l 14, inclusive, of the Montana
Code Annotated, as amended (the "Montana Act").
Converse County, Wyoming
Converse County is a political subdivision, duly organized and existing under the
Constitution and laws of the State of Wyoming. The Series 1995 Converse County Bonds were
issued under authority of the Wyoming Act.
Lincoln County, Wyoming
Lincoln County is a political subdivision, duly organized and existing under the
Constitution and laws of the State of Wyoming. The Series 1995 Lincoln County Bonds were
issued under the authority of the Wyoming Act.
THE BONDS
Each of the four Issues of Bonds is an entirely separate Issue but will contoin
substantially the some terms and provisions. The following is a summqry of certain provisions
common to the Bonds of the four Issues- A default in respect of one Issue will not, in and of
itself, constitute a default in respect of any other Issue; ltowever, the same occurrence may
constitute a default with respect to more than one Issue. No Issue of the Bonds is entitled to the
benefits of any payments or other security pledgedfor the benefit of the other Issues, except that
each Issue of the Bonds is secured by a separate series of First Mortgage Bonds which entitle the
Owner to share ratably with the holders of all other first mortgage bonds outstanding under the
Company Mortgage in the properties of the Company subject to the lien thereof. Optional or
mandatory redemption of one Issue of the Bonds may be made in the manner described below
without redemption of the other Issues. References to the Issuer, the Trustee, the Paying Agent,
the Registrar, the Remarketing Agent, the Bonds, the Plant, the Project, the Indenture, the Loan
Agreement and other documents and parties shall be deemed to refer to the Issuer, the Trustee,
the Paying Agent, the Registrar, the Remarketing Agent, the Bonds, the Plant, the Project, the
Indenture, the Loan Agreement and such other documents ond parties, respectively, relating to
the applicable Issue of the Bonds.
General
The Bonds have been issued only as fully registered Bonds without coupons in the
manner described below. The Bonds were dated as of their initial date of delivery and mature on
the date set forth on the inside cover page of this Reoffering Circular. The Bonds may bear
interest at Daily, Weekly, Flexible or Term lnterest Rates designated and determined from time
to time in accordance with the lndenture and, with respect to the Daily and Weekly Interest
Rates, as described herein. Following the reoffering of the Bonds on June 3, 2013, the Rate
Period (as defined below) for the Bonds will be a Weekly Interest Rate Period. The Bonds are
subject to purchase at the option of the holders of the Bonds, and under certain circumstances are
subject to mandatory purchase, in the manner and at the times described herein. The Bonds are
subject to optional and mandatory redemption prior to maturity in the manner and at the times
described herein.
Bonds may be transferred or exchanged for other Bonds in authorized denominations at
the principal office of the Trustee as the registrar and paying agent (in such capacities, the
'oRegistrar" and the "Paying Agent"). The Bonds will be issued in authorized denominations of
$100,000 or any integral multiple of $100,000 (provided that one Bond need not be in a multiple
of $100,000, but may be in such denominations greater than $100,000 as is necessary to account
for any principal amount of the Bonds not corresponding directly with $100,000 denominations)
when the Bonds bear interest at a Daily or Weekly Interest Rate (the "Authorized
Denominations"). Exchanges and transfers will be made without charge to the Owners, except
for any applicable tax or other governmental charge.
Certain Definitions
"Business Day" means any day except a Saturday, Sunday or other day (a) on which
commercial banks located in the cities in which the Principal Office of the Agent Bank (or the
Principal Office of the Agent Obligor on an Alternate Liquidity Facility, as the case may be), the
Principal Office of the Trustee, the Principal Office of the Remarketing Agent or the Principal
Office of the Paying Agent are located are required or authorized by law to remain closed or are
closed, or (b) on which The New York Stock Exchange is closed.
"Interest Payment Date" means, (i) with respect to any Daily or Weekly Interest Rate
Period, the first Business Day of each calendar month, (ii) with respect to any Term Interest Rate
Period, the first day of the sixth month following the commencement of the Term Interest Rate
Period and the first day of each sixth month thereafter, and the day following the last day of a
Term Interest Rate Period, (iii) with respect to any Flexible Segment, the Business Day next
succeeding the last day of such Flexible Segment, and (iv) with respect to any Rate Period, the
Business Day next succeeding the last day thereof.
"Maximum Interest Rate" means lSYo per annum; provided that in the event a Standby
Purchase Agreement or an Alternate Liquidity Facility is in effect, the "Maximum Interest Rate"
will mean the lesser of l8% per annum or any Interest Coverage Rate specified in such Standby
Purchase Agreement or Alternate Liquidity Facility.
"Rate Period" means any Daily Interest Rate Period, Weekly Interest Rate Period,
Flexible Interest Rate Period or Term Interest Rate Period.
"Record Date" means (i) with respect to any Interest Payment Date in respect of any
Daily Interest Rate Period, Weekly Interest Rate Period or Flexible Segment, the Business Day
next preceding such Interest Payment Date, and (ii) with respect to any Interest Payment Date in
respect of any Term Interest Rate Period, the fifteenth day of the month preceding such Interest
Payment Date.
"Tax-Exempt" means, with respect to interest on any obligations of a state or local
government, including the Bonds, that such interest is not includable in gross income of the
owners of such obligations for federal income tax purposes, except for any interest on any such
obligations for any period during which such obligations are owned by a person who is a
"substantial user" of any facilities financed or refinanced with such obligations or a "related
person" within the meaning of Section 103(b)(13) of the Internal Revenue Code of 1954, as
amended (the "1954 Code"), for the Series 1984 Bonds, or within the meaning of Section 147(c)
of the lnternal Revenue Code of 1986, as amended (the "Code"), for the Series 1986 Bonds, the
Series 1995 Converse County Bonds and the Series 1995 Lincoln County Bonds, whether or not
such interest is includable as an item of tax preference or otherwise includable directly or
indirectly for purposes of calculating other tax liabilities, includin g any alternative minimum tax
or environmental tax under the Code.
Payment of Principal And Interest
The principal of and premium, if any, on the Bonds will be payable to the Owners upon
surrender thereof at the principal office of the Paying Agent. Except when the Bonds are held in
book-entry form (see "Book-Entry System"), interest will be payable (i) by bank check mailed
by first-class mail on the Interest Payment Date to the Owners as of the Record Date or (ii) in
immediately available funds on the Interest Payment Date (by wire transfer or by deposit to the
account of the Owner of any such Bond if such account is maintained with the Paying Agent),
but in respect of any Owner of Bonds during a Daily or Weekly Interest Rate Period, only to any
Owner which owns Bonds in an aggregate principal amount of at least $1,000,000 on the Record
Date and which has provided written wire transfer instructions to the Paying Agent prior to the
close of business on such Record Date.
Interest on each Bond will be payable on each Interest Payment Date for each such Bond
for the period commencing on the immediately preceding Interest Payment Date to, but not
including, such Interest Payment Date. Interest will be computed, in the case of any Daily or
Weekly Interest Rate Period, on the basis of a 365- or 366-day year, as applicable, for the
number of days actually elapsed.
Rate Periods
The term of the Bonds will be divided into consecutive Rate Periods, during which such
Bonds will bear interest at a Daily Interest Rate, Weekly Interest Rate, Flexible lnterest Rate or a
Term Interest Rate. The Rate Period applicable to each separate Issue of the Bonds may be
established by the Company independently of the Rate Period applicable to any other Issue of the
Bonds.
Weekly Interest Rate Period
Determination of Weekly Interest Rate. During each Weekly Interest Rate Period, the
Bonds will bear interest at the Weekly Interest Rate determined by the Remarketing Agent no
later than the first day of such Weekly Interest Rate Period, unless any such Tuesday is not a
Business Day, in which event the Weekly Interest Rate will be determined by the Remarketing
Agent no later than the Business Date next preceding such Tuesday.
The Weekly Interest Rate is the rate determined by the Remarketing Agent (based on an
examination of Tax-Exempt obligations comparable to the Bonds known by the Remarketing
Agent to have been priced or traded under then-prevailing market conditions) to be the lowest
rate which would enable the Remarketing Agent to sell the Bonds on the effective date of such
rate at a price (without regard to accrued interest) equal to 100% of the principal amount thereof.
If the Remarketing Agent has not determined a Weekly Interest Rate for any period, the Weekly
Interest Rate will be the same as the Weekly Interest Rate for the immediately preceding week.
The first Weekly Interest Rate determined for each Weekly Interest Rate Period applies to the
period commencing on the first day of the Weekly Interest Rate Period and ending on the next
succeeding Tuesday. Thereafter, each Weekly Interest Rate applies to the period commencing
on each Wednesday and ending on the next succeeding Tuesday, unless such Weekly Interest
Rate Period ends on a day other than Tuesday, in which event the last Weekly Interest Rate for
such Weekly Interest Rate period applies to the period commencing on the Wednesday preceding
the last day of such Weekly Interest Rate Period and ending on such last day. In no event may
the Weekly Interest Rate exceed the Maximum Interest Rate.
Adjustment to Weekly Interest Rate Period. The interest rate borne by the Bonds may be
adjusted to a Weekly Interest Rate upon receipt by the Issuer, the Trustee, the Paying Agent, the
Remarketing Agent and the Bank or the Obligor on an Alternate Credit Facility, as the case may
be, of a written notice from the Company. Such notice must specify the effective date of such
adjustment to a Weekly Interest Rate, which must be a Business Day not earlier than the
twentieth day following the third Business Day after the date of receipt by the Trustee and
Paying agent ofsuch notice (or such shorter period after the date ofsuch receipt as is acceptable
to the Trustee); provided, however, that if prior to the Company's making such election, any
Bonds have been called for redemption and such redemption has not theretofore been effected,
the effective date of such Weekly Interest Rate Period may not precede such redemption date.
Notice of Adjustment to Weekly Interest Rate Period. The Trustee will give notice by
mail of an adjustment to a Weekly Interest Rate Period to the Owners not less than20 days prior
to the effective date of such Weekly Interest Rate Period. Such notice must state (a) that the
interest rate on the Bonds will be adjusted to a Weekly Interest Rate (subject to the Company's
ability to rescind its election as described below under "-ftsssis5ion of Election"), (b) the
effective date of such Weekly Interest Rate Period, (c) that such Bonds are subject to mandatory
purchase on such effective date, (d) the procedures for such mandatory purchase, (e) the
purchase price of such Bonds on the effective date (expressed as a percentage ofthe principal
amount thereof), and (0 that the Owners of such Bonds do not have the right to retain their
Bonds on such effective date.
Daily Interest Rate Period
Determination of Daily Interest Rate. During each Daily Interest Rate Period, the Bonds
bear interest at the Daily Interest Rate determined by the Remarketing Agent either on each
Business Day for such Business Day or on the next preceding Business Day for any day that is
not a Business Day.
The Daily Interest Rate is the rate determined by the Remarketing Agent (based on an
examination of Tax-Exempt obligations comparable to the Bonds known by the Remarketing
Agent to have been priced or traded under then-prevailing market conditions) to be the lowest
rate which would enable the Remarketing Agent to sell the Bonds on the effective date of such
rate at a price (without regard to accrued interest) equal to 100% of the principal amount thereof.
If the Remarketing Agent has not determined a Daily Interest Rate for any day by 10:00a.m.,
New York time, the Daily Interest Rate for such day will be the same as the Daily Interest Rate
for the immediately preceding Business Day. In no event may the Daily Interest Rate exceed the
Maximum Interest Rate.
Adjustment to Daily fnturest Rate Period. The interest rate borne by the Bonds may be
adjusted to a Daily Interest Rate upon receipt by the Issuer, the Trustee, the Paying Agent, the
Remarketing Agent and the Bank or the Obligor on an Alternate Credit Facility, as the case may
be, of a written notice from the Company. Such notice must specify the effective date of the
adjustment to a Daily Interest Rate, which must be a Business Day not earlier than the twentieth
day following the third Business Day after the date of receipt by the Trustee and Paying Agent of
such notice (or such shorter period after the date of such receipt as is acceptable to the Trustee);
provided, however, that if prior to the Company's making such election, any Bonds have been
called for redemption and such redemption has not theretofore been effected, the effective date
of such Daily Interest Rate Period may not precede such redemption date.
Notice of Adjustment to Daily Interest Rate Period. The Trustee will give notice by
mail of an adjustment to a Daily Interest Rate Period to the Owners not less than 20 days prior to
the effective date of such Daily Interest Rate Period. Such Notice must state (a) that the interest
rate on such Bonds will be adjusted to a Daily lnterest Rate (subject to the Company's ability to
rescind its election as described below under (.-ftsssis5ion of Election"), (b) the effective date
of such Daily Interest Rate Period, (c) that such Bonds are subject to mandatory purchase on
such effective date, (d) the procedures for such mandatory purchase, (e) the purchase price of
such Bonds on the effective date (expressed as a percentage of the principal amount thereof), and
(f) that the Owners of such Bonds do not have the right to retain their Bonds on such effective
date.
Determination Conclusive
The determination of the interest rates referred to above is conclusive and binding upon
the Remarketing Agent, the Trustee, the Paying Agent, the Issuer, the Company and the Owners
of the Bonds.
Rescission of Election
The Company may rescind any election by it to adjust to a Rate Period prior to the
effective date of such adjustment by giving written notice of rescission to the Issuer, the Trustee,
the Paying Agent, the Remarketing Agent and the Bank (or the Obligor on an Alternate Credit
Facility, as the case may be) prior to such effective date. At the time the Company gives notice
of the rescission, it may also elect in such notice to continue the Rate Period then in effect. If the
Trustee receives notice of such rescission prior to the time the Trustee has given notice to the
Owners of the change in Rate Periods, then such notice of change in Rate Periods is of no force
and effect and will not be given to the Owners. If the Trustee receives notice of such rescission
after the Trustee has given notice to the Owners of an adjustment or an attempted adjustment
from one Rate Period to another Rate Periods does not become effective for any other reason,
then the Rate Period for the Bonds will automatically adjust to or continue in a Daily Interest
Rate Period and the Trustee will immediately give notice thereof to the Owners of the Bonds. If
a Daily Interest Rate for the first day of any Daily Interest Rate Period to which a Rate Period is
adjusted in accordance with this paragraph is not determined as described in (6-Daily Interest
Rate Period-Determination of Daily Interest Rote," the Daily Interest Rate for the first day of
such Daily Interest Rate Period will be 80% of the most recent One-Year Note Index theretofore
published in The Bond Buyer (or, if The Bond Buyer is no longer published or no longer
publishes the One-Year Note Index, the one-year note index contained in the publication
determined by the Remarketing Agent as most comparable to The Bond Buyer). The Trustee will
l0
immediately give written notice of each such automatic adjustment to a Rate Period as described
in this paragraph to the Owners.
Notwithstanding the rescission by the Company of any notice to adjustment or continue a
Rate Period, if notice has been given to Owners of such adjustment or continuation, the Bonds
are subject to mandatory purchase as specified in such notice.
Optional Purchase
Weekly Interest Rate Period. During any Weekly Interest Rate Period, any Bond (or
portions thereof in Authorized Denominations) will be purchased at the option of the owners
thereof on any Wednesday, or if such Wednesday is not a Business Day, the next succeeding
Business Day at a purchase price equal to 100% of the principal amount thereof plus accrued
interest, if any, to the date or purchase upon:
(a) delivery to the Trustee at the Delivery Office of the Trustee of an
irrevocable written notice or telephonic notice (promptly confirmed by telecopy or other
writing) by 5:00 p.m., New York time, on any Business Day, which states the principal
amount and certificate number (if the Bonds are not then held in book-+ntry form) of
such Bond to be purchased and the date on which such Bond is to be purchased, which
date may not be prior to the seventh day next preceding the date of the delivery of such
notice to the Trustee; and
(b) except when the Bond is held in book-entry form, delivery of such Bond,
accompanied by an instrument of transfer (which may be the form printed on the Bond)
executed in blank by its Owner, with such signature guaranteed by a bank, trust company
or member firm of the New York Stock Exchange, Inc. to the Delivery Office of the
Trustee at or prior to 1:00 p.m., New York time, on the purchase date specified in such
notice.
Daily Interest Rate Period. During any Daily Interest Rate Period, any Bond (or portions
thereof in Authorized Denominations) will be purchased at the option of the owner thereof on
any Business Day at a purchase price equal to 100% of the principal amount thereof plus accrued
interest, if any, to the date of purchase upon:
(a) delivery to the Trustee at the Delivery Office of the Trustee and to the
Remarketing Agent at the Principal Office of the Remarketing Agent, not later than
1l:00a.m., NewYork time, on such Business Day, of an irrevocable written or
telephonic notice (promptly confirmed by telecopy or other writing), which states the
principal amount and certificate number (if the Bonds are not then held in book-entry
form) of such Bond to be purchased and the date of such purchase; and
(b) except when the Bond is held in book-+ntry form, delivery of such Bond,
accompanied by an instrument of transfer (which may be the form printed on the Bond)
executed in blank by its Owner, with such signature guaranteed by a bank, trust company
or member firm of the New York Stock Exchange, Inc., to the Delivery Office of the
Trustee at or prior to 1:00 p.m., New York time, on such purchase date.
t1
FOR SO LONG AS THE BONDS ARE HELD IN BOOK_ENTRY FORM, THE
BENEFICIAL OWNER OF THE BONDS THROUGH ITS DIRECT PARTICIPANT (AS
HEREINAFTER DEFINED) MUST GIVE NOTICE TO THE TRUSTEE TO ELECT TO
HAVE SUCH BONDS PURCHASED, AND MUST EFFECT DELIVERY OF SUCH BONDS
BY CAUSING SUCH DIRECT PARTICIPANT TO TRANSFER ITS INTEREST IN THE
BONDS EQUAL TO SUCH BENEFICIAL OWNER'S INTEREST ON THE RECORDS OF
DTC TO THE TRUSTEE'S PARTICIPANT ACCOUNT WITH DTC. THE REQUIREMENT
FOR PHYSICAL DELIVERY OF THE BONDS IN CONNECTION WITH ANY PURCHASE
PURSUANT TO THE PROVISIONS DESCRIBED ABOVE ARE DEEMED SATISFIED
WHEN THE OWNERSHIP RIGHTS TN THE BONDS ARE TRANSFERRED BY DTC
PARTICIPANTS ON THE RECORDS OF DTC. SEE "-THE BOOK_ENTRY SYSTEM."
Mandatory Purchase
The Bonds bearing interest at a Weekly Interest Rate or Daily lnterest Rate are subject to
mandatory purchase at a purchase price equal to 100% of the principal amount thereof, plus
accrued interest to the purchase date described below, on the effective date of any change in a
Rate Period.
FOR SO LONG AS THE BONDS ARE HELD IN BOOK_ENTRY FORM, NOTICES
OF MANDATORY PURCHASE OF BONDS WILL BE GIVEN BY THE TRUSTEE TO DTC
ONLY, AND NEITHER THE ISSUER, THE TRUSTEE, THE COMPANY, NOR THE
REMARKETING AGENT HAS ANY RESPONSIBILITY FOR THE DELIVERY OF ANY
SUCH NOTICES BY DTC TO ANY DIRECT PARTICIPANTS OF DTC, BY ANY DIRECT
PARTICIPANTS TO ANY TNDIRECT PARTICIPANTS OF DTC OR BY ANY DIRECT
PARTICIPANTS OR INDIRECT PARTICIPANTS TO BENEFICTAL OWNERS OF THE
BONDS. FOR SO LONG AS THE BONDS ARE HELD TN BOOK-ENTRY FORM, THE
REQUIREMENT FOR PHYSICAL DELIVERY OF THE BONDS TN CONNECTION WITH
ANY PURCHASE PURSUANT TO THE PROVISIONS DESCRIBED ABOVE WILL BE
DEEMED SATISFIED WHEN THE OWNERSHIP RIGHTS IN THE BONDS ARE
TRANSFERRED BY DTC ON THE RECORDS OF DTC. $ss66-866k-Entry System."
Purchase ofBonds
On the date on which Bonds are to be purchased as specified above under "-Optional
Purchase" or "-Mandatory Purchase," the Trustee will pay the purchase price of such Bonds but
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) moneys furnished by the Company to the Trustee for the purchase of
Bonds that are to be cancelled or held by or on behalf of the Company;
(b) proceeds from the remarketing and sale of such Bonds;
(c) moneys furnished by the Trustee for defeasance of such Bonds, such
moneys to be applied only to the purchase of Bonds which are deemed to be defeased;
and
12
(d) any other moneys furnished by the Company to the Trustee for purchase
ofthe Bonds;
provided, however, that funds for the payment of the purchase price of defeased Bonds will be
derived only from the sources described in (b) and (c) above, in such order of priority.
Remarketing of Bonds
The Remarketing Agent will offer for sale and use its best efforts to remarket any Bond
subject to purchase pursuant to the optional or mandatory purchase provisions described above,
any such remarketing to be made at a price equal to 100% of the principal amount thereof plus
accrued interest, if any, to the purchase date. The Company may direct the Remarketing Agent
from time to time to cease and to resume sales efforts with respect to some or all of the Bonds.
See o'REMARKETING-Special Considerations."
Optional Redemption of Bonds
The Bonds may be redeemed at the option of the Company, in whole, or in part by lot,
prior to their maturity date on any Business Day during a Daily Interest Rate Period or Weekly
Interest Rate Period, at a redemption price equal to 100% of the principal amount thereof plus
accrued interest, if any to the date of redemption.
Extraordinary Optional Redemption of Bonds
At any time, the Bonds are subject to redemption at the option of the Company in whole
or in part (and if in part, by lot), at a redemption price equal to 100% of the principal amount
thereof plus accrued interest to the redemption date, upon receipt by the Trustee of a written
notice from the Company stating that any of the following events has occurred and that the
Company therefore intends to exercise its option to prepay the payments due under the
applicable Loan Agreement in whole or in part and thereby effect the redemption of the Bonds of
an Issue in whole or in part to the extent of such prepayments:
(a) the Company has determined that the continued operation of the Plant is
impracticable, uneconomical or undesirable for any reason;
(b) all or substantially all of the Plant has been condemned or taken by
eminent domain; or
(c) the operation of the Plant has been enjoined or has otherwise been
prohibited by, or conflicts with, any order, decree, rule or regulation of any court or of
any federal, state or local regulatory body, administrative agency or other governmental
body.
Special Mandatory Redemption of Bonds
The Bonds are subject to mandatory redemption at 100% of the principal amount thereof
plus accrued interest, if any, to the date of redemption upon the occurence of the following
events.
l3
The Bonds will be redeemed in whole within 180 days following a "Determination of
Taxability" as defined below; provided that, if in the opinion of nationally recognized bond
counsel ("Bond Counsel") delivered to the Trustee, the redemption of a specified portion of the
Bonds outstanding would have the result that interest payable on the Bonds remaining
outstanding after such redemption would remain Tax-Exempt, then the Bonds will be redeemed
in part by lot (in Authorized Denominations) in such amount as Bond Counsel in such opinion
has determined is necessary to accomplish that result. A "Determination of Taxability" is
deemed to have occurred if, as a result of an Event of Taxability (as defined below), a final
decree or judgment of any federal court or a final action of the Internal Revenue Service
determines that interest paid or payable on any Bond is or was includible in the gross income of
an owner of the Bonds for federal income tax purposes under the Code (other than an owner who
is a "substantial user" or "related person" within the meaning of Section 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 Loan Agreement, and
(b) 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 will promptly give notice thereof to the Company, the Issuer and the owner of each Bond
then outstanding. Ifa 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 will
make the required demand for prepayment of the amounts payable under the Loan Agreement for
prepayment of the Bonds and give notice of the redemption of the Bonds at the earliest practical
date, but not later than the date specified in the Loan Agreement, and in the manner provided by
the Indenture. An "Event of Taxability" means the failure of the Company to observe any
covenant, agreement or representation in the Loan Agreement, which failure results in a
Determination of Taxabi lity.
Procedure for and Notice of Redemption
If less than all of the Bonds of an Issue are called for redemption, the particular Bonds or
portions thereof to be redeemed will be selected by the Trustee, by lot. In selecting Bonds for
redemption, the Trustee will treat each Bond as representing that number of Bonds which is
obtained by dividing the principal amount of each Bond by the minimum Authorized
Denomination. Any Bonds selected for redemption which are deemed to be paid in accordance
with the provisions of the Indenture will cease to bear interest on the date fixed for redemption.
Subject to the procedures described below under "-Book-Entry System" for Bonds held in
book-entry form, upon presentation and surrender of such Bonds at the place or places of
payment, such Bonds shall be paid. Notice of redemption will be given by first-class mail as
provided in the Indenture, not less than 30 days and not more than 60 days prior to the
redemption date, provided that the failure to duly give notice by mailing to any Owner, or any
defect therein, does not affect the validity of any proceedings for the redemption of any other of
the Bonds. Such notice will also be sent to the Remarketing Agent, the Company Mortgage
t4
Trustee, Moody's (if the Bonds are then rated by Moody's), S&P (if the Bonds are then rated by
S&P), securities depositories and bond information services.
With respect to notice of any optional redemption of the Bonds, as described above,
unless, upon the giving of such notice, such Bonds are deemed to have been paid within the
meaning of the Indenture, such notice may state that such redemption is 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 redemption will not be made and the Trustee will give notice, in
the manner in which the notice of redemption was given, that such redemption will not take
place.
Book-Entry System
The following information in this section concerning DTC and DTC's book-entry system
hos been obtained from sources (including DTC) that the Company believes to be reliable, but
none of the Company, the Issuers or the Remarketing Agents take any responsibility for the
accuracy of such information.
The Depository Trust Company ("DTC"), New York, New York, will act as securities
depository for the Bonds. The Bonds will be issued as fully-registered bonds registered in the
name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an
authorized representative of DTC. One fully-registered Bond certificate will be issued for the
Bonds, in the aggregate principal amount of such issue, and will be deposited with DTC.
DTC, the world's largest securities depository, is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section l7A of the Securities Exchange Act of 1934.
DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity
issues, corporate and municipal debt issues, and money market instruments (from over 100
countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also
facilitates the post-trade settlement among Direct Participants of sales and other securities
transactions in deposited securities, through electronic computerized book-entry transfers and
pledges between Direct Participants' accounts. This eliminates the need for physical movement
of bond certificates. Direct Participants include both U.S. and non-U.S. securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a
wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is
the holding company for DTC, National Securities Clearing Corporation and Fixed Income
Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users
of its regulated subsidiaries. Access to the DTC system is also available to others such as both
U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing
corporations that clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The DTC Rules applicable to its
Participants are on file with the Securities and Exchange Commission. More information about
DTC can be found at www.dtcc.com.
15
Purchases of Bonds under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest
of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive
written confirmations providing details of the transaction, as well as periodic statements of their
holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into
the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries
made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership interests in Bonds,
except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC
are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as
may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and
their registration in the name of Cede & Co. or such other DTC nominee do not effect any
change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the
Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such
Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect
Participants will remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct Participants, by
Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time. Redemption notices will be sent
to DTC. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such issue to be
redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with
respect to Bonds unless authorized by a Direct Participant in accordance with DTC's MMI
Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting
rights to those Direct Participants to whose accounts Bonds are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, purchase price and other payments on the Bonds will
be made to Cede & Co. or such other nominee as may be requested by an authorized
representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's
receipt of funds and corresponding detail information from Issuer or Agent, on payable date in
accordance with their respective holdings shown on DTC's records. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary practices, as is the
case with bonds held for the accounts of customers in bearer form or registered in "street name,"
and will be the responsibility of such Participant and not of DTC, the Trustee, or the Issuer,
subject to any statutory or regulatory requirements as may be in effect from time to time.
Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such
other nominee as may be requested by an authorized representative of DTC) is the responsibility
of the lssuer or the Trustee, disbursement of such payments to Direct Participants will be the
t6
responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the
responsibility of Direct and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Bonds purchased or tendered,
through its Participant, to the Remarketing Agent, and shall effect delivery of such Bonds by
causing the Direct Participant to transfer the Participant's interest in the Bonds, on DTC's
records, to the Remarketing Agent. The requirement for physical delivery of Bonds in
connection with an optional tender or mandatory purchase will be deemed satisfied when the
ownership rights in the Bonds are transferred by Direct Participants on DTC's records and
followed by book-entry credit of tendered Bonds to the Remarketing Agent's DTC account.
DTC may discontinue providing its services as depository with respect to the Bonds at
any time by giving reasonable notice to the Issuer or the Trustee. Under such circumstances, in
the event that a successor depository is not obtained, Bonds are required to be printed and
delivered.
The Issuer, at the direction of the Company, may decide to discontinue use of the system
of book-entry-only transfers through DTC (or a successor bonds depository). In that event,
Bonds will be printed and delivered to DTC.
The information in this section concerning DTC and DTC's book-entry system has been
obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the
accuracy thereof.
NONE OF THE ISSUER, THE COMPANY OR THE TRUSTEE WILL HAVE ANY
RESPONSIBILITY OR OBLIGATION TO SUCH PARTICIPANTS OR THE PERSONS FOR
WHOM THEY ACT AS NOMTNEES WITH RESPECT TO THE PAYMENTS TO OR TTM
PROVIDING OF NOTICE FOR THE DIRECT PARTICIPANTS, OR THE TNDIRECT
PARTICIPANTS, OR THE BENEFICIAL OWNERS. SO LONG AS CEDE & CO., AS
NOMINEE OF DTC, IS THE REGISTERED OWNER OF THE BONDS, REFERENCES
HEREIN TO THE REGISTERED OWNERS OF THE BONDS SHALL MEAN CEDE & CO.
AND SHALL NOT MEAN THE BENEFICIAL OWNERS.
Unless otherwise noted, portions of the information contained under this caption have
been obtained from DTC. No representation is made by the Issuers, the Company or the
Remarketing Agents as to the completeness or the accuracy of such information or as to the
absence of material adverse changes in such information subsequent to the date hereof.
THE LOAI\ AGREEMENTS
Each Loan Agreement will operate independently of each other Loan Agreement. A
default under one Loan Agreement will not necessarily constitute a default under the other Loan
Agreements. The Loan Agreements contain substantially identical terms, and the following is a
summary of certain provisions common to the Loan Agreements. All references in this summary
to the Issuer, the Loan Agreement and payments thereunder, the Indenture, the Bonds, the
Project, the First Mortgage Bonds and other documents and parties shall be deemed to refer to
tlte Issuer, the Loan Agreement and such payments, the Indenture, tlte Bonds, the Project, the
t7
First Mortgage Bonds and such other documents and parties, respectively, relating to each Issue
of the Bonds.
Issuance of the Bonds
The Issuer issued the Bonds for the purpose of loaning the proceeds thereof to the
Company to finance or refinance a portion of the costs of the Projects.
Loan Payments; the First Mortgage Bonds
As and for repayment of the loan made to the Company by the Issuer, the Company will
pay to the Trustee, for the account of the Issuer, an amount equal to the principal of, and
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, and premium, if any, and
interest on the Bonds, whether at maturity, upon redemption, acceleration or otherwise (the
"Loan Payments"); provided, however, that the obligation of the Company to make any such
Loan Payment will be reduced by the amount of any moneys held by the Trustee under the
Indenture and available for such payment; and provided further that the obligations of the
Company to make any prepayment under the Loan Agreement will be deemed to be satisfied and
discharged to the extent of the corresponding payment, if any, made by the Company of principal
of, premium, or interest on the First Mortgage Bonds.
In the event that the Company fails to make timely Loan Payments to the Trustee under
the Loan Agreement with respect to any Bond, the payment so in default will continue as an
obligation of the Company until the amount in default has been fully paid, and the Company will
pay interest on any overdue amount with respect to the principal of such Bond and, to the extent
permitted by law, on any overdue amount with respect to premium, if any, and interest on such
Bond, at the interest rate borne by such Bond until paid.
The Company's obligation to repay the loan made to it by the Issuer will be secured by
First Mortgage Bonds delivered to the Trustee equal in principal amount to, and bearing interest
at the same rate and maturing on the same date as, the Bonds. The payments to be made by the
Company pursuant to the Loan Agreement and the First Mortgage Bonds will be pledged under
the Indenture by the Issuer to the Trustee, and the Company is to make all payments thereunder
and thereon directly to the Trustee. See "THE FIRST MORTGAGE BONDS-General" below.
Pursuant to the Loan Agreement, the Company may provide for the release of its First
Mortgage Bonds by delivering to the Trustee collateral in substitution for the First Mortgage
Bonds ("Substitute Collateral"), but only if the Company, on the date of delivery of such
Substitute Collateral, simultaneously delivers to the Trustee (a) an opinion of Bond Counsel
stating that delivery of such Substitute Collateral and release of the First Mortgage Bonds
complies with the terms of the Loan Agreement and will not adversely affect the Tax-Exempt
status of the Bonds; (b) written evidence from the Insurer, if any, and from each Bank, if any, to
the effect that they have reviewed the proposed Substitute Collateral and find it to be acceptable;
and (c) written evidence from Moody's, if the Bonds are then rated by Moody's, and from S&P,
if the Bonds are then rated by S&P, in each case to the effect that such rating agency has
reviewed the Substitute Collateral and that the release of the First Mortgage Bonds and the
18
substitution of the Substitute Collateral for the First Mortgage Bonds will not, by itself, result in
a reduction, suspension or withdrawal of such rating agency's rating or ratings of the Bonds.
Pursuant to the Loan Agreement, the Company may provide for the release of its First
Mortgage Bonds at any time the Bonds are subject to optional redemption. See "THE
BONDS-Optional Redemption of Bonds."
Payments of Purchase Price
The Company will pay or cause to be paid to the Trustee amounts equal to the amounts to
be paid by the Trustee pursuant to the Indenture for the purchase of outstanding Bonds
thereunder (see "THE BONDS-Optional Purchase" 6d (6-\zl4ndatory Purchase"), such
amounts to be paid to the Trustee as the purchase price for the Bonds tendered for purchase
pursuant to the Indenture on the dates such payments are to be made; provided, however, that the
obligation of the Company to make any such payment under the Loan Agreement will be
reduced by the amount of any moneys held by the Trustee under the Indenture and available for
such payment.
Obligation Absolute
The Company's obligation to make payments under the Loan Agreement and otherwise
on the First Mortgage Bonds is absolute, irrevocable and unconditional and will not be subject to
cancellation, termination or abatement, or to any defense other than payment, or to any right of
setoff, counterclaim or recoupment arising out of any breach under the Loan Agreement or the
Indenture or otherwise by the Company, the Trustee, the Remarketing Agent or any other party
or out of any obligation or liability at any time owing to the Company by any such party.
The Company is obligated to pay reasonable compensation and to reimburse certain
expenses and advances of the Issuer, the Trustee, the Registrar, the Remarketing Agent, the
Paying Agent, Moody's and S&P directly to such entity.
Tax Covenants; Tax-Exempt Status of Bonds
The Company covenants that the Bond proceeds, the earnings thereon and any other
moneys on deposit with respect to the Bonds will not be used in such a manner as to cause the
Bonds to be o'arbitrage bonds" within the meaning of the Code.
The Company covenants that it has not taken, and will not take, or permit to be taken on
its behalf, any action which would adversely affect the Tax-Exempt status of the Bonds and will
take, or require to be taken, such actions as may, from time to time, be required under applicable
law or regulation to continue to cause the Bonds to be Tax-Exempt. See "TAX EXEMPTION."
Other Covenants of the Company
Maintenance of Existence; Conditions Under Which Exceptions Permitted. The
Company will maintain in good standing its corporate existence as a corporation organized under
the laws of one of the states of the United States or the District of Columbia and will remain duly
qualified to do business in the States of Montana and Wyoming, as applicable, will not dissolve
l9
or otherwise dispose of all or substantially all of its assets and will not consolidate with or merge
into another corporation; provided, however, that the Company may, without violating the
foregoing, undertake from time to time any one or more of the following, if, prior to the effective
date thereof, there has been delivered to the Trustee an opinion of Bond Counsel stating that the
contemplated action will not adversely affect the Tax-Exempt status of the Bonds:
(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, must be the Company or a corporation qualified to do business
in the States of Montana and Wyoming, as applicable, as a foreign corporation or incorporated
and existing under the laws of the States of Montana and Wyoming, as applicable, which, as a
result of the transaction, has assumed (either by operation of law or in writing) all of the
obligations of the Company under the Loan Agreement and the First Mortgage Bonds; 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 remains in existence and primarily liable on all of its
obligations under the Loan Agreement and the First Mortgage Bonds and the subsidiary or
subsidiaries to which such assets have been conveyed have guaranteed in writing the
performance of all of the Company's obligations under the Loan Agreement and the First
Mortgage Bonds.
Assignmenl. The Company's interest in the Loan Agreement may be assigned in whole
or in part by the Company to another entity, subject, however, to the conditions that no
assignment may (a) adversely affect the Tax-Exempt status of the Bonds or (b) relieve (other
than as described in the preceding paragraph) the Company from primary liability for its
obligations to pay the First Mortgage Bonds or to make the Loan Payments or to make payments
to the Trustee for the purchase of Bonds or for any other of its obligations under the Loan
Agreement; and subject further to the condition that the Company delivers to the Trustee (i) an
opinion of counsel to the Company that such assignment complies with the foregoing provisions
and (ii) an opinion of Bond Counsel to the effect that the proposed assignment will not impair
the validity of the Bonds under either the Wyoming Act or the Montana Act, respectively, or
adversely affect the Tax-Exempt status of the Bonds. The Company must, within 30 days after
the delivery thereof, furnish to the Issuer and the Trustee a true and complete copy of the
agreements or other documents effectuating any such assignment.
Maintenance and Repair; Taxes, etc. The Company will maintain the Projects in good
repair, keep the same insured in accordance with standard industry practice and pay all costs
thereof. The Company will pay or cause to be paid all taxes, special assessments and
governmental, utility and other charges with respect to the Projects.
The Company may at its own expense cause the Projects to be remodeled or cause such
substitutions, modifications and improvements to be made to the Projects from time to time as
the Company, in its discretion, may deem to be desirable for its uses and purposes, which
remodeling, substitutions, modifications and improvements will be included under the terms of
the Loan Agreement as part of the Projects; provided, however, that the Company may not
exercise any such right, power, election or option if the proposed remodeling, substitution,
modification or improvement would adversely affect the Tax-Exempt status of the Bonds.
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The Company will cause insurance to be taken out and continuously maintained in effect
with respect to the Plant in accordance with standard industry practice.
Anything in the Loan Agreement to the contrary notwithstanding, the Company will have
the right at any time to cause the operation of the Plant to be terminated if the Company has
determined or concurred in a determination that the continued operation of the Project or the
Plant is uneconomical for any reason.
Defaults
Each of the following events constitutes an "Event of Default" under the Loan
Agreements:
(a) a failure by the Company to make when due any Loan Payment and any
payment on the First Mortgage Bonds, or any payment required to be made to the Trustee
for the purchase of Bonds, which failure has resulted in an "Event of Default" as
described herein in parugraphs (a), (b) or (c) under "THE INDENTURES-Defaults;"
(b) a failure by the Company to pay when due any amount required to be paid
under the Loan Agreement or to observe and perform any other covenant, condition or
agteement on the Company's part to be observed or performed under the Loan
Agreement (other than a failure described in clause (a) above), which failure continues
for a period of 60 days (or such longer period as the Issuer and the Trustee may agree to
in writing) after written notice given to the Company by the Trustee or to the Company
and the Trustee by the Issuer; provided, however, that if such failure is other than for the
payment of money and cannot be corrected within the applicable period, such failure will
not constitute an Event of Default under the Loan Agreement so long as the Company
institutes corrective action within the applicable period and such action is being diligently
pursued; or
(c) certain events of bankruptcy, dissolution, liquidation or reorganization of
the Company.
The Loan Agreement provides that, with respect to any Event of Default described in
clause (b) above if, by reason of acts of God, strikes, lockouts or other industrial disturbances,
acts of public enemies, orders of political bodies, certain natural disasters, civil disturbances and
certain other events specified in the Loan Agreement, or any cause or event not reasonably
within the control of the Company, the Company is unable in whole or in part to carry out one or
more of its agreements or obligations contained in the Loan Agreement (other than certain
obligations specified in the Loan Agreement, including its obligations to make when due Loan
Payments or otherwise on the First Mortgage Bonds, to make payments to the Trustee for the
purchase of Bonds, to pay certain expenses and taxes, to indemnify the Issuer, the Trustee and
others against certain liabilities, to discharge liens and to maintain its existence), the Company
will not be deemed in default by reason of not carrying out such agreement or agreements or
performing such obligations during the continuance of such inability.
21
Remedies
Upon the occurrence and continuance of any Event of Default described in clauses (a) or
(c) under "-Defaults" above, and further upon the condition that, in accordance with the terms
of the lndenture, the Bonds have been declared to be immediately due and payable pursuant to
any provision of the Indenture, the Loan Payments will, 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 Loan Agreement and a rescission and annulment of the
consequences thereof. See THE INDENTURES-Defaults."
Upon the occurrence and continuance of any Event of Default arising from a o'Default" as
such term is defined in the Company Mortgage, the Trustee, as holder of the First Mortgage
Bonds, will, subject to the provisions of the Indenture, have the rights provided in the Company
Mortgage. Any waiver made in accordance with the Indenture of a "Default" under the
Company Mortgage and a rescission and annulment of its consequences will constitute a waiver
of the corresponding Event or Events of Default under the Loan Agreement and a rescission and
annulment of the consequences thereof.
Upon the occurrence and continuance of any Event of Default under the Loan
Agreement, the Issuer may (i) take any action at law or in equity to collect any payments then
due and thereafter to become due, or to seek injunctive relief or specific performance of any
obligation, agreement or covenant of the Company under the Loan Agreement and (ii) pursue
any remedy available under the First Mortgage Bonds.
Any amounts collected from the Company upon an Event of Default under the Loan
Agreement will be applied in accordance with the Indenture.
Amendments
The Loan Agreement may be amended by the Issuer and the Company subject to the
limitations contained in the Loan Agreement and the Indenture. See "THE INDENTURES-
Amendment of the Loan Agreement."
THE INDENTURES
Each Indenture will operate independently of each other Indenture. A default under one
Indenture will not necessarily constitute a default under the other Indentures. The Indentures
contain substantially identical terms, and the following is a summary of certain provisions
common to the Indentures. All references in this summary to the Issuer, the Loan Agreement and
payments thereunder, the Indenture, the Bonds, the Bond Fund and other documents and parties
are to the Issuer, the Loan Agreement and such payments, the Indenture, the Bonds, the Bond
Fund and such other documents and parties, respectively, relating to each Issue of Bonds.
Pledge and Security
Pursuant to the Indenture, the Loan Payments have been pledged by the Issuer to secure
the payment of the principal of, and premium, if any, and interest on, the Bonds. The Issuer has
22
also pledged and assigned to the Trustee all its rights and interests under the Loan Agreement
(other than its rights to indemnification and reimbursement of expenses and certain other rights),
including the [ssuer's right to delivery of the First Mortgage Bonds, and has pledged to the
Trustee all moneys and obligations deposited or to be deposited in the Bond Fund established
with the Trustee; provided that the Trustee, the Remarketing Agent, the Paying Agent and the
Registrar will have a prior claim on the Bond Fund for the payment of their compensation and
expenses and for the repayment of any advances (plus interest thereon) made by them to effect
performance of certain covenants in the Indenture if the Company has failed to make any
payment which results in an Event of Default under the Loan Agreement.
Application of Proceeds of the Bond Fund
The proceeds from the sale of the Bonds, excluding accrued interest, if any, were used to
finance or refinance a portion of the Company's share of expenditures, including financing costs,
of the Projects. There was created under the Indenture, a Bond Fund to be held by the Trustee
and therein established a Principal Account and an Interest Account. Payments made by the
Company under the Loan Agreement and otherwise on the First Mortgage Bonds in respect of
the principal of, and premium, if any, and interest on, the Bonds and certain other amounts
specified in the Indenture are to be deposited in the appropriate account in the Bond Fund.
While any Bonds are outstanding and except as provided in the Indenture and a Tax Exemption
Certificate and Agreement among the Trustee, the Issuer and the Company (the "Tax
Certificate"), moneys in the Bond Fund will be used solely for the payment of the principal of,
and premium, if any, and interest on, the Bonds as the same become due and payable at maturity,
upon redemption or upon acceleration of maturity, subject to the prior claim of the Trustee, the
Remarketing Agent, the Paying Agent and the Registrar, to the extent described above in "Pledge
and Security."
Investment of Funds
Subject to the provisions of the Tax Certificate, moneys in the Bond Fund will, at the
direction of the Company, be invested in securities or obligations specified in the Indenture.
Gains from such investments will be credited, and any loss will be charged, to the particular fund
or account from which the investments were made.
Defaults
Each of the following events will constitute an o'Event of Default" under the Indenture:
(a) a failure to pay the principal of, or premium, if any, on any of the Bonds
when the same becomes due and payable at maturity, upon redemption or otherwise;
(b) a failure to pay an installment of interest on any of the Bonds for a period
of one day after such interest has become due and payable;
(c) a failure to pay amounts due in respect of the purchase price of Bonds as
described under the captions "THE BONDS-Optional Purchase" 4nd (6-\z[sndatory
Purchase;"
23
(d) a failure by the Issuer to observe and perform any covenant, condition,
agreement or provision contained in the Bonds or the Indenture (other than a failure
described in clauses (a), (b) or (c) above), which failure continues for a period of 90 days
after written notice has been given to the Issuer and the Company by the Trustee, which
notice may be given at the discretion of the Trustee and must be given at the written
request of the Owners of not less than 25oh 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;
an "Event of Default" under the Loan Agreement; or
a "Default" under the Company Mortgage.
Remedies
Upon the occurrence (without waiver or cure) of an Event of Default described in
clauses (a), (b), (c) or (f) under6(-Defaults" above or an Event of Default described in clause (e)
under "-Defaults" resulting from an "Event of Default" under the Loan Agreement as described
under clauses (a) or (c) of "THE LOAN AGREEMENTS-Defaults" herein, and further on the
condition that, if in accordance with the terms of the Company Mortgage, the First Mortgage
Bonds have become immediately due and payable pursuant to any provision of the Company
Mortgage, then the Bonds will, without further action become immediately due and payable,
whereupon the Bonds will, without further action, become immediately due and payable;
provided that any waiver of any "Default" under the Company Mortgage and a rescission and
annulment of its consequences will constitute a waiver of the corresponding Event or Events of
Default under the Indenture and rescission and annulment of the consequences thereof.
The provisions described in the preceding paragraph are subject to the condition that if
after the principal of the Bonds has been so declared to be due and payable and before any
judgment or decree for the payment of the moneys due has been obtained or entered as
hereinafter provided, the [ssuer will cause to be deposited with the Trustee a sum sufficient to
pay all matured installments of interest upon all Bonds, any unpaid purchase price and the
principal of any and all Bonds which has 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 is
sufficient to cover reasonable compensation and reimbursement of expenses payable to the
Trustee, and all Events of Default under the lndenture (other than nonpayment of the principal of
Bonds which has become due by said declaration) have been remedied, then, in every such case,
such Event of Default will be deemed waived and such declaration and its consequences
rescinded and annulled, and the Trustee will promptly give written notice of such waiver,
rescission and annulment to the Issuer and the Company and will give notice thereof to Owners
of the Bonds by first-class mail; provided, however, that no such waiver, rescission and
(e)
(0
24
annulment will extend to or affect any other Event of Default or subsequent Event of Default or
impair any right, power or remedy consequent thereon.
Upon the occurrence and continuance of any Event of Default under the lndenture, the
Trustee may, and upon the written direction of the Owners of not less than 25Yo in principal
amount of the Bonds outstanding and receipt of indemnity to its satisfaction (except against gross
negligence or willful misconduct) must, pursue any available remedy to enforce the rights of the
Owners of the Bonds and to require the Company or the Issuer to carry out any agreements,
bring suit upon 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 or to enforce
the trusts created by the Indenture) except upon the written request of the Owners of not less than
25Yo in principal amount of the Bonds then outstanding and receipt of indemnity satisfactory to
it.
The Owners of a majority in principal amount of Bonds then outstanding will have the
right to direct the time, method and place of conducting all remedial proceedings available to the
Trustee under the Indenture or exercising any trust or power conferred on the Trustee upon
furnishing satisfactory indemnity to the Trustee (except against gross negligence or willful
misconduct) and provided that such direction will not result in any personal liability of the
Trustee.
No Owner of any Bond will have any right to institute any suit, action or proceeding in
equity or at law for the execution of any trust or power of the Trustee unless such Owner has
previously given the Trustee written notice of an Event of Default and unless the Owners of not
less than 25o/o in principal amount of the Bonds then outstanding have made written request of
the Trustee so to do, and unless satisfactory indemnity (except against gross negligence or willful
misconduct) has been offered to the Trustee and the Trustee has not complied with such request
within a reasonable time.
Notwithstanding any other provision in the Indenture, the right of any Owner to receive
payment of the principal or purchase price of, and premium, if any, and interest on the Owner's
Bond on or after the respective due dates expressed therein, or to institute suit for the
enforcement of any such payment on or after such respective dates, will not be impaired or
affected without the consent of such Owner of Bonds.
Defeasance
All or any portions of Bonds (in Authorized Denominations) will, prior to the maturity or
redemption date thereof, be deemed to have been paid for all purposes of the Indenture when:
(a) the Bonds or portions thereof have been selected for redemption and the
Trustee has given, or the Company has given to the Trustee in form satisfactory to it,
irrevocable instructions to give, notice of redemption of such Bonds or portions thereof;
(b) there has been deposited with the Trustee moneys in an amount sufficient
(without relying on any investment income) to pay when due the principal of, and
25
premium, if any, and interest due and to become due (which amount of interest to become
due will be calculated at the Maximum Interest Rate unless the interest rate borne by all
of such Bonds is not subject to adjustment prior to the maturity or redemption thereof, in
which case the amount of interest will be calculated at the rate borne by such Bonds) on
such Bonds or portions thereof on and prior to the redemption date or maturity date
thereof, as the case may be;
(c) in the event such Bonds or portions thereof do not mature and are not to be
redeemed within the next succeeding 60 days, the Issuer at the direction of the Company
has 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 such Bonds or portions thereof that the deposit
required by clause (b) above has been made with the Trustee and that such Bonds or
portions thereof are deemed to have been paid and stating the maturity or redemption date
upon which moneys are to be available for the payment of the principal of, and premium,
if any, and interest on such Bonds or portions thereof;
(d) the Issuer, the Company, 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, 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 (b) above have been satisfied;
(e) the Issuer, the Company and the Trustee 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 reduction, suspension or withdrawal of
the rating; and
(0 the Issuer, the Company, 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, have received an opinion of
Bond Counsel to the effect that such deposit will not adversely affect the Tax-Exempt
status of the Bonds ("Bond Counsel's Opinion").
Moneys deposited with the Trustee as described above may not be withdrawn or used for
any purpose other than, and will be held in trust for, the payment of the principal of, and
premium, if any, and interest on such 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, will, to the extent practicable, be invested and reinvested in direct
obligations of, or obligations the principal of and interest on which are unconditionally
guaranteed as to full and timely payment by, the United States of America, which are not subject
to redemption or prepayment prior to stated maturity ("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 will be paid over to the Company, as received by the Trustee, free
and clear of any trust, lien or pledge.
26
The provisions of the Indenture relating to (a) the registration and exchange of Bonds and
(b) the delivery of Bonds to the Trustee for purchase and the related obligations of the Trustee
with respect thereto will 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, however,
that the provisions with respect to registration and exchange of Bonds will continue to be
effective until the maturity or the last date fixed for redemption of all Bonds.
In the event the requirements of the last sentence of the next succeeding paragraph can be
satisfied, the preceding three paragraphs will not apply and the following two paragraphs will be
applicable.
Any Bond will be deemed to be paid within the meaning of the Indenture when
(a) payment of the principal of, and premium, if any, on such Bond, plus interest thereon to the
due date thereof (whether such due date is by reason of maturity or acceleration or upon
redemption as provided in the Indenture) either (i) will have been made or caused to be made in
accordance with the terms thereof or (ii) will have been provided for by irrevocably depositing
with the Trustee in trust and irrevocably set aside exclusively for such payment, (l) moneys
sufficient to make such payment and/or (2) Government Obligations maturing as to principal and
interest in such amount and at such time as will insure, without reinvestment, the availability of
sufficient moneys to make such payment; (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 will have been paid or the payment thereof provided for to the
satisfaction of the Trustee; and (c) an accountant's opinion to the effectthat such moneys and/or
Government Obligations will insure, without reinvestment, the availability of sufficient moneys
to make such payment, and a Favorable Opinion of Bond Counsel with respect to such deposit
will have been delivered to the Trustee. The provisions of this paragraph will apply only if
(x) the Bond with respect to which such deposit is made is to mature or be called for redemption
prior to the next succeeding date on which such Bond is subject to purchase as described herein
under the captions "THE BONDS-Optional Purchase" snd 66-\z[4ndatory Purchase" and
(y) the Company waives, to the satisfaction of the Trustee, its right to convert the interest rate
borne by such Bond.
Notwithstanding the foregoing paragraph, no deposit under clause (a)(ii) of the
immediately preceding paragraph will be deemed a payment of such Bonds as aforesaid until:
(a) proper notice of redemption of such Bonds has been previously given in accordance with the
Indenture, or in the event such Bonds are not to be redeemed within the next succeeding 60 days,
until the Company has 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 Indentures, that the deposit required by clause (aXii) above has been made
with the Trustee and that such 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 such Bonds,
plus interest thereon to the due date thereof; or (b) the maturity of such Bonds.
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Removal of Trustee
The Trustee may be removed at any time by filing with the Trustee so removed, and with
the Issuer, the Company, the Registrar and the Remarketing Agent, 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.
Modifi cations and Amendments
The Indenture may be modified or amended by the Issuer and the Trustee by
supplemental indentures without the consent of the Owners of the Bonds for any of the following
purposes: (a) to cure any formal defect, omission, inconsistency or ambiguity in the Indenture;
(b) to add to the covenants and agreements of the Issuer contained in the Indenture or of the
Company contained in any document, other covenants or agreements thereafter to be observed,
or to assign or pledge additional security for any of the Bonds, or to surrender any right or power
reserved or conferred upon the Issuer or the Company which does not materially adversely affect
the interests of the Owners of the Bonds; (c) to confirrn, as further assurance, any pledge of or
lien on the Revenues or any other moneys, securities or funds subject or to be subjected to the
lien of the Indenture; (d) to comply with the requirements of the Trust Indenture Act of 1939, as
amended; (e) to modif,, alter, amend or supplement the Indenture or any supplemental
indentures in any other respect which in the judgment of the Trustee is not materially adverse to
the Owners of the Bonds; (fl to implement a conversion of the interest rate on the Bonds or to
evidence or give effect to or facilitate the delivery and administration of letters of credit, standby
bond purchase agreements, bond insurance policies, lines of credit, first mortgage bonds or other
instrument of credit enhancement or liquidity support or any combination thereof for the Bonds;
(g) to provide for a depository to accept Bonds in lieu of the Trustee; (h) to modify or eliminate
the book-entry registration system for any of the Bonds; (i) to provide for uncertificated Bonds
or for the issuance of coupons and bearer Bonds or Bonds registered only as to principal, but
only to the extent that such would not adversely affect the Tax-Exempt status of the Bonds; (j) to
secure or maintain ratings for the Bonds from Moody's and/or S&P in both the highest short-
term or commercial paper debt rating category and also in either of the two highest long-term
debt rating categories of the applicable rating agency or agencies, which changes will not restrict,
limit or reduce the obligation of the Issuer to pay the principal of and premium, if any, and
interest on the Bonds or otherwise adversely affect the Owners; (k) to provide demand purchase
obligations to cause the Bonds to be authorized purchases for investment companies; (l) to
provide for any Substitute Collateral and the release of any First Mortgage Bonds; (m) to provide
for the appointment of a successor Trustee, Registrar or Paying Agent; (n) to provide the
procedures required to permit any Owner to separate the right to receive interest on the Bonds
from the right to receive principal thereof and to sell or dispose of such right as contemplated by
Section 1286 of the Code; (o) to provide for any additional procedures, covenants or agreements
necessary to maintain the Tax-Exempt status of the Bonds; and (p) to modify, alter, amend or
supplement the Indenture in any other respect (which in the judgment of the Trustee is not
materially adverse to the Owners), including amendments that would otherwise require the
consent of the Owners, if the effective date of such supplement or amendment is a date on which
all ofthe Bonds affected thereby are subject to mandatory purchase and are so purchased.
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Before the Issuer and the Trustee may enter into any supplemental indenture as described
above, there must have been delivered to the Trustee and the Company an opinion of Bond
Counsel stating that such supplemental indenture is authorized or permitted by the Indenture and
will, upon the execution and delivery thereof, be valid and binding upon the Issuer in accordance
with its terms and will not impair the validity of the Bonds under the Wyoming Act or Montana
Act, as applicable, or adversely affect the Tax-Exempt status of the Bonds. Neither the Issuer
nor the Trustee will be obligated to enter into any such supplemental indenture that would
materially alter their respective rights, duties, or immunities under the Indentures, under the Loan
Agreement or otherwise.
The Trustee will provide written notice of any supplemental indenture to Moody's, S&P,
and the Owners of all Bonds then outstanding at least 15 days prior to the effective date of such
supplemental indenture. Such notice will state the effective date of such supplemental indenture,
will briefly describe the nature of such supplemental indenture and will state that a copy thereof
is on file at the principal office of the Trustee for inspection by the parties mentioned in the
preceding sentence.
Except for any supplemental indenture entered into for the purposes described in the third
preceding paragraph, the Indenture will not be modified, altered, amended, supplemented or
rescinded without the consent of the Owners of a majority of the aggregate principal amount of
Bonds outstanding, who will 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 cuffency of payment of
the principal of, or premium, if any, or interest on any Bond, a change in the terms of the
purchase thereof by the Trustee, or a reduction in the principal amount or redemption price
thereof or the rate of interest thereon, (b) the creation of a claim or lien on or a pledge of the
receipts and revenues of the Issuer under the Loan Agreement ranking prior to or on a parity with
the claim, lien or pledge created by the Indenture, or (c) a reduction in the aggregate principal
amount of Bonds the consent of the Owners of which is required to approve any such
supplemental indenture or which is required to approve any modification, alteration, amendment
or supplement to the Loan Agreement. No such amendment of the lndenture will be effective
without the prior written consent of the Company.
Amendment of the Loan Agreement
Without the consent of or notice to the Owners of the Bonds, the Issuer and the Company
may modify, alter, amend or supplement the Loan Agreement, and the Trustee may consent
thereto, as may be required (a) by the provisions of the Loan Agreement and the Indenture;
(b) for the purpose of curing any formal defect, omission, inconsistency or ambiguity therein;
(c) in connection with any other change therein which in the judgment of the Trustee is not
materially adverse to the Owners of the Bonds; (d) to secure or maintain ratings for the Bonds
from Moody's and/or S&P in both the highest short-term or commercial paper debt rating
category and also in either of the two highest long-term debt rating categories of the applicable
rating agency or agencies, which changes will not restrict, limit or reduce the obligation of the
Issuer to pay the principal of and premium, if any, and interest on the Bonds or otherwise
materially adversely affect the Owners; (e) in connection with the delivery and substitution of
any Substitute Collateral and the release of any First Mortgage Bonds; (f) to add to the covenants
29
and agreements of the Issuer contained in the Loan Agreement or of the Company contained in
any document, other covenants or agreements thereafter to be observed, or to assign or pledge
additional security for any of the Bonds, or to facilitate the delivery and administration under the
Indenture of letters of credit, standby bond purchase agreements, bond insurance policies, lines
of credit, first mortgage bonds or other instruments of credit enhancement or liquidity support or
any combination thereof for the Bonds, or to surrender any right or power reserved or conferred
upon the Issuer or the Company, which will not materially adversely affect the interest of the
Owners of the Bonds; (g) to provide demand purchase obligations to cause the Bonds to be
authorized purchases for investment companies; (h) to provide the procedures required to permit
any Owner to separate the right to receive interest on the Bonds from the right to receive
principal thereof and to sell or dispose of such right as contemplated by Section 1286 of the
Code; (i) to provide for any additional procedures, covenants or agreements necessary to
maintain the Tax-Exempt status of interest on the Bonds; and O to modify, alter, amend or
supplement the Loan Agreement in any other respect (which in the judgment of the Trustee is not
materially adverse to the Owners), including amendments which would otherwise be described
in the next succeeding paragraph, if the effective date of such supplement or amendment is a date
on which all of the Bonds affected thereby are subject to mandatory purchase and are so
purchased.
The Issuer and the Trustee will not consent to any other amendment, change or
modification of the Loan Agreement without the written approval or consent of the Owners of a
majority of the 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 permits, or may 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.
Before the Issuer may enter into, and the Trustee may consent to, any modification,
alteration, amendment or supplement to the Loan Agreement as described in the two
immediately preceding paragraphs, there must have been delivered to the Issuer and the Trustee
an opinion of Bond Counsel stating that such modification, alteration, amendment or supplement
is authorized or permitted by the Loan Agreement or the Indenture and the Wyoming Act or
Montana Act, as applicable, complies with their respective terms, will, upon the execution and
delivery thereof, be valid and binding upon the Issuer in accordance with its terms and will not
adversely affect the Tax-Exempt status of the Bonds.
THE FTRST MORTGAGE BONDS
Pursuant to the provisions of the Indentures and four separote Pledge Agreements each
dated as of June I, 2003 between the Company and the Trustee (individually, a "Pledge
Agreement" ond, collectively, the "Pledge Agreements"), o series of First Mortgage Bonds will
be issued by the Company to secure its obligations under eoch Loan Agreement relating to one
of the four Issues of Bonds. The following summary of certain provisions of the First Mortgage
Bonds and the Company Mortgage referred to below does not purport to be complete and is
qualified in its entirety by reference thereto and includes capitalized terms defined in the
Company Mortgage. All reference in this summary to the Trustee, the Bonds, the Indenture, the
Loan Agreement, the First Mortgqge Bonds and the Pledge Agreement shall be deemed to refer
to the Trustee, the Bonds, the Indenture, the Loan Agreement, the First Mortgage Bonds, the
30
Pledge Agreement and such other documents and parties, respectively, relating to each Issue of
the Bonds.
General
The First Mortgage Bonds will be issued in the same principal amount and will mature on
the same dates as the Bonds. In addition, the First Mortgage Bonds will be subject to redemption
prior to maturity upon the same terms as the Bonds, so that upon any redemption of the Bonds,
an equal aggregate principal amount of First Mortgage Bonds will be redeemed. The First
Mortgage Bonds will bear interest at the same rate, and be payable at the same times, as the
Bonds. See "THE LOAN AGREEMENTS-Loan Payments; The First Mortgage Bonds"
above.
The Company Mortgage provides that in the event of the merger or consolidation of
another electric utility company with or into the Company or the conveyance or transfer to the
Company by another such company of all or substantially all of such company's property that is
of the same character as Property Additions under the Company Mortgage, an existing mortgage
constituting a first lien on operating properties of such other company may be designated by the
Company as a Class "A" Mortgage. Any bonds thereafter issued pursuant to such additional
mortgage would be Class "A" Bonds and could provide the basis for the issuance of Company
Mortgage Bonds (as defined below) under the Company Mortgage.
The Company will receive a credit against its obligations to make any payment of
principal of or premium, if any, or interest on the First Mortgage Bonds and such obligations will
be deemed fully or partially, as the case may be, satisfied and discharged, in an amount equal to
the amount, if any, paid by the Company under the Loan Agreement, or otherwise satisfied or
discharged, in respect of the principal of or premium, if any, or interest on the Company
Mortgage Bonds. The obligations of the Company to make such payments with respect to the
First Mortgage Bonds will be deemed to have been reduced by the amount of such credit.
Pursuant to the provisions of the Indenture, the Loan Agreement and the Pledge
Agreement, the First Mortgage Bonds will be registered in the name of and held by the Trustee
for the benefit of the Owners and will not be transferable except to a successor trustee under the
Indenture. At the time any Bonds cease to be outstanding under the Indenture, the Trustee will
surrender to the Company Mortgage Trustee an equal aggregate principal amount of First
Mortgage Bonds.
Security and Priority
The First Mortgage Bonds and any other first mortgage bonds now or hereafter
outstanding under the Company Mortgage ("Company Mortgage Bonds") are or will be, as the
case may be, secured by a first mortgage Lien on certain utility property owned from time to
time by the Company and by Class "A" Bonds held by the Company Mortgage Trustee, if any.
All Company Mortgage Bonds, including the First Mortgage Bonds, issued and outstanding
under the Company Mortgage are equally and ratably secured.
The Lien of the Company Mortgage is subject to Excepted Encumbrances, including tax
and construction liens, purchase money liens and certain other exceptions.
3l
There are excepted from the Lien of the Company Mortgage all cash and securities
(except those specifically deposited); equipment, materials or supplies held for sale or other
disposition; any fuel and similar consumable materials and supplies; automobiles, other vehicles,
aircraft and vessels; timber, minerals, mineral rights and royalties; receivables, contracts, leases
and operating agreements; electric energy, gas, water, steam, ice and other products for sale,
distribution or other use; natural gas wells; gas transportation lines or other property used in the
sale of natural gas to customers or to a natural gas distribution or pipeline company, up to the
point of connection with any distribution system; the Company's interest in the Wyodak Facility;
and all properties that have been released from the discharged Company Mortgages and Deeds of
Trust, as supplemented, of Pacific Power & Light Company and Utah Power & Light Company
and that PacifiCorp, a Maine corporation, or Utah Power & Light Company, a Utah corporation,
contracted to dispose of, but title to which had not passed at the date of the Company Mortgage.
The Company has reserved the right, without any consent or other action by holders of Bonds of
the Eighth Series or any subsequently created series of Company Mortgage Bonds (including the
First Mortgage Bonds), to amend the Company Mortgage in order to except from the Lien of the
Company Mortgage allowances allocated to steam-electric generating plants owned by the
Company, or in which the Company has interests, pursuant to Title IV of the Clean Air Act
Amendments of 1990, as now in effect or as hereafter supplemented or amended.
The Company Mortgage contains provisions subjecting after-acquired property to the
Lien thereof. These provisions may be limited, at the option of the Company, in the case of
consolidation or merger (whether or not the Company is the surviving corporation), conveyance
or transfer of all or substantially all of the utility property of another electric utility company to
the Company or sale of substantially all of the Company's assets. In addition, after-acquired
property may be subject to a Class "A" Mortgage, purchase money mortgages and other liens or
defects in title.
The Company Mortgage provides that the Company Mortgage Trustee shall have a lien
upon the mortgaged property, prior to the holders of Company Mortgage Bonds, for the payment
of its reasonable compensation and expenses and for indemnity against certain liabilities.
Release and Substitution of Property
Property subject to the Lien of the Company Mortgage may be released upon the basis of:
(a) the release of such property from the Lien of a Class "A" Mortgage;
(b) the deposit of cash or, to a limited extent, purchase money mortgages;
(c) Property Additions, after making adjustments for certain prior lien bonds
outstanding against Property Additions; and/or
(d) waiver of the right to issue Company Mortgage Bonds.
Cash may be withdrawn upon the bases stated in (1), (3) and (4) above. Property that
does not constitute Funded Property may be released without funding other property. Similar
provisions are in effect as to cash proceeds of such property. The Company Mortgage contains
32
special provisions with respect to certain prior lien bonds deposited and disposition of moneys
received on deposited prior lien bonds.
Issuance of Additional Company Mortgage Bonds
The maximum principal amount of Company Mortgage Bonds that may be issued under
the Company Mortgage is not limited. Company Mortgage Bonds of any series may be issued
from time to time on the basis of:
(a) 70% of qualified Property Additions after adjustments to offset
retirements;
(b) Class'oA" Bonds (which need not bear interest) delivered to the Company
Mortgage Trustee;
(c) retirement of Company Mortgage Bonds or certain prior lien bonds; and/or
(d) deposits of cash.
With certain exceptions in the case of clauses (2) and (3) above, the issuance of Company
Mortgage Bonds is subject to Adjusted Net Earnings of the Company for 12 consecutive months
out of the preceding 15 months, before income taxes, being at least twice the Annual Interest
Requirements on all Company Mortgage Bonds at the time outstanding, all outstanding
Class "A" Bonds held other than by the Company Mortgage Trustee or by the Company, and all
other indebtedness secured by a lien prior to the Lien of the Company Mortgage. In general,
interest on variable interest bonds, if any, is calculated using the rate then in effect.
Property Additions generally include electric, gas, steam and/or hot water utility property
but not fuel, securities, automobiles, other vehicles or aircraft, or property used principally for
the production or gathering ofnatural gas.
The issuance of Company Mortgage Bonds on the basis of Property Additions subject to
prior liens is restricted. Company Mortgage Bonds may, however, be issued against the deposit
of Class "A" Bonds.
Certain Covenants
The Company Mortgage contains a number of covenants by the Company for the benefit
of holders of the Company Mortgage Bonds, including provisions requiring the Company to
maintain the Company Mortgaged and Pledged Property as an operating system or systems
capable of engaging in all or any of the generating, transmission, distribution or other utility
businesses described in the Company Mortgage.
Dividend Restrictions
The Company Mortgage provides that the Company may not declare or pay dividends
(other than dividends payable solely in shares of common stock) on any shares of common stockif after giving effect to such declaration or payment, the Company would not be able to pay its
debts as they become due in the usual course of business. Reference is made to the notes to the
JJ
audited consolidated financial statements included in the Company's Annual Report on Form l0-
K incorporated by reference herein for information relating to other restrictions.
Foreign Currency Denominated Company Mortgage Bonds
The Company Mortgage authorizes the issuance of Company Mortgage Bonds
denominated in foreign currencies, provided, however, that the Company deposit with the
Company Mortgage Trustee a currency exchange agreement with an entity having, at the time of
such deposit, a financial rating at least as high as that of the Company that, in the opinion of an
independent expert, gives the Company at least as much protection against currency exchange
fluctuation as is usually obtained by similarly situated borrowers. The Company believes that
such a currency exchange agreement will provide effective protection against cuffency exchange
fluctuations. However, if the other party to the exchange agreement defaults and the foreign
currency is valued higher at the date of maturity than at the date of issuance of the relevant
Company Mortgage Bonds, holders of such Company Mortgage Bonds would have a claim on
the assets of the Company which is greater than that to which holders of dollar-denominated
Company Mortgage Bonds issued at the same time would be entitled.
The Company Mortgage Trustee
The Bank of New York Mellon Trust Company, N.A., serves as trustee under the
Indentures and other indentures and agreements involving the Company and its affiliates.
Modification
The rights of holders of the Company Mortgage Bonds may be modified with the consent
of holders of 600/o of the Company Mortgage Bonds, or, if less than all series of Company
Mortgage Bonds are adversely affected, the consent of the holders of 60%o of the series of
Company Mortgage Bonds adversely affected. In general, no modification of the terms of
payment of principal, premium, if any, or interest and no modification affecting the Lien or
reducing the percentage required for modification is effective against any holder of the Company
Mortgage Bonds without the consent of such holder.
Unless there is a Default under the Company Mortgage, the Company Mortgage Trustee
generally is required to vote Class "A" Bonds held by it, if any, with respect to any amendment
of the applicable Class "A" Company Mortgage proportionately with the vote of the holders of
all Class "A" Bonds then actually voting.
Defaults and Notices Thereof
Each of the following will constitute a "Default" under the Company Mortgage with
respect to the First Mortgage Bonds:
(a) default in payment of principal;
(b) default for 60 days in payment of interest or an installment of any fund
required to be applied to the purchase or redemption of any Company Mortgage Bonds;
34
(c) default in payment of principal or interest with respect to certain prior lien
bonds;
(d) certain events in bankruptcy, insolvency or reorganization;
(e) default in other covenants for 90 days after notice;
(D the existence of any default under a Class "A" Company Mortgage which
permits the declaration of the principal of all of the bonds secured by such Class "A"
Company Mortgage and the interest accrued thereupon due and payable; or
(g) an "Event of Default" as described in clauses (a), (b) or (c) under the
caption "THE INDENTURES-Defaults" above.
An effective default under any Class "A" Mortgage or under the Company Mortgage will
result in an effective default under all such mortgages. The Company Mortgage Trustee may
withhold notice of default (except in payment of principal, interest or funds for retirement of
Company Mortgage Bonds) if it determines that it is not detrimental to the interests of the
holders of the Company Mortgage Bonds.
The Company Mortgage Trustee or the holders of 25Yo of the Company Mortgage Bonds
may declare the principal and interest due and payable on Default, but a majority may annul such
declaration if such Default has been cured. No holder of Company Mortgage Bonds may enforce
the Lien of the Company Mortgage without giving the Company Mortgage Trustee written
notice of a Default and unless the holders of 25o/o of the Company Mortgage Bonds have
requested the Company Mortgage Trustee to act and offered it reasonable opportunity to act and
indemnity satisfactory to it against the costs, expenses and liabilities to be incurred thereby and
the Company Mortgage Trustee shall have failed to act. The holders of a majority of the
Company Mortgage Bonds may direct the time, method and place of conducting any proceedings
for any remedy available to the Company Mortgage Trustee or exercising any trust or power
conferred on the Company Mortgage Trustee. The Company Mortgage Trustee is not required to
risk its funds or incur personal liability if there is reasonable ground for believing that repayment
is not reasonably assured.
The Company must give the Company Mortgage Trustee an annual statement as to
whether or not the Company has fulfilled its obligations under the Company Mortgage
throughout the preceding calendar year.
Voting of the First Mortgage Bonds
So long as no Event of Default under the Indenture has occurred and is continuing, the
Trustee, as holder of the First Mortgage Bonds, shall vote or consent proportionately with what
offrcials of or inspectors of votes at any meeting of bondholders under the Company Mortgage,
or the Company Mortgage Trustee in the case of consents without such a meeting, reasonably
believe will be the vote or consent of the holders of all other outstanding Company Mortgage
Bonds; provided, however, that the Trustee shall not vote in favor of, or consent to, any
modification of the Company Mortgage which, if it were a modification of the Indenture, would
require approval of the Owners of Bonds.
35
I)efeasance
Under the terms of the Company Mortgage, the Company will be discharged from any
and all obligations under the Company Mortgage in respect of the Company Mortgage Bonds of
any series if the Company deposits with the Company Mortgage Trustee, in trust, moneys or
Government Obligations, in an amount sufficient to pay all the principal of, premium (if any)
and interest on, the Company Mortgage Bonds of such series or portions thereof, on the
redemption date or maturity date thereof, as the case may be. The Company Mortgage Trustee
need not accept such deposit unless it is accompanied by an Opinion of Counsel to the effect that
(a) the Company has received from, or there has been published by, the Internal Revenue Service
a ruling or (b) since the date of the Company Mortgage, there has been a change in applicable
federal income tax law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the holders of such Company Mortgage Bonds or the right of
payment of interest thereon (as the case may be) will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, and/or ensuing discharge and will be
subject to federal income tax on the same amount and in the same manner and at the same times,
as would have been the case ifsuch deposit, and/or discharge had not occurred.
Upon such deposit, the obligation of the Company to pay the principal of (and premium,
if any) and interest on such series of Company Mortgage Bonds shall cease, terminate and be
completely discharged.
In the event of any such defeasance and discharge of Company Mortgage Bonds of such
series, holders of Company Mortgage Bonds of such series would be able to look only to such
trust fund for payment of principal of (and premium, if any) and interest, if any, on the Company
Mortgage Bonds of such series.
REMARKETING
General
Each of the Remarketing Agents, Barclays Capital Inc. and Morgan Stanley &Co.LLC,
has agreed with the Company, subject to the terms and provisions of two separate Remarketing
Agreements, each dated May 22, 2013, between the Company and each of the Remarketing
Agents, to use its best efforts, as remarketing agent, to determine the rates of interest on the
applicable Bonds and use its best efforts to remarket all tendered Bonds. The Company will
compensate each Remarketing Agent for its services in conjunction with the reoffering described
by this Reoffering Circular and for the setting of the Weekly Interest Rate and the remarketing of
tendered Bonds during the Weekly Interest Rate Period. The Company also has agreed to
indemniff each of the Remarketing Agents against certain liabilities and expenses, including
liabilities arising under federal and state securities laws, or to contribute to payments the
Remarketing Agents may be required to make in respect thereof, in connection with the
reoffering of the Bonds. All further references under this heading to the Remarketing Agent, the
Remarketing Agreement and the Bonds shall be deemed to refer to the Remarketing Agent, the
Remarlreting Agreement and the Bonds respectively relating to each Issue of the Bonds.
36
The Company intends to purchase all of the Bonds on the Conversion Date, whether or
not tendered by the existing Bondholders, and deliver them to the Remarketing Agent for
remarketing.
The Remarketing Agent intends to reoffer the Bonds to the public initially at the
reoffering price set forth on the cover page of this Reoffering Circular. After the Bonds are
initially reoffered to the public, the Remarketing Agent may offer and sell Bonds at prices lower
than the public offering price stated on the cover page hereof.
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.
Special Considerations
The Remarketing Agent ,s 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 Indentures and the Remarketing Agreements), 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 potentialpurchasers of Bonds.
The Remarketing Agent May Purchase Bonds for lts Own Account. 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 account. The Remarketing Agent is
permiffed, but not obligated, to purchase tendered Bonds for its own account 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 Dffirent Prices on Any Dote Including an Interest Rate
Determination Date. Pursuant to each Indenture and Remarketing Agreement, for each issue of
Bonds, 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
37
determination date. The interest rate will reflect, among other factors, the level of market
demand for the applicable 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 Moy be Limited;
No Assurance of Ability to Remarket. 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. Moreover, there is no assurance
that the Remarketing Agent will be able to remarket Bonds tendered for purchase. The only
source of funds to purchase Bonds not remarketed is as described under "THE BONDS-
Purchase of Bonds," and no leffer of credit or other external credit is available. No Beneficial
Owner of any Bond shall have any rights or claims against the Issuer, the Trustee or the
Remarketing Agent as a result of the Remarketing Agent not purchasing the Bonds.
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.
TAX EXEMPTION
The Series 1984 Bonds
In connection with the original issuance and delivery of the Series 1984 Bonds, Chapman
and Cutler, as Bond Counsel, rendered an opinion that based on then existing law, including
current rulings and official interpretations of law by the Internal Revenue Service, interest on the
Series 1984 Bonds would not be includable in the federal gross income of the Owners of such
Series 1984 Bonds and consequently would be exempt from then-existing federal income
taxation, except with respect to interest on any Series 1984 Bond for any period during which
such Series 1984 Bond is held by aperson who is a substantial user of the Facilities (as defined
in such opinion) or any person considered to be related to such person (within the meaning of
Section 103(bX13) of the 1954 Code).
Bond Counsel also rendered an opinion that, under then-existing laws of the State of
Wyoming, the State of Wyoming imposes no income taxes which would be applicable to the
Series 1984 Bonds.
38
A copy of the opinion letter provided by Bond Counsel in connection with the original
issuance and delivery of the Series 1984 Bonds is setforth in Appendix B-1, but inclusion of such
copy of the opinion letter is not to be construed as a reaffirmation of the opinions contained
therein. The opinion letter speaks only as of its date.
Chapman and Cutler LLP will deliver an opinion in connection with conversion of the
Series 1984 Bonds to the Weekly Interest Rate to the effect that such conversion (1) is authorized
or permitted by the Series 1984 Indenture and the Wyoming Act and (2) will not, in and of itself,
adversely affect the Tax-Exempt status of interest on the Series 1984 Bonds. Except as
necessary to render the foregoing opinion (and the related opinion dated May 8, 2013), Chapman
and Cutler LLP has not reviewed any factual or legal matters relating to the prior opinion of
Bond Counsel or the Series 1984 Bonds subsequent to their date of issuance other than in
connection with (a) the adjustment of the interest rate described in the opinion dated May 2,
2003, (b)the execution and delivery of the First Supplemental Trust Indenture, described in the
opinion dated March3, 2003, and (c) the execution and delivery of the Second Supplemental
Indenture and the First Supplemental Loan Agreement, described in the opinion dated June 2,
2003. The proposed form of such opinion is set forth in Appendix C-I.
The Series 1986 Bonds
In connection with the original issuance and delivery of the Series 1986 Bonds, Chapman
and Cutler, as Bond Counsel, rendered an opinion that assuming compliance with certain
covenants made by the Issuer and the Company to satisfy pertinent requirements of then-existing
law, interest on the Series 1986 Bonds would not be, under then-existing law, includable in the
gross income of the Owners thereof for federal income tax purposes, and therefore would be
exempt from then-existing federal income taxation, (i) except for interest on any Series 1986
Bond for any period during which such Series 1986 Bond is owned by a person who is a
substantial user of the Colstrip Units 3 and 4 Pollution Control Facilities (as defined in the
Series 1986 Indenture) or any person considered to be related to such person (within the meaning
of Section 147(a) of the Code) and (ii)except that interest on the Series 1986 Bonds would be
included as an item of tax preference in computing the alternative minimum tax for individuals
and corporations, in computing the environmental tax imposed on certain corporations and in
computing the "branch profits tax" imposed on certain foreign corporations, but interest on the
Series 1986 Bonds would not be taken into account in computing an adjustment used in
determining the corporate alternative minimum tax.
Bond Counsel also rendered an opinion that, under then-existing Montana laws, the
Series 1986 Bonds, the transfer thereof and any income therefrom, would be exempt from
taxation within the State of Montana, except for gift, estate, succession or inheritance taxes or
any other taxes not levied or assessed directly on the Series 1986 Bonds, the transfer thereof, the
income therefrom or any profits made on the sale thereof.
A copy of the opinion letter provided by Bond Counsel in connection with the original
issuance and delivery of the Series 1986 Bonds is setforth in Appendix B-2, but inclusion of such
copy of the opinion letter is not to be construed as a reofirmation of the opinions contained
therein. The opinion letter speal<s only as of its date.
39
Chapman and Cutler LLP will deliver an opinion in connection with conversion of the
Series 1986 Bonds to the Weekly Interest Rate to the effect that such conversion is (l) authorized
or permitted by the Series 1986 Indenture and the Montana Act and (2) will not, in and of itself,
adversely affect the Tax-Exempt status of interest on the Series 1986 Bonds. Such opinion also
addresses the exemption of interest on the Series 1986 Bonds from the Montana individual
income tax. Except as necessary to render the foregoing opinion (and the related opinion dated
May 8, 2013), Chapman and Cutler LLP has not reviewed any factual or legal matters relating to
the prior opinion of Bond Counsel or the Series 1986 Bonds subsequent to their date of issuance
other than with respect to (a) the adjustment of the interest rate described in the opinions dated
September 3,2002, and May 2,2003, (b) the execution and delivery of the First Supplemental
Trust Indenture, described in the opinion dated March 3, 2003, and (c) the execution and delivery
of the Second Supplemental Indenture and the First Supplemental Loan Agreement, described in
the opinion dated June 2,2003. The proposed form of such opinion is set forth in AppendixC-2.
The Series 1995 Converse County Bonds
In connection with the original issuance and delivery of the Series 1995 Converse County
Bonds, Chapman and Cutler, as Bond Counsel, rendered an opinion that subject to compliance
by the Company, Converse County and Lincoln County with certain covenants made to satisff
pertinent requirements of the Code, under then-existing law, interest on the Series 1995
Converse County Bonds would not be includable in the gross income of the Owners thereof for
federal income tax purposes, except for interest on any Series 1995 Converse County Bond for
any period during which such Series 1995 Converse County Bond is owned by a person who is a
substantial user ofthe Project or the Plant or any person considered to be related to such person
(within the meaning of Section 147(a) of the Code). The interest on the Series 1995 Converse
County Bonds would be included, however, as an item of tax preference in computing the federal
alternative minimum tax for individuals and corporations under the Code.
Bond Counsel also rendered an opinion that, under then-existing Wyoming law, the State
of Wyoming imposed no income taxes which would be applicable to the Series 1995 Converse
County Bonds. Bond Counsel expressed no opinion with respect to any other taxes imposed by
the State of Wyoming or any political subdivision thereof. Ownership of the Series 1995
Converse County Bonds may result in other Wyoming tax consequences to certain taxpayers,
and Bond Counsel expressed no opinion regarding any such collateral consequences arising with
respect to the Series 1995 Converse County Bonds.
A copy of the opinion letter provided by Bond Counsel in connection with the original
issuonce and delivery of the Series 1995 Converse County Bonds is set forth in Appendix B-3,
but inclusion of such copy of the opinion letter is not to be construed as a reffirmation of the
opinions contained therein. The opinion letter speaks only as of its date.
Chapman and Cutler LLP will deliver an opinion in connection with conversion of the
Series 1995 Converse County Bonds to the Weekly Interest Rate to the effect that such
conversion (l) is authorized or permitted by the Series 1995 Converse County Indenture and
Wyoming Act and (2) will not, in and of itself, adversely affect the Tax-Exempt status of the
interest on Series 1995 Converse County Bonds. Except as necessary to render the foregoing
opinion (and the related opinion dated May 8, 2013), Chapman and Cutler LLP has not reviewed
40
any factual or legal matters relating to the prior opinion of Bond Counsel or the Series 1995
Converse County Bonds subsequent to their date of issuance other than with respect to (a) the
adjustment of the interest rate described in the opinion dated May 2,2003, (b) the execution and
delivery of the First Supplemental Trust Indenture, described in the opinion dated March 3,
2003, and (c) the execution and delivery of the Second Supplemental lndenture and the First
Supplemental Loan Agreement, described in the opinion dated June 2,2003. The proposed form
of such opinion is set forth in Appendix C-3.
The Series 1995 Lincoln County Bonds
In connection with the original issuance and delivery of the Series 1995 Lincoln County
Bonds, Chapman and Cutler, as Bond Counsel, rendered an opinion that subject to compliance
by the Company, Lincoln County and Converse County with certain covenants made to satisff
pertinent requirements of the Code, under then-existing law, interest on the Series 1995 Lincoln
County Bonds would not be includable 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 Project or the Plant or any person considered
to be related to such person (within the meaning of Section ru7@) of the Code). The interest on
the Series 1995 Lincoln County Bonds would be included, however, as an item of tax preference
in computing the federal alternative minimum tax for individuals and corporations under the
Code.
Bond Counsel also rendered an opinion that, under then-existing Wyoming law, the State
of Wyoming imposed no income taxes which would be applicable to the Series 1995 Lincoln
County Bonds. Bond Counsel expressed no opinion with respect to any other taxes imposed by
the State of Wyoming or any political subdivision thereof. Ownership of the Series 1995
Lincoln County Bonds may result in other Wyoming tax consequences to certain taxpayers, and
Bond Counsel expressed no opinion regarding any such collateral consequences arising with
respect to the Series 1995 Lincoln County Bonds.
A copy of the opinion letter provided by Bond Counsel in connection with the original
issuance and delivery of the Series 1995 Lincoln County Bonds is set forth in Appendix B-4, but
inclusion of such copy of the opinion letter is not to be construed as o reffirmation of the
opinions contained therein. The opinion letter speaks only as of its date.
Chapman and Cutler LLP will deliver an opinion in connection with conversion of the
Series 1995 Lincoln County Bonds to the Weekly Interest Rate to the effect that such conversion
(l) is authorized or permitted by the Series 1995 Lincoln County Indenture and the Wyoming
Act and (2)will not adversely affect the Tax-Exempt status of interest on the Series 1995
Lincoln County Bonds. Except as necessary to render the foregoing opinion (and the related
opinion dated May 8, 2013), Chapman and Cutler LLP has not reviewed any factual or legal
matters relating to the prior opinion of Bond Counsel or the Series 1995 Lincoln County Bonds
subsequent to their date of issuance other than with respect to (a) the adjustment of the interest
rate described in the opinion dated May 2, 2003, (b) the execution and delivery of the First
Supplemental Trust lndenture, described in the opinion dated March 3, 2003 and (c) the
execution and delivery of the Second Supplemental Indenture and the First Supplemental Loan
41
Agreement, described in the opinion dated June 2,2003. The proposed form of such opinion is
set forth in Appendix C-4.
AII Bonds
In rendering opinions, Bond Counsel relied upon certifications of the Company with
respect to certain material facts solely with the Company's knowledge relating to the Projects
and application of the proceeds of the Bonds and, in certain cases, the proceeds of related issues
of Bonds or previously issued bonds. Neither the Bond Counsel nor any other law firm has
verified or will verify that the Company has complied with such certifications.
From time to time, there are legislative proposals in the Congress of the United States
that, if enacted, could alter or amend the federal tax matters referred to above or adversely affect
the market value of the Bonds. It cannot be predicted whether or in what form any such proposal
might be enacted or whether, if enacted, it would apply to bonds issued prior to enactment.
Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending
or proposed federal tax legislation. Bond counsel expresses no opinion regarding any pending or
proposed federal tax legislation.
CONTINUING DISCLOSURE
On the Conversion Date, the Company will enter into a Continuing Disclosure
Agreement (the "Undertaking") for the benefit of the Beneficial Owners of the Bonds to send
certain information annually and to provide notice of certain events to certain information
repositories pursuant to the requirements of Section (b)(5) of Rule 15c2-12 (the "Rule") adopted
by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended. The information to be provided on an annual basis, the events which will be noticed
on an occurrence basis and other terms of the Undertaking, including termination, amendment
and remedies, are set forth in Appendix D-Form of Continuing Disclosure Undertaking.
A failure by the Company to comply with the Undertaking will not constitute an Event of
Default under the Indentures or the Loan Agreements, and Beneficial Owners of the Bonds are
limited to the remedies described in the Undertaking. A failure by the Company to comply with
the Undertaking must be reported in accordance with the Rule and must be considered by any
broker, dealer or municipal securities dealer before recommending the purchase or sale of the
Bonds in the secondary market. Consequently, such a failure may adversely affect the
transferability and liquidity of the Bonds and their market price.
The Company is in compliance with each and every continuing disclosure undertaking
previously entered into by it pursuant to the Rule.
CERTAIN LEGAL MATTERS
Certain legal matters in connection with the remarketing will be passed upon by
Chapman and Cutler LLP, as Bond Counsel to the Company. Certain legal matters will be
passed upon for the Company by Paul J. Leighton, Esq., as counsel for the Company. Certain
legal matters will be passed upon for the Remarketing Agents by Kutak Rock LLP.
42
APPENDIX A
PACIFICORP
The following information concerning PocifiCorp (the "Company") has been provided
by representatives of the Company and has not been independently confirmed or verified by the
Remarlreting Agent, the Issuer or any other party. No representation is made herein os to the
occurocy, completeness or adequacy of such information or as to the absence of moteriol
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 coruect as of any time after
the date hereof.
The Company, which includes PacifiCorp and its subsidiaries, is a United States
regulated electric company serving 1.8 million retail customers, including residential,
commercial, industrial, irrigation and other customers in portions of the states of Utah, Oregon,
Wyoming, Washington, Idaho and California. The Company owns, or has interests in,
75 thermal, hydroelectric, wind-powered and geothermal generating facilities, with a net owned
capacity of 10,579 megawatts. The Company 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 to
balance and optimize the economic benefits of electricity generation, retail loads and existing
wholesale transactions. The Company is subject to comprehensive state and federal regulation.
The Company's subsidiaries support its electric utility operations by providing coal mining
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 [nc.
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
related industries; 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 rate cases and other proceedings conducted by
regulatory commissions or other governmental and legal bodies and the Company's ability to
recover costs in rates in a timely manner; changes in economic, industry or weather conditions,
as well as demographic trends and new technologies, 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 its generation resources with its retail load
obligations; performance and availability of the Company's generating facilities, including the
impacts of outages and repairs, transmission constraints, weather, including wind and
hydroelectric conditions, and operating conditions; hydroelectric conditions and the cost,
feasibility and eventual outcome of hydroelectric relicensing proceedings, that could have a
significant impact on generating capacity and cost and the Company's ability to generate
electricity; changes in prices, availability and demand for wholesale electricity, coal, natural gas,
other fuel sources and fuel transportation that could have a significant impact on 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 certain contracts used to
mitigate or manage volume, price and interest rate risk, including increased collateral
requirements, and changes in commodity prices, interest rates and other conditions that affect the
fair value of certain contracts; the impact of inflation on costs and the Company's ability to
recover such costs in rates; increases in employee healthcare costs, including the implementation
of the Affordable Care Act; 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, fires, landslides, 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 191 0 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 renamed PacifiCorp, which is the operating entity today.
AvATLABLE INroRu.ltIoN
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 filed by the Company
may be inspected and copied at public reference rooms maintained by the Commission in
Washington, D.C. 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
INcoRpona.TroN oF Cnnrux DocunmNrs nv RrrnRrNcn
The following documents filed by the Company with the Commission pursuant to the
Exchange Act are incorporated herein by reference:
l. Annual Report on Form l0-K for the fiscal year ended December 31,2012.
2. Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,2013.
3. All other documents filed by the Company pursuant to Sections 13(a), l3(c), 14 or l5(d)
of the Exchange Act after the date hereof.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or l5(d) of the
Exchange Act after the filing of the Annual Report on Form l0-K for the fiscal year ended
December 31,2012 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 oolncorporated Documents"),
provided, however, that the documents enumerated above and the documents subsequently filed
by the Company pursuant to Sections l3(a), 13(c), 14 or l5(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 l0-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 apart 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 lncorporated 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, Suite 1900, 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.
APPENDIX 8.1
Law Offices of
CHAPMAN AND CUTLER
50 South Main Street, Salt Lake City, Utah 84144-0402
Telephone [phone]
Facsimile (80 I ) 533-9595Theodore S. Chapman
187'7-1943
Henry E. Cutler
1879-1959
Chicago
l1l West Monroe Street
Chicago, Illinois 60603
(3 l2) 84s-3000
December 12,1984
Re: $15,000,000 Sweetwater County, Wyoming, Pollution,
Control Revenue Bonds (PacifiCorp Project) Series 1984
We hereby certify that we have examined certified copy of the proceedings of record of
the Board of County Commissioners of Sweetwater County, Wyoming (the "Count!"), d political
subdivision organized and existing under the laws of the State of Wyoming, preliminary to the
issuance by the County of its Pollution Control Revenue Bonds (PacifiCorp Project) Series 1984,
in the aggregate principal amount of $15,000,000 (the "Bonds"). The Bonds are being issued
pursuant to the provisions of Sections l5-l-701 to l5-17-10, inclusive, Wyoming Statutes, as
amended and supplemented (the "Act"), for the purpose of financing a portion of the cost of an
undivided interest (the "Project") of PacifiCorp, a Maine corporation (the "Company"), in
certain pollution control facilities (the "Facilities") to be acquired and improved as part of the
Jim Bridger coal-fired steam electric generating plant (the "Plant") located in the County, and
for the purpose of paying costs and expenses incidental to the issuance of the Bonds.
The Bonds mature on December 1,2014, 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 as fully
registered Bonds in the denomination of $100,000 or any integral multiple thereof (except that
upon conversion of the interest borne by the Bonds to a fixed interest rate, as permitted by the
hereinafter defined Indenture, the Bonds are issuable as fully registered bonds in the
denomination of $5,000 or any integral multiple thereof).
From such examination of the proceedings of the Board of County Commissioners of
the County referred to above and from an examination of the Act, we are of the opinion that
such proceedings show lawful authority for said issue of Bonds under the laws of the State of
Wyoming now in force.
Law Offices of
CHAPMAN AND CUTLER
Pursuant to a Loan Agreement by and between the Company and the County, dated as of
December l, 1984 (the "Loan Agreement"), the County has agreed to loan the proceeds from the
sale of the Bonds to the Company to pay a portion of the costs of the Project incurred by the
Company, 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
County, and, assuming the due authorization, execution and delivery by the Company, is a valid
and binding obligation of the County, enforceable in accordance with its terms, subject to the
qualification that the enforcement thereof may be limited by bankruptcy, insolvency and other laws
affecting creditors' rights generally or usual equity principles in the event equitable remedies should be
sought.
We have also examined an executed counterpart of the Indenture of Trust, dated as of
December 1, 1984 (the"Indenture"), by and between the County and Irving Trust Company, as
Trustee (the "Trustee"), securing the Bonds and setting forth the covenants and undertakings of
the County in connection with the Bonds and making provision under certain conditions for the
purchase of the Bonds by a Remarketing Agent (the " Remarketing Agent") or the Trustee and for
the establishing of the rate of interest borne by the Bonds. Under the Indenture, the revenues and
receipts derived by the County under the Loan Agreement (except for certain fees and expenses
and indemnification proceeds), together with certain of the rights of the County thereunder, are
pledged and assigned to the Trustee as security for the Bonds. From such examination, we are of
the opinion that the proceedings of the Board of County Commissioners of the County 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 County, enforceable in accordance with its terms, subject
to the qualification that the enforcement thereof may be limited by bankruptcy, insolvency, and
other laws affecting creditors' rights generally or usual equity principles in the event equitable
remedies should be sought, and 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 County under the
Loan Agreement, the Company has caused to be delivered to the Trustee an irrevocable Letter of
Credit (the "Letter of Credit") of The Sumitomo Bank, Limited, Seattle Branch (the "Banlf')
under which the Trustee is permitted under certain conditions to draw an amount sufficient to
pay the principal of the Bonds and up to 62 days' interest accrued on the Bonds calculated at the
maximum rate of interest permitted on the Bonds. Delivery of the Letter of Credit, however,
does not release the Company from its payment obligation under the Loan Agreement. The
Letter of Credit expires at the earlier of December 27, 1994, or the occurrence of certain events
specified therein, except that under the terms thereof the Letter of Credit may be extended as
provided therein.
We further certify that we have examined an executed and authenticated Bond of said
issue 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 County according to the import thereof and, as provided in
the Indenture and the Bonds, are payable by the County solely out of payments to be made by the
B-t-2
Law Offices of
CHAPMAN AND CUTLER
Company under the Loan Agreement, except to the extent paid from moneys drawn by the
Trustee under the Letter of Credit or from the proceeds of the sale of the Bonds and income from
the investment thereof.
In our opinion, based on existing law, including current rulings and official
interpretations of law by the Internal Revenue Service, interest on the Bonds is not includable in
the Federal gross income of the owners of the Bonds and consequently is exempt from present
Federal income taxation, except with respect to interest on any Bond for any period during which
such Bond is owned by a person who is a substantial user of the Facilities or any person
considered to be related to such person within the meaning of Section 103 of the lnternal
Revenue Code of 1954, as amended (the "Code"). In concluding that the interest on the Bonds is
exempt from present Federal income taxes, we have relied upon certificates of the Company with
respect to the application of the proceeds of the Bonds and with respect to certain material facts
solely within the Company's knowledge regarding the Facilities.
In our opinion, under existing laws of the State of Wyoming, the State of Wyoming
imposes no income taxes which would be applicable to the Bonds.
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 Tanaka & Takahashi and
by Davis, Wright, Todd, Riese & Jones.
Stoel, Rives, Boley, Fraser & Wyse, counsel to the Company, has delivered an opinion of
even date herewith concerning the obligations of the Company under the Loan Agreement. In
rendering this opinion we have relied upon said opinion with respect to, among other things:
(i) the due organization of the Company, (ii) the good standing of the Company in the State of
Wyoming and in the State of Maine, (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.
Leonard A. Kaumo, County Attorney, has delivered an opinion of even date herewith
with respect to the obligations of the County under the Bonds, the Loan Agreement and the
Indenture.
We express no opinion as to the title to, the description of or the existence of any liens,
charges or encumbrances on the Project, the Facilities or the Plant of which they are apart.
CrupunNaNo Curr-sR
B-l-3
Theodore S. Chapman
1877-1943
Henry E. Cutler
l 879- l 959
APPENDIXB-2
Law Offices of
CHAPMAN AND CUTLER
50 South Main Street, Salt Lake City, Utah 84144-0402
Telephone [phone]
Facsimile (80 I ) 533-9595
Chicago
1l I West Monroe Street
Chicago, Illinois 60603
[phone]
December 29, t986
Re: $8,500,000 Flexible Rate Demand Pollution Control Bonds
(PacifiCorp Colstrip Project), Series 1986, of the City of Forsyth, Rosebud
County, Montana
We hereby certify that we have examined certified copy of the proceedings of record of
the City Council of the City of Forsyth, Rosebud County, Montana (the "Issuer"), d municipal
corporation and political subdivision of the State of Montana, created by and existing under the
laws of the State of Montana, preliminary to the issuance by the Issuer of its Flexible Rate
Demand Pollution Control Revenue Bonds (PacifiCorp Colstrip Project), Series 1986, in the
aggregate principal amount of $8,500,000 (the "Bonds"). The Bonds are being issued pursuant
to the provisions of Sections 90-5-101 to 90-5-114, inclusive, Montana Code Annotated, as
amended and supplemented (the "Act"), for the purpose of financing a portion of the cost of the
undivided interest (the "Project") of PacifiCorp, a Maine corporation (the "Company"), in
certain pollution control and solid waste disposal facilities (the "Colstrip Units 3 ond 4 Pollution
Control Facilities") acquired and improved as part of Units 3 and 4 of the coal-fired steam
electric generating plant (the *Colstrip Units 3 and 4 Project") located near Colstrip, in Rosebud
County, Montana.
The Bonds mature on December 1,2016, 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 only as fully
registered Bonds without coupons in the denomination of S100,000 or any integral multiple
thereof (except that upon conversion of the interest rate borne by the Bonds to a Fixed Rate, as
defined in the hereinafter defined Indenture, the Bonds are issuable in the denomination of
$5,000 or any integral multiple thereof).
From such examination of the proceedings of the City Council 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 Montana now in force.
Law Offices of
C}IAPMAN AND CUTLER
Pursuant to a Loan Agreement by and between the Company and the Issuer, dated as of
December 1, 1986 (the "Loan Agreement"), the Issuerhas agreed to loan the proceeds from the
sale of the Bonds to the Company to provide the moneys necessary for the financing of a portion
of the cost of the Project, 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 legal,
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.
We have also examined executed counterparts of the Trust Indenture, dated as of
December l, 1986 (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 purchase of the Bonds by a Placement Agent (the "Placement Agent"), for the
fixing of a Short-Term Rate (as defrned in the Indenture) to be borne by the Bonds, which
Short-Term Rate may be a Daily Rate, a Weekly Rate, a Monthly Rate or a Variable-Term Rate
(each as defined in the Indenture), and for the conversion of the interest rate borne by the Bonds
to a different Short-Term Rate or to a Medium-Term Rate (as defined in the Indenture) or a
Fixed Rate under certain conditions. The Indenture provides that the Bonds bear interest at the
Daily Rate until the interest rate borne by the Bonds is convefted to a different Short-Term Rate
or to a Medium-Term Rate or a Fixed 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 thatthe proceedings of the City Council of the lssuer referred to above show lawful
authority for the execution and delivery of the Indenture, that the Indenture is a legal, 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, 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 The Mitsubishi Bank, Ltd., acting through its Los Angeles
Agency (the "Bank"), under which the Trustee, the Paying Agent (as defined in the Indenture) or
Morgan Guaranty Trust Company of New York, as Tender Agent (the "Tender Agent") are
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 Tender Agent to pay the purchase price or portion of the
purchase price equal to the principal amount of Bonds delivered to it for purchase and not
placed, plus (b) an amount equal to 123 days' accrued interest on the outstanding Bonds (i) to
pay interest on the Bonds or (ii) to enable the Tender Agent to pay the portion of the purchase
B-2-2
Law Offices of
CHAPMAN AND CUTLER
price of the Bonds delivered to it 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 Letter of Credit expires on December29, 1991, except that
under the terms thereof the Letter of Credit may be extended as provided therein.
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, the Tender Agent or the Paying Agent under the Letter of Credit.
It is our opinion that, assuming compliance with certain covenants made by the lssuer
and the Company to satisff pertinent requirements of present law, interest on the Bonds is not,
under present law, includible in gross income of the owners thereof for federal income tax
purposes, and therefore is exempt from present federal income taxation, 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 Colstrip Units 3 and 4 Pollution Control Facilities or any person considered to be related
to such person (within the meaning of Section 147(a) of the Internal Revenue Code of 1986) and
except that interest on the Bonds will be included as an item of tax preference in computing the
alternative minimum tax for individuals and corporations, in computing the environmental tax
imposed on certain corporations and in computing the "branch profits tax" imposed on certain
foreign corporations, but interest on the Bonds will not be taken into account in computing an
adjustment used in determining the corporate alternative minimum tax.
In concluding that the Colstrip Units 3 and 4 Pollution Control Facilities constitute "solid
waste disposal facilities" or "air or water pollution control facilities" within the meaning of
Section 103(bX4)(E) and (F) of the Internal Revenue Code of 1954, as amended, we have
requested and reviewed a certificate of the Company and an engineering report by Russell B.
MacPherson, P.E. and Charles E. Wagner, P.E., describing, among other things, the function and
costs of the Project and the Colstrip Units 3 and 4 Pollution Control Facilities and their relation
to the Colstrip Units 3 and 4 Project. Our review of the certificate and report included
discussions with Russell B. MacPherson, P.E. and Charles E. Wagner, P.E., who represented
they were familiar with the Project and the Colstrip Units 3 and 4 Pollution Control Facilities and
their relationship to the Colstrip Units 3 and 4 Project. Insofar as our opinion as to whether the
Colstrip Units 3 and 4 Pollution Control Facilities constitute solid waste disposal facilities or air
or water pollution control facilities is dependent upon engineering facts or conclusions and other
matters solely within the knowledge of the Company and Russell B. MacPherson, P.E. and
Charles E. Wagner, P.E., we have relied upon the certificate and report.
In our opinion, under present Montana laws, the Bonds, their transfer and any income
therefrom, are exempt from taxation within the State of Montana, except for gift, estate,
succession or inheritance taxes or any other taxes not levied or assessed directly on the Bonds,
the transfer thereof, the income therefrom or any profits made on the sale thereof.
B-2-3
Law Offices of
CHAPMAN AND CUTLER
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 Towne, Dolgin, Sawyier
& Horton and by Braun, Moriya, Hoashi & Kubota.
Stoel, Rives, Boley, Fraser & Wyse, counsel to the Company, have delivered an opinion
of even date herewith concerning the obligations of the Company under the Loan Agreement. In
rendering this opinion we have relied upon said opinion with respect to, among other things:
(i) the due organization of the Company, (ii) the good standing of the Company in the State of
Montana and in the State of Maine, (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.
William F. Meisburger, City Attorney, 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, the Colstrip Units 3 and 4 Pollution Control Facilities or
the Colstrip Units 3 and 4 Project of which they are apart.
CrnpueN aNo Curr-en
B-2-4
Theodore S. Chapman
1877-1943
Henry E. Cutler
l 879-1 959 * *
APPENDIX B-3
Law Offices of
CHAPMAN AND CUTLER
50 South Main Street, Salt Lake City, Utah 84144-0402
Telephone [phone]
Facsimile [phone]
Chicago
I I I West Monroe Street
Chicago, Illinois 60603
(3 l2) 84s-3000
November 17,1995
$5,300,000 Converse County, Wyoming,
Environmental Improvement Revenue Bonds
(PacifiCorp Project) Series 1995
We hereby certify that we have examined certified copy of the proceedings of record of
the Board of County Commissioners of Converse County, Wyoming (the "Issuer"), a political
subdivision of the State of Wyoming, preliminary to the issuance by the Issuer of its
Environmental Improvement Revenue Bonds (PacifiCorp Project) Series 1995, in the aggregate
principal amount of $5,300,000 (the ooBonds"). The Bonds are being issued pursuant to the
provisions of Sections l5-l-701 to l5-l-710, inclusive, Wyoming Statutes (1977), as amended
and supplemented (the "Act"), for the purpose of financing a portion of the cost of acquiring and
improving certain solid waste disposal facilities (the"Projecf') at the Dave Johnston Plant (the
"Plont") in Converse County, Wyoming, which is owned and operated by PacifiCorp, an Oregon
corporation (the "Compont''). The Bonds are being issued simultaneously with another issue of
environmental improvement revenue bonds being issued by Lincoln County, Wyoming (the
"Other Issuer"), for the benefit of the Company.
The Bonds mature on November 1,2025, bear interest from time to time computed as set
forth in each of the Bonds and are subject to purchase and redemption prior to maturity at the
times, in the manner and upon the terms set forth in each of the Bonds. The Bonds are issuable
in authorized denominations as provided in the hereinafter-defined Indenture as fully-registered
Bonds without coupons.
From such examination of the proceedings of the Board of County Commissioners of the
Issuer referred to above and from an examination of the Act, we are of the opinion that such
proceedings show lawful authority for such issue of Bonds under the laws of the State of
Wyoming now in force.
Pursuant to a Loan Agreement, dated as of November l, 1995 (the "Loan Agreement"),
between the Company and the Issuer, the Issuer has agreed to loan the proceeds from the sale of
Re:
Law Offices of
CHAPMAN AND CUTLER
the Bonds to the Company for the purpose of financing a portion of the cost of the Project, and
the Company has agreed to pay amounts at least sufficient to pay the principal of, premium, if
any, and interest on the Bonds when due, whether at stated maturity, call for redemption or
acceleration. The Loan Agreement (an executed counterpart of which has been examined by us)
has, in our opinion, been duly authorized, executed and delivered by the Issuer, and, assuming
the due authorization, execution and delivery by the Company, is a valid and binding obligation
of the Issuer, enforceable in accordance with its terms, subject to the qualification that the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization and other similar
laws relating to the enforcement of creditors' rights generally or usual equity principles in the
event equitable remedies should be sought.
We have also examined an executed counterpart of the Trust Indenture, dated as of
November l, 1995 (the "Indenture"), 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 "Remarkzting Agenf'),
for the determination of the interest rate to be borne by the Bonds from time to time, which
interest rate may be a Daily Interest Rate, a Weekly Interest Rate, a Flexible Interest Rate or a
Term Interest Rate (each as defined in the Indenture), and for the conversion of the interest rate
determination method under certain conditions. The Indenture provides that the Bonds will
initially bear interest at a Daily Interest Rate until conversion to a different interest rate
determination method. Under the Indenture, the revenues derived by the Issuer under the Loan
Agreement, together with certain of the rights of the Issuer thereunder, are pledged and assigned
to the Trustee as security for the Bonds. From such examination, we are of the opinion that the
proceedings of the Board of County Commissioners of the Issuer referred to above show lawful
authority for the execution and delivery of the Indenture, that the Indenture is a valid and binding
obligation of the Issuer, enforceable in accordance with its terms, subject to the qualification that
the enforcement thereof may be limited by bankruptcy, insolvency, reorganization and other
similar laws relating to the enforcement of creditors' rights generally or usual equity principles in
the event equitable remedies should be sought, that the Bonds have been validly issued under the
Indenture, and that all requirements under the Indenture precedent to delivery of the Bonds have
been satisfied.
We further certify that we have examined the form of bond prescribed in the Indenture
and find the same in due form of law and in our opinion the Bonds, to the amount named, are
valid and legally binding upon the Issuer according to the import thereof and, as provided in the
Indenture and the Bonds, are payable by the Issuer solely out of payments to be made by the
Company under the Loan Agreement and all moneys and investments held by the Trustee under
the Indenture or otherwise available to the Trustee for the payment thereof.
It is our opinion that, subject to compliance by the Company, the Issuer and the Other
Issuer with certain covenants made to satisfy pertinent requirements of the Internal Revenue
Code of 1986, as amended (the "Code"), 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
B-3-2
Law Offices of
CHAPMAN AND CUTLER
substantial user ofthe Project or the Plant or any person considered to be related to such person
(within the meaning of Sectionl47(a) of the Code); however, such interest on the Bonds is
included as an item of tax preference in computing the federal alternative minimum tax for
individuals and corporations under the Code. Failure to comply with certain of such covenants
could cause the interest on the Bonds to be included in gross income for federal income tax
purposes retroactively to the date of issuance of the Bonds. Ownership of the Bonds may result
in other federal tax consequences to certain taxpayers, and we express no opinion regarding any
such collateral consequences arising with respect to the Bonds. In rendering this opinion, we
have relied upon certifications of the Company with respect to certain material facts solely
within the Company's knowledge relating to the Project, the Plant and the application of the
proceeds ofthe Bonds.
In our opinion, under present Wyoming law, the State of Wyoming imposes no income
taxes that would be applicable to interest on the Bonds. No opinion is expressed with respect to
any other taxes imposed by the State of Wyoming or any political subdivision thereof.
Ownership of the Bonds may result in other Wyoming tax consequences to certain taxpayers; we
express no opinion regarding any such collateral consequences arising with respect to the Bonds.
We 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 Plant.
CHepueN AND CUTLER
B-3-3
Theodore S. Chapman
1877-1943
Henry E. Cutler
I 879-1959
APPENDIX B-4
Law Ofiices of
CHAPMAN AND CUTLER
50 South Main Street, Salt Lake City, Utah 84144-0402
Telephone (80 I ) 533-0066
Facsimile [phone]
Chicago
I I I West Monroe Street
Chicago, Illinois 60603
(3 r2) 84s-3000
November 17,1995
Re: $22,000,000 Lincoln County, Wyoming,
Environmental Improvement Revenue Bonds
(PacifiCorp Project) Series 1995
We hereby certify that we have examined certified copy of the proceedings of record of
the Board of County Commissioners of Lincoln County, Wyoming (the "Issue,,'), a political
subdivision of the State of Wyoming, preliminary to the issuance by the Issuer of its
Environmental Improvement Revenue Bonds (PacifiCorp Project) Series 1995, in the aggregate
principal amount of $22,000,000 (the "Bonds"). The Bonds are being issued pursuant to the
provisions of Sections l5-1-701 to 15-l-710, inclusive, Wyoming Statutes (1977), as amended
and supplemented (the "Act"), for the purpose of financing a portion of the cost of acquiring and
improving certain solid waste disposal facilities (the "Project") at the Naughton Plant (the
"Plant") in Lincoln County, Wyoming, which is owned and operated by PacifiCorp, an Oregon
corporation (the "Company"). The Bonds are being issued simultaneously with another issue of
environmental improvement revenue bonds being issued by Converse County, Wyoming (the
"Other Issuer"), for the benefit of the Company.
The Bonds mature on November 1,2025, bear interest from time to time computed as set
forth in each of the Bonds and are subject to purchase and redemption prior to maturity at the
times, in the manner and upon the terms set forth in each of the Bonds. The Bonds are issuable
in authorized denominations as provided in the hereinafter-defined Indenture as fully-registered
Bonds without coupons.
From such examination of the proceedings of the Board of County Commissioners of the
Issuer referred to above and from an examination of the Act, we are of the opinion that such
proceedings show lawful authority for such issue of Bonds under the laws of the State of
Wyoming now in force.
Pursuant to a Loan Agreement, dated as of November l, 1995 (the "Loan Agreement"),
between the Company and the Issuer, the Issuer has agreed to loan the proceeds from the sale of
Law Offices of
CHAPMAN AND CUTLER
the Bonds to the Company for the purpose of financing a portion of the cost of the Project, and
the Company has agreed to pay amounts at least sufficient to pay the principal of, premium, if
any, and interest on the Bonds when due, whether at stated maturity, call for redemption or
acceleration. The Loan Agreement (an executed counterpart of which has been examined by us)
has, in our opinion, been duly authorized, executed and delivered by the Issuer, and, assuming
the due authorization, execution and delivery by the Company, is a valid and binding obligation
of the Issuer, enforceable in accordance with its terms, subject to the qualification that the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization and other similar
laws relating to the enforcement of creditors' rights generally or usual equity principles in the
event equitable remedies should be sought.
We have also examined an executed counterpart of the Trust lndenture, dated as of
November l, 1995 (the "Indenture"), 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 Agenf'),
for the determination of the interest rate to be borne by the Bonds from time to time, which
interest rate may be a Daily Interest Rate, a Weekly Interest Rate, a Flexible Interest Rate or a
Term Interest Rate (each as defined in the Indenture), and for the conversion of the interest rate
determination method under certain conditions. The Indenture provides that the Bonds will
initially bear interest at a Daily Interest Rate until conversion to a different interest rate
determination method. Under the Indenture, the revenues derived by the Issuer under the Loan
Agreement, together with certain of the rights of the Issuer thereunder, are pledged and assigned
to the Trustee as security for the Bonds. From such examination, we are of the opinion that the
proceedings of the Board of County Commissioners of the Issuer referred to above show lawful
authority for the execution and delivery of the Indenture, that the Indenture is a valid and binding
obligation of the Issuer, enforceable in accordance with its terms, subject to the qualification that
the enforcement thereof may be limited by bankruptcy, insolvency, reorganization and other
similar laws relating to the enforcement of creditors' rights generally or usual equity principles in
the event equitable remedies should be sought, that the Bonds have been validly issued under the
Indenture, and that all requirements under the Indenture precedent to delivery of the Bonds have
been satisfied.
We further certify that we have examined the form of bond prescribed in the Indenture
and find the same in due form of law and in our opinion the Bonds, to the amount named, are
valid and legally binding upon the Issuer according to the import thereof and, as provided in the
Indenture and the Bonds, are payable by the Issuer solely out of payments to be made by the
Company under the Loan Agreement and all moneys and investments held by the Trustee under
the Indenture or otherwise available to the Trustee for the payment thereof.
It is our opinion that, subject to compliance by the Company, the Issuer and the Other
Issuer with certain covenants made to satisfy pertinent requirements of the Internal Revenue
Code of 1986, as amended (the "Code"), 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
B-4-2
Law Offices of
CHAPMAN AND CUTLER
substantial user ofthe Project or the Plant or any person considered to be related to such person
(within the meaning of Section 147(a) of the Code); however, such interest on the Bonds is
included as an item of tax preference in computing the federal alternative minimum tax for
individuals and corporations under the Code. Failure to comply with certain of such covenants
could cause the interest on the Bonds to be included in gross income for federal income tax
purposes retroactively to the date of issuance of the Bonds. Ownership of the Bonds may result
in other federal tax consequences to certain taxpayers, and we express no opinion regarding any
such collateral consequences arising with respect to the Bonds. In rendering this opinion, we
have relied upon certifications of the Company with respect to certain material facts solely
within the Company's knowledge relating to the Project, the Plant and the application of the
proceeds ofthe Bonds.
In our opinion, under present Wyoming law, the State of Wyoming imposes no income
taxes that would be applicable to interest on the Bonds. No opinion is expressed with respect to
any other taxes imposed by the State of Wyoming or any political subdivision thereof.
Ownership of the Bonds may result in other Wyoming tax consequences to certain taxpayers; we
express no opinion regarding any such collateral consequences arising with respect to the Bonds.
We 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 Plant.
CHepuaN AND CUTLER
B-4-3
APPENDIX C-l
PROPOSED FORM OF OPINION OF BOND COUNSEL FOR CHANGE IN
RATE DETERMINATION METHOD OF THE SERIES 1984 BONDS
[Letterhead of Chapman and Cutler LLP]
[To be Dated the Closing Date]
The Bank of New York Mellon Trust Company,
N.A., as trustee, placement agent and tender agent
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attn: Richard C. Tarnas
PacifiCorp
825 N.E. Multnomah Street,
Suite 1900
Portland, Oregon 97232-41 | 6
Attn: Treasurer
Sweetwater County, Wyoming
County Courthouse
80 West Flaming Gorge Way
Green River, Wyoming 82935
Attn: Chairrnan, Board of County
Commissioners
Barclays Capital Inc.
745 Seventh Avenue
New York, New York 10019
Affn: Municipal Short-Term Desk
Conversion to Weekly Interest Rate Period
$ 1 5,000,000 Sweetwater County, Wyoming
Pollution Control Revenue Bonds
(PacifiCorp Project) Series 1984 (the "Bonds")
Ladies and Gentlemen:
This opinion is being furnished at the request of PacifiCorp (the "Comparq/") to (a) The
Bank of New York Mellon Trust Company, N.A. (as successor to Bank One Trust Company,
NA), as trustee, placement agent and tender agent (the "Trustee "), under the Indenture of Trust,
dated as of Decemberl, 1984, as amended and restated as of June 1,2003 (the "Indenture"),
between Sweetwater County, Wyoming (the "Issuer"), and the Trustee, pertaining to the Bonds;
(b) the Issuer; (c) Barclays Capital Inc., as remarketing agent (the "Remarketing Agent") under
that certain Remarketing Agreement, dated as of May 22,2013 (the "Remarketing Agreement"),
between the Remarketing Agent and PacifiCorp (the "Compony") and (d) the Company in order
to satisff certain requirements of Section 5(a)(v)(C)(2) of the Remarketing Agreement. Pursuant
to Section 2.02(c)(ii) of the Indenture, the Company has determined to convert the interest rate
on the Bonds from a Term Interest Rate Period to a Weekly Interest Rate Period effective on the
date hereof (the "Conversion Date"). The terms used herein denoted by initial capitals and not
otherwise defined shall have the meanings specified in the Indenture.
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
Re:
expressed herein, we have relied upon the provisions of the Indenture and related documents, and
upon representations made to us without undertaking to verify the same by independent
investigation.
Based upon the foregoing, as of the date hereof, we are of the opinion that the conversion
of the interest rate on the Bonds:
(i) is authorized or permitted by the Indenture and the Act; and
(ii) will not, in and of itself, adversely affect the Tax-Exempt status of interest
on the Bonds.
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 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 (a) the
adjustment of the interest rate described in our opinion dated May 2,2003, (b) the execution and
delivery of the First Supplemental Trust Indenture, described in our opinion dated March 3,
2003, (c) the execution and delivery of the Second Supplemental Indenture and the First
Supplemental Loan Agreement, described in our opinion dated June 2, 2003 and (d) the
adjustment of the interest rate described herein and in our opinion dated May 8, 2013.
Accordingly: we do not express any opinion with respect to the Bonds, except as described
above.
In rendering this opinion, we have relied upon certifications of the Issuer and the
Company with respect to certain material facts solely within the Issuer's and the Company's
knowledge. 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 thatmay hereafter occur.
We express no opinion herein as to the adequacy, accuracy or completeness of any
information of furnished to any person in connection with any offer or sale of the Bonds.
Respectfully submitted,
c-t-2
APPENDIX C-2
PROPOSED FORM OF OPINION OF BOND COUNSEL FOR CHANGE IN
RATE DETERMINATION METHOD OF THE SERIES 1986 BONDS
[Letterhead of Chapman and Cutler LLP]
[To be Dated the Closing Date]
The Bank of New York Mellon Trust Company,
N.A., as trustee, placement agent and tender agent
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attn: Richard C. Tarnas
PacifiCorp
825 N.E. Multnomah Street,
Suite 1900
Portland, Oregon 97 232-41 16
Attn: Treasurer
City of Forsyth, Rosebud County, Montana
City Hall
247 North Ninth Street
Forsyth, Montana 59327
Attn: Mayor
Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
Affn: Municipal Short-Term Products
Re: Conversion to Weekly lnterest Rate Period
$8,500,000 City of Forsyth, Rosebud County, Montana
Flexible Rate Demand Pollution Control Revenue Bonds
(PacifiCorp Colstrip Project) Series 1986 (the "Bonds")
Ladies and Gentlemen:
This opinion is being furnished at the request of PacifiCorp (the "Comporq)") to (a) The
Bank of New York Mellon Trust Company, N.A. (as successor to Bank One Trust Company,
NA), as trustee, placement agent and tender agent (the "Trustee "), under the Trust Indenture,
dated as of December l, 1986, as amended and restated as of June 1,2003 (he "Indenture"),
between the City of Forsyth, Rosebud County, Montana (the "Issuer"), and the Trustee,
pertaining to the Bonds; (b) the Issuer; (c) Morgan Stanley & Co. LLC, as remarketing agent (the
"Remarketing Agent") under that certain Remarketing Agreement, dated as of May 22,2013 (the
"Remarketing Agreement"), between the Remarketing Agent and PacifiCorp (the "Company")
and (d) the Company in order to satisfy certain requirements of Section 5(a)(v)(C)(2) of the
Remarketing Agreement. Pursuant to Section 2.02(c)(ii) of the Indenture, the Company has
determined to convert the interest rate on the Bonds from a Term Interest Rate Period to a
Weekly Interest Rate Period effective on the date hereof (the "Conversion Date"). The terms
used herein denoted by initial capitals and not otherwise defined shall have the meanings
specified in the Indenture.
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 lndenture and related documents, and
upon representations made to us without undertaking to verify the same by independent
investigation.
Based upon the foregoing, as of the date hereof, we are of the opinion that the conversion
of the interest rate on the Bonds:
(i)is authorized or permitted by the Indenture and the Act; and
(ii) will not, in and of itself, adversely affect the Tax-Exempt status of interest
on the Bonds.
At the time of the issuance of the Bonds, we rendered our approving opinion relating to,
among otherthings, 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 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 (a) the
adjustment of the interest rate described in our opinions dated September 3, 2002, and May 2,
2003, (b)the execution and delivery of the First Supplemental Trust Indenture, described in our
opinion dated March 3, 2003, (c) the execution and delivery of the Second Supplemental
Indenture and the First Supplemental Loan Agreement, described in our opinion dated June 2,
2003 and (d) the adjustment of the interest rate described herein and in our opinion dated May 8,
2013. Accordingly, we do not express any opinion with respect to the Bonds, except as
described above.
In rendering this opinion, we have relied upon certifications of the Issuer and the
Company with respect to certain material facts solely within the Issuer's and the Company's
knowledge. Our opinion represents our legaljudgment 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.
We express no opinion herein as to the adequacy, accuracy or completeness of any
information of furnished to any person in connection with any offer or sale of the Bonds.
Respectfully submitted,
c-2-2
APPENDIX C.3
PROPOSED FORM OF OPINION OF BOND COUNSEL FOR CHANGE IN
RATE DETERMINATION METHOD OF THE SERIES 1995 CONVERSE COUNTY
BONDS
[Letterhead of Chapman and Cutler LLP]
[To be Dated the Closing Date]
The Bank of New York Mellon Trust Company,
N.A., as trustee, placement agent and tender agent
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attn: Richard C. Tarnas
PacifiCorp
825 N.E. Multnomah Street,
Suite 1900
Portland, Oregon 97232-41 16
Attn: Treasurer
Converse County, Wyoming
107 North 5th Street
Douglas, Wyoming 82633
Attn: Chairrnan, Board of County
Commissioners
Barclays Capital Inc.
745 Seventh Avenue
New York, New York 10019
Attn: Municipal Short-Term Desk
Conversion to Weekly Interest Rate Period
$5,300,000 Converse County, Wyoming
Environmental Improvement Revenue Bonds
(PacifiCorp Project) Series 1995 (the "Bonds")
Ladies and Gentlemen:
This opinion is being furnished at the request of PacifiCorp (the "Company") to (a) The
Bank of New York Mellon Trust Company, N.A. (as successor to Bank One Trust Company,
NA), as trustee, placement agent and tender agent (the "Trustee "), under the Trust Indenture,
dated as of November l, 1995, as amended and restated as of June 1,2003 (the "Indenture"),
between Converse County, Wyoming (the "Issuer"), and the Trustee, pertaining to the Bonds;
(b) the Issuer; (c) Barclays Capital Inc., as remarketing agent (the "Remarketing Agent") under
that certain Remarketing Agreement, dated as of May 22,2013 (the "Remorketing Agreement"),
between the Remarketing Agent and PacifiCorp (the "Company") and (d) the Company in order
to satisfu certain requirements of Section 5(a)(v)(CX2) of the Remarketing Agreement. Pursuant
to Section 2.02(cXii) of the lndenture, the Company has determined to convert the interest rate
on the Bonds from a Term lnterest Rate Period to a Weekly Interest Rate Period effective on the
date hereof (the "Cowersion Date"). The terms used herein denoted by initial capitals and not
otherwise defined shall have the meanings specified in the Indenture.
Re:
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 Indenture and related documents, and
upon representations made to us without undertaking to verify the same by independent
investigation.
Based upon the foregoing, as of the date hereof, we are of the opinion that the conversion
of the interest rate on the Bonds:
is authorized or permitted by the Indenture and the Act; and
(ii) will not, in and of itself, adversely affect the Tax-Exempt status of interest
on the Bonds.
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 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 (a) the
adjustment of the interest rate described in our opinion dated May 2,2003, (b) the execution and
delivery of the First Supplemental Trust Indenture, described in our opinion dated March 3,
2003, (c) the execution and delivery of the Second Supplemental Indenture and the First
Supplemental Loan Agreement, described in our opinion dated June 2, 2003 and (d) the
adjustment of the interest rate described herein and in our opinion dated May 8, 2013.
Accordingly, we do not express any opinion with respect to the Bonds, except as described
above.
In rendering this opinion, we have relied upon certifications of the Issuer and the
Company with respect to certain material facts solely within the Issuer's and the Company's
knowledge. Our opinion represents our legaljudgment 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.
We express no opinion herein as to the adequacy, accuracy or completeness of any
information of furnished to any person in connection with any offer or sale of the Bonds.
Respectfully submitted,
c-3-2
APPENDIX C-4
PROPOSED FORM OF OPINION OF BOND COUNSEL FOR CHANGE IN
RATE DETERMINATION METHOD OF THE SERIES 1995 LINCOLN COUNTY
BONDS
[Letterhead of Chapman and Cutler LLP]
[To be Dated the Closing Date]
The Bank of New York Mellon Trust Company,
N.A., as trustee, placement agent and tender agent
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attn: Richard C. Tarnas
PacifiCorp
825 N.E. Multnomah Street,
Suite 1900
Portland, Oregon 97 232-41 16
Attn: Treasurer
Lincoln County, Wyoming
Lincoln County Courthouse
925 Sage Avenue
Kemmerer, Wyoming 83101
Attn: Chairrnan, Board of County
Commissioners
Morgan Stanley &Co.LLC
1585 Broadway
New York, New York 10036
Attn: Municipal Short-Term Products
Conversion to Weekly Interest Rate Period
522,000,000 Lincoln County, Wyoming
Environmental Improvement Revenue Bonds
(PacifiCorp Project) Series 1995 (the "Bonds")
Ladies and Gentlemen:
This opinion is being furnished at the request of PacifiCorp (the "Company") to (a) The
Bank of New York Mellon Trust Company, N.A. (as successor to Bank One Trust Company,
NA), as trustee, placement agent and tender agent (the "Trustee "), under the Trust Indenture,
dated as of November l, 1995, as amended and restated as of June 1,2003 (the "Indenture"),
between Lincoln County, Wyoming (the "Issuer"), and the Trustee, pertaining to the Bonds;
(b) the Issuer; (c) Morgan Stanley & Co. LLC, as remarketing agent (the "Remorketing Agent")
under that certain Remarketing Agreement, dated as of May22,2013 (the "Remarketing
Agreement "), between the Remarketing Agent and PacifiCorp (the "Company") and (d) the
Company in order to satisfy certain requirements of Section 5(a)(vXC)(2) of the Remarketing
Agreement. Pursuant to Section 2.02(c)(ii) of the Indenture, the Company has determined to
convert the interest rate on the Bonds from a Term Interest Rate Period to a Weekly Interest Rate
Period effective on the date hereof (the "Conversion Date "). The terms used herein denoted by
initial capitals and not otherwise defined shall have the meanings specified in the Indenture.
Re:
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 Indenture and related documents, and
upon representations made to us without undertaking to verify the same by independent
investigation.
Based upon the foregoing, as of the date hereof we are of the opinion that the conversion
of the interest rate on the Bonds:
(i) is authorized or permitted by the Indenture and the Act; and
(ii) will not, in and of itself, adversely affect the Tax-Exempt status of interest
on the Bonds.
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 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 (a) the
adjustment of the interest rate described in our opinion dated May 2,2003, (b) the execution and
delivery of the First Supplemental Trust Indenture, described in our opinion dated March 3,
2003, (c) the execution and delivery of the Second Supplemental Indenture and the First
Supplemental Loan Agreement, described in our opinion dated June 2, 2003 and (d) the
adjustment of the interest rate described herein and in our opinion dated May 8, 2013.
Accordingly, w€ do not express any opinion with respect to the Bonds, except as described
above.
In rendering this opinion, we have relied upon certifications of the Issuer and the
Company with respect to certain material facts solely within the Issuer's and the Company's
knowledge. 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.
We express no opinion herein as to the adequacy, accuracy or completeness of any
information of furnished to any person in connection with any offer or sale of the Bonds.
Respectfully submitted,
c-4-2
APPENDIX D
FORM OF CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (this "Agreement") is executed and delivered by
PacifiCorp (the "Company") in consideration of the reoffering of the four Issues of Bonds
identified by Schedule I hereto in conjunction with the remarketing thereof by Barclays Capital
Inc. and Morgan Stanley & Co. LLC, as Remarketing Agents.
Section 1. The Company does hereby covenant and agree and enter into a written
undertaking for the benefit of the holders and beneficial Owners of the Bonds as required by
Section (bxs)(i) of Securities and Exchange Commission Rule l5c2-12 under the Securities
Exchange Act of 1934,as amended (17 C.F.R. $240.15c2-12) (he "Rule"). Capitalized terms
used in this Agreement and not otherwise defined in the respective Indenture of Trust and Trust
Indentures (collectively, the "Indenture") identified by such Schedule I between the respective
Issuers identified by such Schedule I, in its capacity as Trustee for each Issue of Bonds, The
Bank of New York Mellon Trust Company, N.A. (in each case, as successor to the original
Trustee) (collectively, the ooTrustee") shall have the meanings assigned such terms in Section 4
hereof. This Agreement shall be construed in accordance with the written interpretative
guidance and no-action letters published from time to time by the Securities and Exchange
Commission and its staff with respect to the Rule.
Section 2. The Company undertakes to provide the following information in
accordance with this Agreement as required by the Rule:
(a) Annual Financial lnformation;
(b) Audited Financial Statements, if any; and
(c) Material Event Notices.
Section 3.
(a) The Company shall, while any Bonds are Outstanding, provide the Annual
Financial Information on or before the date which is 180 days after the end of each fiscal
year of the Company (the "Report Date") to the Municipal Securities Rulemaking Board
(the "MSRB") in an electronic format accompanied by identifying information as
prescribed by the MSRB. The Company shall include with each submission of Annual
Financial Information a written statement to the effect that the Annual Financial
Information is the Annual Financial Information required by this Agreement and that it
complies with the applicable requirements of this Agreement and that it has been
provided to the MSRB. If the Company changes its fiscal year, it shall provide written
notice of the change of fiscal year to the MSRB. It shall be sufficient if the Company
provides to the MSRB any or all of the Annual Financial Information by specific
reference to documents previously provided to the MSRB or filed with the Securities and
Exchange Commission and, if such a document is a final official statement within the
meaning of the Rule, available from the MSRB.
(b) If not provided as part of the Annual Financial Information, the Company
shall provide the Audited Financial Statements when and if available while any Bonds
are Outstanding to the MSRB.
(c) If a Material Event occurs while any Bonds are Outstanding, the Company
shall provide a Material Event Notice in a timely manner, not in excess of l0 business
days after the occurrence of the event, to the MSRB. Each Material Event Notice shall be
so captioned and shall prominently state the date, title and CUSIP numbers of the Bonds.
(d) The Company shall provide in a timely manner to the MSRB notice of any
failure by the Company while any Bonds are Outstanding to provide to the MSRB
Annual Financial Information on or before the Report Date.
(e) Any filing or report under this Agreement may be made solely by
transmitting such filing or report to the MSRB in an electronic format accompanied by
identiffing information as prescribed by the MSRB.
Section 4. The following are the definitions of the capitalized terms used in this
Agreement not otherwise defined in this Agreement or the Indenture:
(a) "Annual Financial Infurmation" means the financial information or
operating data with respect to the Company, provided at least annually, of the type
incorporated by reference under APPENDIXA-"PACIFICORP-AVAILABLE
INFORMATION" of the Reoffering Circular dated May 22,2013 with respect to the
Bonds. The consolidated financial statements included in the Annual Financial
Information shall be prepared in accordance with generally accepted accounting
principles ("GAAP") as prescribed by the Financial Accounting Standards Board
("FASB"). Such consolidated financial statements may, but are not required to be,
Audited Financial Statements.
(b) 'oAudited Financial Statements" means the Company's annual
consolidated financial statements, prepared in accordance with GAAP as prescribed by
FASB, which consolidated financial statements shall have been audited by an
independent auditor or firm of independent auditors as shall be then retained by the
Company.
(c) "Moterial Event" means any of the following events with respect to the
Bonds:
l. Principal and interest payment delinquencies;
2. Nonpayment-related defaults, if material;
3. Unscheduled draws on debt service reserves reflecting financial
difficulties;
D-2
4. Unscheduled draws on credit enhancements reflecting financial
difficulties;
5. Substitution of credit or liquidity providers, or their failure to
perform;
6. Adverse tax opinions, the issuance by the Intemal Revenue Service
of proposed or final determinations of taxability, Notices of Proposed Issue (IRS
Form 5701-TEB) or other material notices or determinations with respect to the tax
status of the Bonds, or other material events affecting the tax status of the Bonds;
7. Modifications to rights of holders of the Bonds, if material;
8. Bond calls, if material, and tender offers;
9. Defeasances;
10. Release, substitution or sale of property securing repayment of the
Bonds, if material;
11. Rating changes;
12. Bankruptcy, insolvency, receivership or similar event of the
Company;
13. The consummation of a merger, consolidation or acquisition
involving the Company or the sale of all or substantially all of the assets of the
Company, other than in the ordinary course of business, the entry into a definitive
agreement to undertake such an action or the termination of a definitive agreement
relating to any such actions, other than pursuant to its terms, if material, and
14. Appointment of a successor or additional trustee or the change of
name of a trustee, if material.
"Material Event Notice" means electronic notice of a Material Event.
(e) "MSRB" means the Municipal Securities Rulemaking Board, and any
successor thereto. On July 1,2009, the MSRB became the sole repository to which the
Company must electronically submit Annual Financial Information, Audited Financial
Statements, if any, and Material Event Notices pursuant to this Agreement. Reference is
made to Securities and Exchange Commission Release No. 34 59062, December 8, 2008
(the "Release") relating to the MSRB's Electronic Municipal Market Access ("EMMA")
system for municipal securities disclosure, which became effective on July l, 2009. To
the extent applicable to this Agreement, the Company shall comply with the Release and
with EMMA, as amended or supplemented from time to time.
(d)
Section 5.
(a) The continuing obligation hereunder of the Company to provide Annual
Financial Information, Audited Financial Statements, if any, and Material Event Notices
shall terminate immediately once the Bonds no longer are Outstanding. This
Agreement, or any provision hereof, shall be null and void if the Company obtains an
opinion of nationally recognized bond counsel to the effect that those portions of the
Rule which require this Agreement, or any such provision, are invalid, have been
repealed retroactively or otherwise do not apply to the Bonds, provided that the
Company shall have provided notice of such delivery and the cancellation of this
Agreement to the MSRB.
(b) This Agreement may be amended, without the consent of the
Bondholders, but only upon the Company obtaining and providing to the Trustee an
opinion of nationally recognized bond counsel to the effect that such amendment, and
giving effect thereto, will not adversely affect the compliance of this Agreement and by
the Company with the Rule, provided that the Company shall have provided notice of
such delivery and of the amendment to the MSRB. Any such amendment shall satisfy,
unless otherwise permitted by the Rule, the following conditions:
(i) The amendment may only be made in connection with a change in
circumstances that arises from a change in legal requirements, change in law or
change in the identity, nature or status of the Company or type of business
conducted;
(ii) This Agreement, as amended, would have complied with the
requirements of the Rule at the time of the primary offering, after taking into
account any amendments or interpretations of the Rule, as well as any change in
circumstances, and
(iii) The amendment does not materially impair the interests of
Bondholders, as determined either by parties unaffiliated with the Company (such
as nationally recognized bond counsel) or by approving vote of Bondholders
pursuant to the terms of the Indenture at the time of the amendment.
The initial Annual Financial Information after the amendment shall explain, in
narrative form, the reasons for the amendment and the effect of the change, if any, in the
type of operating data or financial information being provided.
(c) The Company shall not transfer its obligations under the Agreement
unless the transferee agrees to assume all obligations of the Company hereunder or to
execute a continuing disclosure undertaking under the Rule.
Section 6. Any failure by the Company to perform in accordance with this Agreement
shall not constitute an Event of Default with respect to the Bonds. If the Company fails to
comply herewith, any Bondholder or beneficial owner may take such actions as may be
necessary and appropriate, including seeking specific performance by court order, to cause the
Company to comply with its obligations hereunder.
D-4
Dated: June 3,2013.
PACIFICORP
By
Name
Title
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REMARI(ETING AGREEMENT
Dated May 22,2013
$15,000,000
Sweetwater County, Wyoming
Pollution Control Revenue Bonds
(PacifiCorp Project)
Series 1984
$5,300,000
Converse County, Wyoming
Environmental Improvement Revenue Bonds
(PacifiCorp Project)
Series 1995
PacifiCorp
Suite 1900
825 NE Multnomah
Portland, OR 97232
To the Addressee:
This is to confirm the agreement between Barclays Capital Inc. and PacifiCorp, an
Oregon corporation (the "Comp&ny"), for Barclays Capital Inc. to act as exclusive remarketing
agent (the "Remarketing Agent") in connection with the offering and sale of the Bonds from
time to time in the secondary market. The Bonds consist of $15,000,000 in aggregate principal
amount of Sweetwater County, Wyoming Pollution Control Revenue Bonds (PacifiCorp
Project), Series 1984 (the "Sweetwater Bonds") and $5,300,000 in aggregate principal amount of
Converse County, Wyoming Environmental Improvement Revenue Bonds (PacifiCorp Project),
Series 1995 (the "Converse Bonds" and, collectively with the Sweetwater Bonds, the "Bonds").
Converse County, Wyoming ("Converse County") and Sweetwater County, Wyoming
("Sweetwater County)" are collectively referred to herein as the o'Issuer."
The Sweetwater Bonds will be remarketed under and are secured by an Indenture of
Trust, dated as of December l, 1984, as amended and restated as of June l, 2003 (the
"Sweetwater Indenture"), between Sweetwater County and The Bank of New York Mellon Trust
Company, N.A., as successor trustee (in its capacity as trustee under the Sweetwater Indenture,
the "Sweetwater Trustee"). The Converse Bonds will be remarketed under and are secured by a
Trust Indenture, dated as of November l, 1995, as amended and restated as of June 1,2003 (the
"Converse Indenture," and collectively with the Sweetwater Indenture, the "Bond Indenture"),
between Converse County and The Bank of New York Mellon Trust Company, N.A., as
successor trustee (in its capacity as trustee under the Converse Indenture, the "Converse Trustee"
and, collectively with the Sweetwater Trustee, the "Bond Trustee"). Sweetwater County loaned
the proceeds of the Sweetwater Bonds to the Company under a Loan Agreement, dated as of
December l, 1984, as amended and restated as of June 1, 2003 (the "Sweetwater Loan
Agreement"), between Sweetwater County and the Company in order to finance certain
qualifying air and water pollution control facilities (the "Sweetwater Bonds Project"). Converse
County loaned the proceeds of the Converse Bonds to the Company under a Loan Agreement
dated as of November I 1995, as amended and restated as of June 1,2003 (the "Converse Loan
Agreement" and collectively with the Sweetwater Loan Agreement, the "Loan Agreement"),
between Converse County and the Company in order to finance certain qualiffing air and water
pollution control facilities (the "Converse Bonds Project" and, collectively with the Sweetwater
4812-9073-8707.6
Barclays 2013 RernAgmt
Bonds Project, the "Projects"). To evidence its obligation to repay such loans, the Company
executed and delivered to the Sweetwater Trustee its First Mortgage and Collateral Bonds, First
2003 Series (the "Sweetwater First Mortgage Bonds") in a principal amount equal to the
principal amount of the Sweetwater Bonds, and executed and delivered to the Converse Trustee
its First Mortgage and Collateral Bonds, Fifth 2003 Series (the "Converse First Mortgage Bonds"
and, collectively with the Sweetwater First Mortgage Bonds, the "First Mortgage Bonds") in a
principal amount equal to the principal amount of the Converse Bonds. The First Mortgage
Bonds were issued under the Mortgage and Deed of Trust, dated as of January 9,1989, between
the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (in
such capacity, the "Mortgage Trustee"), as supplemented and amended from time to time,
including as supplemented by the Fifteenth Supplemental Indenture, dated as of June 1,2003
(the "Fifteenth Supplemental Indenture"), all collectively referred to as the "Company
Mortgage."
The Bonds are being remarketed hereunder following the mandatory purchase of the
Bonds from the Holders thereof in connection with the adjustment of the interest rate period for
the Bonds, as described herein, on June 3,2013 (hereinafter referred to as the "Closing Date").
Each issue of the Bonds is entirely separate from the other issue of the Bonds, and the
dates and responsibilities of the Remarketing Agent under this Remarketing Agreement, unless
otherwise stated, apply separately to each individual issue of the Bonds. This Remarketing
Agreement does not relate to any issue of bonds described by the Reoffering Circular other than
the Bonds.
The Bonds are more fully described in the Reoffering Circular dated May 22, 2013
(which, together with the appendices attached thereto, is referred to herein as the "Reoffering
Circular"), as such may be amended or supplemented.
All capitalized terms used but not defined herein shall have the meanings ascribed to
them in the Reoffering Circular.
1. Appointment of Remarketing Agent; Responsibilities of Remarketing Agent.
(a) Subject to the terms and conditions herein contained, the Company hereby
appoints the Remarketing Agent as exclusive remarketing agent for the Bonds pursuant to
the Bond Indenture, and the Remarketing Agent hereby accepts such appointment, in
connection with (i) the remarketing of the Bonds in connection with the adjustment of the
interest rate period for the Bonds on the Closing Date (the "Initial Remarketing") and
(ii) the offering and sale of the Bonds from time to time in the secondary market
subsequent to the Closing Date. The Company agrees with the Remarketing Agent that
unless this Remarketing Agreement has been previously terminated pursuant to the terms
hereof, the Remarketing Agent shall act as exclusive remarketing agent with respect to
the Bonds on the terms and conditions herein contained at all times, including any
remarketing of the Bonds in connection with or in anticipation of the establishment of a
Term Interest Rate Period extending to the final maturity of the Bonds.
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(b) The Remarketing Agent agrees to determine the rate of interest for the
Bonds during each Rate Period as provided in Section 2.02 of the Bond Indenture. The
Remarketing Agent agrees to fumish to the Bond Trustee the information with respect to
each rate of interest required by Section 2.02 of the Bond Indenture.
(c) Upon the terms and conditions and in reliance on the representations and
warranties and covenants set forth herein, the Remarketing Agent shall exercise best
efforts to remarket the Bonds in the Initial Remarketing at a price equal to par plus
accrued interest, if any, subject in all respects to the terms and conditions of the Bond
Indenture and Section 5 hereof. By noon, New York, New York time, on the Closing
Date, the Remarketing Agent shall cause the remarketing proceeds of the Initial
Remarketing to be delivered to the Bond Trustee.
(d) After the Initial Remarketing, in its capacity as Remarketing Agent, upon
notice from (i) a Bondholder or the Bond Trustee that it has received notice from a
Bondholder pursuant to Section 3.01(a), (b) or (c) of the Bond Indenture or (ii) the Bond
Trustee of a mandatory tender for purchase pursuant to Section 3.02(a)(i), (ii) or (iii) of
the Bond lndenture, in each case given pursuant to and in accordance with the Bond
Indenture, the Remarketing Agent shall offer for sale and use its best efforts to remarket
any Bonds that are the subject of any such notice at a price of 100% of the principal
amount thereof plus accrued interest, if any, subject in all respects to the terms and
conditions of the Bond Indenture.
ln accordance with the provisions of Section 3.06 of the Bond Indenture, the
Remarketing Agent shall give the Bond Trustee notice in writing not later than
11:30a.m., NewYork, NewYork time, on any day on which Bonds are delivered or
deemed delivered for purchase under Section 3.01 or 3.02 of the Bond Indenture, of the
aggregate principal amount of Bonds remarketed on such date but for which the purchase
price has not been paid (which Bonds for purposes of the Bond Indenture shall be
considered to not be remarketed). By 1 l:45 a.m., New York, New York time, on any day
on which Bonds are delivered or deemed delivered for purchase under Section 3.01 or
3.02 of the Bond Indenture, the Remarketing Agent shall (i) cause the remarketing
proceeds of the Bonds to be delivered to the Bond Trustee, and (ii) give notice by
facsimile transmission, telephone, telecopy, e-mail or other similar electronic means,
promptly confirmed by a written notice, to the Company and the Bond Trustee on each
date on which Bonds shall have been purchased pursuant to the Bond Indenture,
specifying the principal amount of Bonds sold by the Remarketing Agent and the name,
address and taxpayer identification number of each such purchaser, the principal amount
of Bonds to be purchased and the denominations in which such Bonds are to be delivered.
All transfers of Bonds and information related thereto shall comply with all Securities
Depository requirements as long as Bonds are in book-entry form.
(e) The Company and the Remarketing Agent agree that the responsibilities of
the Remarketing Agent hereunder will include: (i) the Initial Remarketing of the Bonds
pursuant to Section l(c) hereof; (ii)the soliciting of purchases of Bonds from investors
that customarily purchase tax-exempt securities in large denominations, provided,
however, that with respect to Bonds being purchased in connection with the
4812-9073-8707 .6
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establishment of a Term Interest Rate (as defined in the Bond Indenture) the Remarketing
Agent need not be restricted to investors able to purchase tax-exempt securities in large
denominations; (iii) effecting and processing such purchases; (iv) billing and receiving
payment for Bonds purchased; (v) causing the proceeds from the secondary sale ofthe
Bonds to be transferred to the Bond Trustee pursuant to the Bond Indenture; and
(vi) performing such other related functions as may be reasonably requested by the
Company and agreed to by the Remarketing Agent. The Remarketing Agent will keep
records of trades and make trade confirmations in accordance with prudent industry
practices.
(0 The Company acknowledges and agrees that: (i) the transaction
contemplated by this Remarketing Agreement and the Reoffering Circular (the
"Transaction") is an arm's length, commercial transaction between the Company and the
Remarketing Agent in which the Remarketing Agent is acting solely as a principal and is
not acting as a "municipal advisor," "financial advisor" or "fiduciary" to the Company or
the Issuer within the meaning of the Dodd-Frank Wall Street Reform and Consumer
Protection Act and Section 158 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); (ii) the Remarketing Agent has not assumed any advisory or fiduciary
responsibility to the Company or the Issuer with respect to the Transaction and the
discussions, undertakings and procedures leading thereto (inespective of whether any
affiliated entities have provided other services or are curently providing other services to
the Company on other matters; (iii) the only obligations the Remarketing Agent has to the
Company or the Issuer with respect to the Transaction expressly are set forth in this
Remarketing Agreement; and (iv) the Company has consulted its own legal, accounting,
tax, financial and other advisors, as applicable, to the extent it has deemed appropriate.
(g) The Company agrees, at the Company's expense, to take all steps
reasonably requested by the Remarketing Agent to enable the Remarketing Agent to
comply with the requirements, if any, of Rule l5c2-12, as promulgated and amended
from time to time by the Securities and Exchange Commission under the Exchange Act
("Rule 15c2-12") and as applicable to the Bonds.
(h) The Company (i) agrees to provide the Remarketing Agent with a copy of
the execution version of any document that the Remarketing Agent determines is required
to be filed with the MSRB pursuant to its rules, including, but not limited to, MSRB
Rule G-34(c) ("Rule G-34(c)") in such format, initially PDF word-searchable format, and
at such time as to permit the Remarketing Agent to comply with such rules, and
(ii) authorizes the Remarketing Agent to submit such documents to the MSRB in
accordance with Rule G-34(c) and other applicable rules and regulations. If the
Company determines that redaction of information in any such document is required to
maintain the confidentiality or proprietary nature of such information (such information
to include, but not be limited to, fees, staff names and contact information, and bank
routing or account numbers), the Company shall identiff such information to the
Remarketing Agent in writing and request the Remarketing Agent accept delivery of the
applicable documents with such redactions. The Remarketing Agent agrees to comply
with any such request to the extent permitted by Rule G-3a(c) and such other applicable
rules and regulations. The Company further agrees to hold the Remarketing Agent
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harmless with respect to, and that the Remarketing Agent shall have no responsibility
with respect to, identifuing and/or redacting any confidential information.
(i) The Company shall deliver to the Remarketing Agent such additional
information concerning the business and financial condition of the Company as the
Remarketing Agent may reasonably request.
0) In connection with the performance of its duties hereunder, the
Remarketing Agent agrees to keep such books and records with respect to the
remarketing of the Bonds as shall be consistent with prudent industry practice and to
make such books and records with respect to the remarketing of the Bonds available for
inspection by the Issuer, the Bond Trustee and the Company at all reasonable times.
(k) The Remarketing Agent agrees that, so long as it is the Remarketing
Agent under this Remarketing Agreement, it will perform the obligations contemplated to
be performed by the Remarketing Agent under the Bond Indenture.
2. The Bonds. The Sweetwater Bonds were initially issued on December 12,1984,
and the Converse Bonds were originally issued on NovemberTT, 1995, and currently bear
interest at a Term Interest Rate. On June 3, 2013, it is expected that the interest rate period on
the Bonds will be converted to the Weekly Interest Rate Period.
3. Furnishing of Offering Materials.
(a) The Company agrees to furnish, or cause to be fumished, the Remarketing
Agent with as many copies as the Remarketing Agent may reasonably request of the final
Reoffering Circular, as the same may be supplemented or amended from time to time,
and such other information with respect to the Company or the Bonds as the Remarketing
Agent shall reasonably request from time to time.
(b) If, at any time during the term of this Remarketing Agreement, any event
or condition known to the Company relating to or affecting the Company, the Issuer or
the Projects, or the Loan Agreement, the First Mortgage Bonds, the Company Mortgage,
the Bonds, the Bond Indenture or the documents or transactions contemplated thereby,
shall occur which in the reasonable judgment of the Company might affect the
correctness or completeness of any statement of a material fact contained in the
Reoffering Circular, as it shall have been supplemented or amended with the information
fumished from time to time pursuant to this Section 3, or which in the reasonable
judgment of the Company might result in the Reoffering Circular, as so supplemented or
amended, containing any untrue, incorrect or misleading statement of a material fact or
omitting to state a material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading, (i) the
Company will promptly notiff the Remarketing Agent of the circumstances and details of
such event, and (ii) if, in the opinion of the Remarketing Agent or the Company, such
event or condition requires the preparation and publication of an amendment or
supplement to the Reoffering Circular, the Company, at its expense, will promptly
prepare or cause to be prepared an appropriate amendment or supplement thereto so that
4812-9073-8707 .6
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the statements in the Reoffering Circular as so amended or supplemented will not contain
any untrue, incorrect or misleading statement of a material fact or omit to state a material
fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, in a form and manner
approved by the Remarketing Agent and the Company.
(c) After the Initial Remarketing, in connection with the remarketing of the
Bonds as a result of or in anticipation of (i) the issuance of a Letter of Credit or any
Alternate Credit Facility, or (ii) the establishment of a Daily Interest Rate Period,
Flexible Interest Rate Period or Term Interest Rate Period, the Company shall prepare or
cause to be prepared any disclosure documents (including continuing disclosure
undertakings required by the rules and regulations of the Securities and Exchange
Commission) that in the reasonable opinion of the Remarketing Agent or the Company
are necessary or desirable. All costs incurred in connection with the preparation of such
disclosure documents shall be bome by the Company.
4. Representations, Warranties, Covenants and Agreements of the Company.
The Company represents, warrants, covenants and agrees that:
(a) As of the date hereof and at all times subsequent thereto during the period
up to and including the Closing Date, the Reoffering Circular did not and does not
include any untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties in this Section 4 shall not
apply to (i) information contained in or omitted from the Reoffering Circular or any
amendment or supplement thereto in reliance upon information fumished to the Company
in writing by or on behalf of the Issuer or the Remarketing Agent expressly for use in
connection with the preparation thereof or (ii) information presented under the heading
"THE ISSUERS" or "REMARKETING" in the Reoffering Circular. The Company
authorizes the Reoffering Circular to be used by the Remarketing Agent in connection
with the Initial Remarketing and with the offering and sale from time to time of the
Bonds in the secondary market.
(b) The Loan Agreement, the First Mortgage Bonds, the Company Mortgage
and this Remarketing Agreement have been, or will be when entered into (as applicable),
duly authorized and constitute, or will constitute when entered into (as applicable), the
legal, valid and binding obligations of the Company enforceable in accordance with their
respective terms; provided, however, that (i) the rights and remedies set forth in or under
the Loan Agreement, the First Mortgage Bonds, the Company Mortgage and this
Remarketing Agreement may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws from time to time in effect affecting the
enforcement of creditors' rights generally, (ii) the rights and remedies set forth in or
under the Loan Agreement, the First Mortgage Bonds, the Company Mortgage and this
Remarketing Agreement may be limited by other applicable state and federal laws and
legal and equitable principles but, in the Company's opinion, the Loan Agreement, the
First Mortgage Bonds, the Company Mortgage and this Remarketing Agreement provide
4812-9073-8707 .6
Barclays 2013 RemAgmt
remedies curently enforceable under the laws of the State of Wyoming sufficient to
permit the security interest under the Company Mortgage to be enforced, and the
availability of the remedy of specific performance or of injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought, (iii) no
representation, warranty or covenant is made that any waiver by the Company of its right
to insist upon or plead, or in any matter whatever claim, or take the benefit or advantage
of any appraisement, valuation, stay, extension or redemption laws now or hereafter in
force in any locality where any of the property pledged under the Company Mortgage
may be situated is valid or enforceable, and (iv) no representation, warranty or covenant
is made as to the legality, validity or enforceability of the provisions of the Loan
Agreement, the First Mortgage Bonds, the Company Mortgage or this Remarketing
Agreement which purport to empower the holder thereof to exercise its rights thereunder
without notice to the Company or without a prior judicial hearing.
(c) Performance by the Company under the Loan Agreement, the First
Mortgage Bonds, the Company Mortgage and this Remarketing Agreement does not and
will not violate or conflict with, or result in a breach or violation of, any constitutional
provision or statute of the State of Wyoming or the United States of America, or any
indenture, mortgage, deed of trust, resolution, note agreement or other agreement or
instrument to which the Company is a party or by which the Company is bound oq to its
knowledge, any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its activities or properties.
(d) The Company has been duly incorporated and is now validly existing and
in good standing as a corporation incorporated under the laws of the State of Oregon; the
Company is duly authorized to transact business as a foreign corporation in the State of
Wyoming and is in good standing as a foreign corporation in the State of Wyoming.
(e) There is no action, suit, proceeding, inquiry or investigation, at law or in
equity, or before or by any court, public board or body, other than as described in the
Reoffering Circular, known to the Company to be pending or threatened against or
affecting the Company, nor to the best of the knowledge of the Company is there any
meritorious basis therefor, wherein an unfavorable decision, ruling or finding would
reasonably be expected to materially adversely affect the transactions contemplated by
this Remarketing Agreement or by the Reoffering Circular or which, in any way, would
reasonably be expected to adversely affect the validity or enforceability ofthe Bonds, the
Bond Indenture, the Loan Agreement, the First Mortgage Bonds, the Company Mortgage
or this Remarketing Agreement.
(D All consents of govemmental authorities required in connection with the
execution and delivery by the Company of the Loan Agreement, the First Mortgage
Bonds, the Company Mortgage and this Remarketing Agreement, and the issuance and
sale of the Bonds have been obtained; provided, however, that no representation is made
conceming compliance with the federal securities laws or the securities or "Blue Sky"
laws of the various states.
4812-9073-8707 .6
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(g) All licenses, permits, consents, approvals, authorizations and orders of
govemmental or regulatory authorities ("authorizations") as are necessary for the
Company to own its properties and conduct its business in the manner described in the
Reoffering Circular have been obtained, and the Company has fulfilled and performed all
of its material obligations with respect to such authorizations, and no event has occurred
that permits, or after notice or lapse of time or both would permit, revocation or
termination thereof or result in any other material impairment of the rights of the holder
of such authorizations.
(h) The Company will diligently cooperate with the Remarketing Agent to
qualify the Bonds and/or the related obligations of the Company for offer and sale under
the securities or "Blue Sky" laws of such states as the Remarketing Agent may request,
provided that in no event shall the Company be obligated to qualify to do business in any
state where it is not now so qualified or to take any action which would subject it to
general service of process in any state where it is not now so subject. It is understood
that the Company is not responsible for compliance with or the consequences of failure to
comply with such securities or "Blue Sky" laws.
(i) The Company is not and, except as disclosed in the Reoffering Circular,
has not been in default under Rule l5c2-12.
0) The Company is not and never has been in default as to the payment of
principal or interest with respect to the Bonds.
(k) The Company will not take or omit to take any action which action or
omission will adversely affect the exclusion from gross income for federal income tax
purposes of the interest on the Bonds.
5. Conditions to Remarketing Agent's Obligations. The obligations of the
Remarketing Agent under this Remarketing Agreement have been undertaken in reliance on, and
shall be subject to, the due performance by the Company of the obligations and agreements to be
performed by the Company hereunder.
(a) The obligations of the Remarketing Agent hereunder with respect to the
Initial Remarketing are also subject, in the discretion of the Remarketing Agent, to the
following further conditions :
(i) The Bond Indenture, the Loan Agreement, the First Mongage
Bonds and the Company Mortgage shall be in full force and effect and shall not
have been amended, modified or supplemented in any way which would
materially and adversely affect the Bonds, except as may have been agreed to in
writing by the Remarketing Agent.
(ii) No "Event of Default" (as defined in the Bond Indenture, the Loan
Agreement or the Company Mortgage) shall have occurred and be continuing and
no event shall have occurred and be continuing which, with the passage of time or
giving of notice, or both, would constitute such an Event of Default under the
Bond Indenture, the Loan Agreement or the Company Mortgage.
8
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(iii) The marketability of the Bonds or their market price must not be,
in the reasonable opinion of the Remarketing Agent, materially adversely affected
by (A) an amendment to or proposal to amend the Constitution of the State of
Wyoming or of the United States or by any federal or Wyoming legislation or
proposed legislation or by any decision of any court of the United States or by any
ruling or regulation (final, temporary or proposed) on behalf of the Treasury
Department of the United States, the Internal Revenue Service or any other
authority of the United States, the State of Wyoming (including any Executive
Order or Proclamation of the Govemor thereof), or any comparable legislative,
judicial or administrative development affecting the federal tax status of any of
the Issuer, its property or income, or the interest on its bonds (including the
Bonds); (B) an outbreak or escalation of hostilities or other calamity or crisis;
(C) a general suspension of or material limitation on trading on the New York
Stock Exchange or other national securities exchange, the establishment of
minimum prices on any such exchange or the declaration of a general banking
moratorium by Wyoming authorities or by federal or New York authorities; (D) a
material disruption in securities settlement, payment or clearance services shall
have occurred; (E) a downgrading or withdrawal by a national rating service of a
rating of the Bonds or any class of the Company's securities or, with respect to
the Company's securities, a public ilnnouncement by such a service that it is
considering such a downgrading or withdrawal (excluding any such
announcement existing as of the date hereof); (F) an amendment or supplement to
the Reoffering Circular; (G) the establishment of any new restrictions on
transactions in securities materially affecting the free market for the securities
(including the imposition of any limitations on interest rates) or the extension of
credit by, or the charge to the net capital requirements of, underwriters established
by any such exchange, the Securities and Exchange Commission, any other
federal or state agency or the United States Congress or by Executive Order; or
(H) a material adverse change in the general affairs or in the financial position or
net assets of the Company as a whole, except as disclosed by or contemplated in
the Reoffering Circular.
(iv) No decision of any federal or state court and no ruling of the
Securities and Exchange Commission or any other governmental agency has been
made or issued to the effect that (A) the Bonds or any other securities of the Issuer
or of any similar body of the type contemplated in this Remarketing Agreement,
the obligations of the Company under the Loan Agreement, the exercise of tender
rights by the Holders of the Bonds or the remarketing of the Bonds by the
Remarketing Agent as contemplated by the Bond Indenture and this Remarketing
Agreement are subject to registration requirements of the Securities Act of 1933,
as amended (the "Securities Act"), or (B) the qualification of an indenture in
respect of the Bonds or any such securities is required under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act").
(v) On or before the Closing Date, the Remarketing Agent must
receive the following documents, each reasonably satisfactory in form and
substance to the Remarketing Agent and to its counsel:
4812-9073-8707.6
Barclays 2013 RemABml
(A) A copy of the Reoffering Circular.
(B) A certificate, dated the Closing Date, of duly authorized
officers of the Company as follows:
(1) Certiffing that, as of the Closing Date, the
representations and warranties contained in Section 4 of this
Remarketing Agreement are true and correct and that the Company
has complied with all its agreements therein contained;
(2) Certifying that there has been no material adverse
change in the general affairs or in the financial position or net
assets of the Company as a whole, as shown in the Reoffering
Circular, other than changes disclosed by or contemplated in the
Reoffering Circular or in an amendment or supplement thereto;
and
(3) Stating that they have examined the Reoffering
Circular and that, to the best of their knowledge after reasonable
inquiry, the Reoffering Circular did not as of its date and does not
as of the Closing Date contain any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(C) Opinions, dated the Closing Date and addressed to the
Remarketing Agent, of (1) Paul J. Leighton, Esq., counsel to the
Company, substantially in the form attached hereto as Exhibit A;
(2) Chapman and Cutler LLP, Bond Counsel, in the form attached as
Appendices C-l and C-3 to the Reoflering Circular; and (3) Counsel to the
Remarketing Agent, substantially in the form attached hereto as Exhibit B,
in each case with such changes as shall be requested by such counsel and
approved by the Remarketing Agent, which approval shall not be
unreasonably withheld.
(D) A letter, dated the Closing Date, of Chapman and
Cutler LLP, Bond Counsel, to the effect that (l) the statements contained
in the Reoffering Circular under the captions "THE BONDS" (other than
information relating to the book-entry system of registration for the
Bonds), *THE LOAN AGREEMENTS" and *THE INDENTURES" and
in Appendices B and C insofar as such statements constitute summaries of
the Bonds, the Loan Agreement and the Bond Indenture, or the opinions of
Bond Counsel constitute fair summaries of the portions of such documents
purported to be summarized or the opinions of Bond Counsel; and (2) the
statements in the Reoffering Circular under the caption "TAX
EXEMPTION" are accurate statements or summaries of the matters
summarized therein.
t0
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Barclays 20 13 RemAgmt
(E) Evidence satisfactory to the Remarketing Agent that on the
Closing Date there will be in effect ratings on the Bonds from Standard
& Poor's Rating Services, a division of The McGraw-Hill Companies,
Inc., of "A/A-2" and from Moody's Investors Service,lnc. of "A2lP-2."
(F) Executed copies ofthe Bond Indenture.
(G) Executed copies of the Loan Agreement.
(H) Such additional opinions, certificates or documents as the
Remarketing Agent or its counsel may reasonably request.
(b) The obligations of the Remarketing Agent hereunder with respect to each
date on which the Bonds are to be offered and sold in the secondary market pursuant to
this Remarketing Agreement are also subject, in the discretion of the Remarketing Agent,
to the following further conditions:
(i) The Bond lndenture, the Loan Agreement, the First Mortgage
Bonds, and the Company Mortgage shall be in full force and effect and shall not
have been amended, modified or supplemented in any way which would
materially and adversely affect the Bonds, except as may have been agreed to in
writing by the Remarketing Agent, and there shall be in full force and effect such
additional resolutions, agreements, certificates (including such certificates as may
be required in order to establish the exclusion ofinterest on the Bonds from gross
income for federal, state and local income tax purposes) and opinions as shall be
necessary to effect the transactions contemplated hereby, which resolutions,
agreements, certificates and opinions shall be reasonably required by, and
satisfactory in form and substance to, Bond Counsel and Counsel to the
Remarketing Agent; and
(ii) There shall be no material adverse change in the properties or
condition (financial or otherwise) of the Company since the date of the Reoffering
Circular relating to the Bonds being offered and sold on such date, as such
Reoffering Circular may be amended or supplemented; no "Event of Default" (as
defined in the Bond Indenture, the Loan Agreement or the Company Mortgage)
shall have occurred and be continuing and no event shall have occurred and be
continuing which, with the passage of time or giving of notice or both, would
constitute such an Event of Default under the Bond Indenture, the Loan
Agreement or the Company Mortgage; and no event shall have occurred which,
independent of the fact that such event with the giving of notice or passage of
time or both would be an Event of Default under the Bond Indenture, the Loan
Agreement or the Company Mortgage, would have a materially adverse effect on
the properties or condition (financial or otherwise) of the Company.
Subject to Section 10.20 of the Bond Indenture, if the Company is unable to
satisfu any such condition, or if the Remarketing Agent's obligations are terminated for
any reason permitted by this Remarketing Agreement, the Remarketing Agent may
il
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immediately cancel this Remarketing Agreement and, if it does, the Remarketing Agent
will not be under further obligation under this Remarketing Agreement or the Bond
Indenture, and the Remarketing Agent shall be deemed to have resigned as Remarketing
Agent under the Bond Indenture.
6. Term and Termination of Remarketing Agreement.
(a) This Remarketing Agreement shall become effective upon execution by
the Remarketing Agent and the Company, and, subject to the terms and conditions
hereof, shall continue in full force and effect with respect to the Bonds until the
establishment of a Term Interest Rate Period extending to the final maturity of the Bonds.
(b) The Remarketing Agent may cancel this Remarketing Agreement at any
time by written notice to the Bond Trustee and the Company if, between the date hereof
and the Closing Date, an event specified in clause (a)(i), (aXii), (a)(iii) or (a)(iv) of
Section 5 shall have occurred. If this Remarketing Agreement is cancelled by the
Remarketing Agent due to an event specified in clause (a)(i), (a)(ii), (a)(iii) or (a)(iv) of
Section 5 or the Company's failure to satisff any condition set forth in clause (a)(v) of
Section 5, the Company shall not be obligated to pay the amount specified in clause (a)(i)
of Section 7 but the Company shall be responsible for the out-of-pocket expenses of the
Remarketing Agreement specified in clause (aXii) of Section 7.
(c) Following the Initial Remarketing, in accordance with the provisions of
Section 10.20 of the Bond Indenture, (i)the Remarketing Agent may at any time resign,
without a successor in place, by giving at least 30 days' prior written notice to the Issuer,
the Company, the Registrar and the Bond Trustee, and (ii) the Remarketing Agent may be
removed at any time at the direction of the Company by a written instrument filed with
the Remarketing Agent, the Registrar and the Bond Trustee at least 30 days prior to the
effective date of such removal.
(d) In addition to the provisions of paragraph (c) of this Section, after the
Initial Remarketing the Remarketing Agent may suspend its obligations under this
Remarketing Agreement at any time by notifying the Issuer, the Company and the Bond
Trustee in writing or by telegram or other electronic communication of its election so to
do, if:
(i) Legislation shall have been introduced in or enacted by the
Congress of the United States of America or adopted by either House thereof, or
legislation pending in the Congress of the United States of America shall have
been amended, or Iegislation shall have been recommended for passage (by press
release, other form of notice or otherwise) by the President of the United States of
America, the Treasury Department of the United States of America, the Internal
Revenue Service or Chairman or ranking minority member of the U.S. Senate
Committee on Finance or the U.S. House of Representatives Committee on Ways
and Means or legislation shall have been proposed for consideration by either
such Committee by any member thereof or legislation shall have been favorably
reported for passage to either House of the Congress of the United States of
4812-9073-8707 .6
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t2
America by a Committee of such House to which legislation has been referred for
consideration, or a decision by a court established under Article III of the
Constitution of the United States of America shall be rendered or a ruling
regulation or offrcial statement by or on behalf of the Treasury Department of the
United States of America, the Intemal Revenue Service or other govemmental
agency shall be made, with respect to federal taxation of revenues or with respect
to other income of the general character expected to be derived under the Bond
Indenture by the Issuer or upon interest received on securities of the general
character of the Bonds or which would have the effect of changing, directly or
indirectly, the federal income tax consequences ofreceipt ofinterest on securities
of the general character of the Bonds in the hands of the owners thereof which in
the reasonable opinion of the Remarketing Agent would materially adversely
affect the marketability of the Bonds;
(ii) Legislation shall be introduced by committee, by amendment or
otherwise, in, or be enacted by, the House of Representatives or the Senate of the
Congress of the United States of America, or a decision by a court of the
United States of America shall be rendered, or a stop order, ruling, regulation or
official statement by, or on behalf of, the United States Securities and Exchange
Commission or other govemmental agency having jurisdiction of the subject
matter shall be made or proposed, to the effect that the offering or sale of
obligations of the general character of the Bonds, as contemplated hereby, is or
would be in violation of any provision of the Securities Act, as amended and as
then in effect, or the Exchange Act, as amended and as then in effect, or the Trust
Indenture Act, as amended and as then in effect, or with the purpose or effect of
otherwise prohibiting the offering or sale of obligations of the general character of
the Bonds, or the Bonds, as contemplated hereby;
(iii) Any information shall have become known, which, in the opinion
of the Remarketing Agent, makes untrue, incorrect or misleading in any material
respect any statement or information contained in the Reoffering Circular, as the
information contained therein has been supplemented or amended by other
information furnished in accordance with Section 3 hereof, or causes the
Reoffering Circular, as so supplemented or amended, to contain an untrue,
incorrect or misleading statement of a material fact or to omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading;
(iv) Except as provided in clauses (i) and (ii) hereof, any legislation,
resolution, ordinance, rule or regulation shall be introduced in, or be enacted by,
any federal governmental body, department or agency of the United States of
America, the State of New York or the State of Wyoming, or a decision by any
court of competent jurisdiction within the United States of America, the State of
New York or the State of Wyoming shall be rendered which, in the opinion of the
Remarketing Agent, materially adversely affects the marketability of the Bonds;
4812-9073-8707.6
Barclays 2013 RemAgml
13
(v) Additional material restrictions not in force as of the date hereof
shall have been imposed upon trading in securities generally by any governmental
authority purporting to have jurisdiction regarding the trading of the Bonds or by
any national securities exchange;
(vi) A material disruption in securities settlement, payment or
clearance services shall have occurred;
(vii) Any govemmental authority shall impose, as to the Bonds, or
obligations of the general character of the Bonds, any material restrictions not
now in force, or increase materially those now in force;
(viii) A general banking moratorium shall have been established by
Wyoming authorities, or federal or New York authorities;
(ix) Any rating of the Bonds shall have been downgraded or withdrawn
by any securities rating agency, which, in the opinion of the Remarketing Agent,
materially adversely affects the marketability of the Bonds;
(x) There shall have occurred the outbreak or material escalation or
material reescalation of hostilities involving the United States of America, or the
declaration by the United States of a national emergency or war, which in the
judgment of the Remarketing Agent has had a materially adverse effect on the
marketability of the Bonds on the terms and in the manner contemplated by the
Reoffering Circular; or
(xi) An event, including, without limitation, the bankruptcy or default
of any other issuer of or obligor on obligations of the general character of the
Bonds or on tax-exempt commercial paper, shall have occurred which, in the
opinion of the Remarketing Agent, makes the marketability of the Bonds at
interest rates not in excess of the maximum interest rate permitted by Bond
Indenture impossible over an extended period of time.
7. Payment of Fees and Expenses. In consideration of the obligations to be
performed by the Remarketing Agent under this Remarketing Agreement, the Company agrees
to pay the Remarketing Agent the following fees:
(a) on the Closing Date, (i) an amount equal to (such fee being exclusive of
the Remarketing Agent's out-of-pocket funds) $30,450.00 as consideration for the Initial
Remarketing and (ii) an amount equal to $2,814.26 in connection with the out-of-pocket
expenses of the Remarketing Agent;
(b) an annual fee equal to 0.10% of the weighted average daily principal
amount of Bonds outstanding during such period in which the Bonds shall bear interest at
a Weekly Interest Rate or Flexible Interest Rate (in the event the Bonds are converted to
bear interest at a Daily Interest Rate, the Remarketing Agent and Company will agree on
a fee at that time);
4812-9073-8707 .6
Barclays 2013 RemAgmt
t4
(c) in connection with or in anticipation of the establishment of a Term
Interest Rate Period, an amount as shall be agreed to by the Company and the
Remarketing Agent at that time; and
(d) expenses reasonably incurred by the Remarketing Agent in connection
with its services hereunder, including reasonable expenses in connection with the
preparation of offering materials as provided in Section 3.
Payment of the fees and expenses referred to in clause (b) of the first sentence of this
Section shall be made by the Company as soon as practicable upon receipt of an invoice therefor
from the Remarketing Agent, such invoice to be sent quarterly in arrears on a calendar quarter.
Payment of the fee referred to in clause (c) of the first sentence of this Section shall be made by
the Company on the effective date of the establishment of a Term Interest Rate Period and shall
include all reasonable costs relating to the preparation ofany disclosure documents in connection
with the establishment of a Term Interest Rate Period. The Remarketing Agent will not incur the
expenses referred to in clause (d) of the first sentence of this Section without the prior approval
of the Company. The Company agrees to pay the Remarketing Agent's fees and reasonable
expenses under this Remarketing Agreement without regard to any claim, setoff, defense, or
other right that the Company may have at any time against the Remarketing Agent or any other
person, whether in connection with this Remarketing Agreement, the Bonds or any unrelated
transactions.
The Company further agrees to pay the reasonable fees and expenses of Kutak Rock LLP
incurred in its capacity as Counsel to the Remarketing Agent in connection with the Initial
Remarketing.
8. Indemnification and Contribution.
(a) In connection with any remarketing of the Bonds, the Company will
indemnify and hold harmless the Remarketing Agent and its officers, directors and
employees and each person, if any, who controls any Remarketing Agent within the
meaning of the Securities Act (collectively, the "indemnified parties"), to the extent
permitted under applicable law, against any losses, claims, damages or liabilities, joint or
several, to which the indemnified parties may become subject, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact contained in the
Reoffering Circular, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading or (ii) the representations and warranties set forth
in Section 4 hereof being untrue on the Closing Date; and will reimburse the indemnified
parties for any legal or other expenses reasonably incurred by the indemnified parties in
connection with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company will not be liable in any such case to any
indemnified party to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any of such documents, or under the caption "THE ISSUERS" or
4812-9073-8707 .6
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l5
"REMARKETING" or in reliance upon and in conformity with written information
fumished to the Company by, with respect to the Issuer, the Issuer, or with respect to the
Remarketing Agent or a controlling person of the Remarketing Agent, the Remarketing
Agent, specifically for use therein; and provided further that the indemnity provision
contained in this subparagraph (a) with respect to the Reoffering Circular or any
amendment or supplement thereto shall not inure to the benefit of the Remarketing Agent
(or to the benefit of any person controlling the Remarketing Agent) with respect to any
such loss, claim, damage, liability or action asserted by any person if a copy of the
Reoffering Circular (as amended or supplemented) not containing the untrue statement or
alleged untrue statement or omission or alleged omission that is the basis of the loss,
claim, damage, liability or action for which indemnification is sought was available to the
Remarketing Agent and was not properly mailed, delivered or given to such person. This
indemnity provision will be in addition to any liability which the Company may
otherwise have.
(b) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof; but the omission so to
notifr the indemnifyingparty will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 8 except to the extent that the
indemniffing party is able to demonstrate actual prejudice in not being so notified. In
case any such action is brought against any indemnified party, and it notifies an
indemnifring party of the commencement thereof, the indemniffing party will be entitled
to participate in, and, to the extent that it may wish, jointly with any other indemnifying
party, similarly notified, to assume the defense thereof so long as its interests are not
adverse to those of the indemnified party, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemniffing party to such indemnified party
of its election to assume the defense thereof the indemnifuing party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. Upon assumption by the indemnifuing party of the
defense of any such action or proceeding, the indemnified party shall have the right to
participate in such action or proceeding and to retain its own counsel but the
indemnifuing party shall not be liable for any legal expenses of other counsel
subsequently incurred by such indemnified party in connection with the defense thereof
unless (i) the indemnifying party has agreed to pay such fees and expenses, (ii) the
indemnifring party shall have failed to employ counsel reasonably satisfactory to the
indemnified party in a timely manner, or (iii) the indemnified party shall have been
advised by counsel that there are actual or potential conflicting interests between the
indemnifying party and the indemnified party, including situations in which there are one
or more legal defenses available to the indemnified party that are different from or
additional to those available to the indemnifying party. If the indemnifying party does
not elect to assume the defense of any such suit, it will reimburse the indemnified parties
for the reasonable fees and expenses ofany counsel retained by them. In the event that
the parties to any such action (including impleaded parties) include one or more
indemnifuing parties and one or more indemnified parties, and one or more indemnified
4t12-s073-8707.6 16
Barclays 2013 RemAgmt
parties shall have been advised by counsel reasonably satisfactory to the Remarketing
Agent and the Company that there may be one or more legal defenses available to any of
the indemnified parties, which are different from, additional to, or in conflict with those
available to any of the indemnifring parties, the indemnifying parties will reimburse the
indemnified parties for the reasonable fees and expenses of any counsel retained by the
indemnified parties (it being understood that the indemniffing parties shall not, in
connection with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attomeys for all
indemnified parties, which firm shall be designated by the indemnified parties, the
Remarketing Agent or the Company, as the case may be). Each indemnifying party
agrees promptly to notifu each indemnified party of the commencement of any litigation
or proceedings against it in connection with the remarketing of the Bonds. The
indemniffing party shall not consent to the terms of any compromise or settlement of any
action defended by the indemnifying party in accordance with the foregoing without the
prior consent of the indemnified party. No indemnifuing party shall be liable under this
Section 8 for the amount of any compromise or settlement of any action unless such
compromise or settlement has been approved in writing by such indemnifyinB party,
which approval shall not be unreasonably withheld. The indemnity agreements contained
in this Section 8 shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Remarketing Agent, or the delivery of and any
payment for any Bonds hereunder, and shall survive the termination or cancellation of
this Remarketing Agreement.
(c) If the indemnification provided for in subparagraph (a) of this Section 8 is
unavailable, because of limitations imposed by securities laws or for any other reason, to
a party that would otherwise have been an indemnified party under subparagraph (a)
above in respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each party that would have been an indemnifuing party
thereunder shall, in lieu of indemniffing such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion so that the Remarketing Agent
is responsible for that portion represented by the percentage that the Remarketing Agent's
commission with respect to such remarketing bears to the aggregate principal amount of
such Bonds being remarketed and the Company is responsible for the balance; provided
that the Remarketing Agent's contribution amount shall not exceed the total amount of
the Remarketing Agent's remarketing fees and commissions for the preceding l2-month
period. Furthermore, no person guilty of fraudulent misrepresentation within the meaning
of Section ll(f) of the Securities Act shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation within the meaning of
Section 1 1(f1 of the Securities Act. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subparagraph (c) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claims (which shall be limited as provided in
subparagraph (b) above if the indemnifying party has assumed the defense of any such
action in accordance with the provisions thereof).
4,tz-9073-8707 6
17
Barclays 2013 RemABmt
9. Dealing in Bonds by Remarketing Agent. The Remarketing Agent, either as
principal or agent, may in good faith buy, sell, own, hold and deal in any of the Bonds, and may
join in any action which any Bondholder may be entitled to take with like effect as if it did not
act in any capacity hereunder. The Remarketing Agent in its individual capacities, either as
principal or agent, may also engage in or be interested in any financial or other transaction with
the Issuer or the Company, and may act as depositary, trustee, or agent for any committee or
body of Bondholders or other obligations of the Issuer or the Company, as freely as if it did not
act in any capacity hereunder. Under such circumstances, the Remarketing Agent shall have
only those rights set forth in the Bonds.
10. Remarketing Agent Not Acting as Underwriter. The Remarketing Agent shall
be construed to be acting as agent only for and on behalf of the owners from time to time of the
Bonds.
I t.Miscellaneous.
(a) Except as otherwise specifically provided in this Remarketing Agreement,
all notices, demands and formal actions under this Remarketing Agreement shall be in
writing and mailed, by registered or certified mail, postage prepaid, retum receipt
requested, telegraphed or delivered, as follows:
The Remarketing Agent:Barclays Capital Inc.
745 Seventh Ave.
New York, NY 10019
Attention: Municipal Short-Term Desk
PacifiCorp
Suite 1900
825 NE Multnomah
Portland, OR 97232
Attention: VP and Treasurer
The Bank ofNew York Mellon
Trust Company, N.A.
Suite 1020
2 North LaSalle Street
Chicago, IL 60602
Attention: Global Corporate Trust
The Bank of New York Mellon
Trust Company, N.A.
Suite 1020
2 North LaSalle Street
Chicago, lL 60602
Attention: Global Corporate Trust
The Company:
The Bond Trustee for the Bonds:
The Paying Agent for the Bonds:
4812-9073-8707 .6
Barclays 2013 RemAgmt
l8
Converse County, Wyoming:Converse CounW Courthouse
107 North 5n Stieet
Douglas, WY 82633
Attention: County Clerk
SweetwaterCounty,Wyoming: SweetwaterCountyCourthouse
80 West Flaming Gorge Way
Green River, WY 83935
Attention: County Clerk
Each party may, by notice given under this Remarketing Agreement, designate other
addresses to which subsequent notices, requests, reports or other communications shall be
directed.
(b) The obligations of the respective parties hereto may not be assigred or
delegated to any other person without the consent of the other parties hereto. This
Remarketing Agreement will inure to the benefit of and be binding upon the Company
and the Remarketing Agent and their respective successors and assigns, and will not
confer any rights upon any other person, other than persons, if any, controlling a
Remarketing Agent within the meaning of the Exchange Act and the Company and its
directors and alternate directors or any person who controls the Company within the
meaning of Section l5 of the Securities Act. The terms "successors" and "assigns" shall
not include any purchaser ofany ofthe Bonds merely because ofsuch purchase.
(c) The obligations and liabilities of the Company hereunder are general
obligations of the Company. Neither the directors, officers or employees of the Company
nor any person executing this Remarketing Agreement shall be liable personally on the
obligations of the Company hereunder or be subject to any personal liability or
accountability by reason of the execution hereof. Neither the faith and credit nor the
taxing power of the State of Wyoming or any political subdivision thereof is pledged to
the obligations of the Company hereunder.
(d) All of the representations and warranties of the Company in this
Remarketing Agreement shall remain operative and in full force and effect, regardless of
(i) any investigation made by or on behalf of the Remarketing Agent and (ii) termination
of this Remarketing Agreement.
(e) Section headings have been inserted in this Remarketing Agreement as a
matter of convenience ofreference only, and it is agreed that such section headings are
not a part of this Remarketing Agreement and will not be used in the interpretation of any
provisions of this Remarketing Agreement.
(f) If any provision of this Remarketing Agreement shall be held or deemed
to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular
case in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any
provisions of any constitution, statute, rule of public policy, or any other reason, such
19
4812-9073-8707 .6
Barclays 2013 RemAgmt
circumstances shall not have the effect of rendering the provision in question invalid,
inoperative or unenforceable in any other case or circumstance, or ofrendering any other
provision or provisions of this Remarketing Agreement invalid, inoperative or
unenforceable to any extent whatsoever.
(g) This Remarketing Agreement may be executed in several counterparts,
each of which shall be regarded as an original and all of which shall constitute one and
the same document.
(h) This Remarketing Agreement may not be altered, amended, supplemented
or modified in any manner whatsoever except by written instrument sigrred by the
Company and the Remarketing Agent.
(i) To the fullest extent permitted by law, each of the parties hereto waives
any right it may have to a trial by jury in respect of litigation directly or indirectly arising
out of, under or in connection with this Remarketing Agreement. Each party further
waives any right to consolidate any action in which a jury trial has been waived with any
other action in which a jury trial cannot be or has not been waived.
[Remainder of page intentionally left blank]
() This Remarketing Agreement shall be governed by and construed tn
accordance with the laws of the State of New York without grving effect to the principles
of conflict of laws thereof.
Verf, tnrly yours,
BARCLAYS CAPITAL INC., as Remarketing
Agent
Title ),a.€c-ft,fi*
Accepted and agreed:
PACIFICORP
By
BnrceN. Williams
Vice President and Treasurer
48t2-9073-8'7A7.6
Barclays 2013 RernAgmt
2t
0) This Remarketing Agreement shall be govemed by and construed in
accordance with the laws of the State of New York without giving effect to the principles
of conflict of laws thereof.
Verytruly yours,
BARCLAYS CAPITAL [NC., as Remarketing
Agent
Accepted and agreed:
PACIFICORP
,, $" "- tt uJ0.*
Bruce N. Williams
Vice President and Treasurer
48t24073-t707.6
Barclays 2013 RcmAgmt
2t
EXHIBIT A
OPINION OF COUNSEL TO THE COMPANY
See Attached
4812-9073-8707 .6
Barclays 2013 RemAgmt
[LETTERHEAD OF MIDAMERICAN ENERGY]
June 3,2013
The Bank of New York Mellon Trust Company, N.A., as Successor Trustee
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Barclays Capital Inc.
745 Seventh Avenue
New York, New York 10019
$15,000,000
Sweetwater County, Wyoming
Pollution Control
Revenue Bonds
(PacifiCorp Project)
Series 1984
$5,300,000
Converse County, Wyoming
Environmental Improvement
Revenue Bonds
(PacifiCorp Project)
Series 1995
Ladies and Gentlemen:
I have served as counsel to PacifiCorp (the "Company") in connection with the execution
and delivery by the Company of the Remarketing Agreement dated May 22, 2013 (the
"Remarketing Agreement") between the Company and Barclays Capital Inc. (the "Agent")
relating to the abovementioned two issues of bonds (collectively, the "Bonds"). Capitalized
terms used herein and not otherwise defined shall have the meanings assigned such terms in the
Reoffering Circular dated May 22,2013 (the "Reoffering Circular") relating to the Bonds.
I have examined the Reoffering Circular, the Remarketing Agreement, the Company
Mortgage, the Fifteenth Supplemental Indenture and the First Mortgage Bonds (collectively, the
"Company Documents") and the Indenture and the Loan Agreement, and have discussed the
foregoing documents and such other matters with such officials of the Company, as I consider
necessary and appropriate to enable me to express the opinions stated in this letter. I have relied,
to the extent that I deem such reliance proper, upon certificates of public officials and certificates
of officers of the Company with respect to the accuracy of material factual matters contained
therein which were not independently established.
I have assumed, with your consent, for the purposes of the opinions expressed in this
letter, that the Company Documents have been duly authorized, executed and delivered by each
party thereto, other than the Company.
4812-9073-8707 .6
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A-2
Based upon the foregoing, it is my opinion that:
(a) the Company (i) is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Oregon; (ii) has the corporate power and
authority to own its properties and to conduct its business as described in the Reoffering
Circular; and (iii) except as described in the Reoffering Circular, is duly registered or
qualified to do business and is in good standing as a foreign corporation in each
jurisdiction in which such registration, qualification or good standing is required (whether
by reason of the ownership or leasing of property, the conduct of its business or
otherwise), except where the failure to so register or qualify or be in good standing could
not, in the aggregate, reasonably be expected to have a Materially Adverse Effect;
(b) the Company has corporate power and authority to execute and deliver
each Company Document and to take all actions required or permitted to be taken by the
Company by or under, and to perform its obligations under each Company Document;
(c) the Company has duly taken all necessary corporate action for the
authorization of: (i) the execution, delivery and performance by the Company of the
Company Documents; (ii) the distribution of the Reoffering Circular; and (iii) the
carrying out, giving effect to, consummation and performance by the Company of the
transactions and obligations contemplated by the Company Documents and the
Reoffering Circular, provided that no opinion is expressed with respect to compliance
with any securities laws;
(d) each Company Document has been duly authorized, executed and
delivered by the Company and constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the enforcement of creditors' rights or contractual
obligations generally or by general principles ofequity orjudicial discretion;
(e) the First Mortgage Bonds continue to be pledged to secure the Company's
loan payment obligation under the Loan Agreement, as amended and restated by the
Supplemental Loan Agreement;
(0 the execution and delivery by the Company of the Company Documents,
the performance by the Company of its obligations thereunder and the consummation by
the Company of the transactions therein contemplated do not and will not contravene the
Third Restated Articles of Incorporation or bylaws of the Company or, to the best of my
knowledge, any rule, order, writ, injunction or decree of any court, federal or state
regulatory body, administrative agency or other govemmental body applicable to the
Company, or result in a breach of any of the terms, conditions or provisions of, or
constitute a default under any material mortgage, indenture, agreement or instrument to
which the Company is a party or by which it or any of its properties is bound or, to the
best of my knowledge, result in the creation or imposition of any mortgage, lien, charge
or encumbrance of any nature whatsoever upon any of the properties or assets of the
Company;
4812-9073-8707.6
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A-3
(g) on and as of the date hereof all authorization, consent or approval of,
notices to, registrations or filing with or action in respect of any governmental body,
agency, regulatory authority or other instrumentality or court required to be obtained,
given or taken on behalf of the Company in connection with (i) the remarketing and
public reoffering of the Bonds and (ii) the execution, delivery and performance by the
Company of the Company Documents, other than Order No.83-400, DocketUF39l5
issued by the Public Utility Commission of Oregon (*PUCO") on July 15, 1985 and
subsequently supplemented by Orders No.83-507 on August 16, 1983, 83-786 on
December 6, 1983, 84-077 on February 7, 1984 and 84-960 on December 3, 1984; Order
No.86-1299, DocketUF3ggz issued by the PUCO on December22, 1986; Order
No.95-518, Docket UF-4128 issued by the PUCO on May 25,1995; Order No.03-135,
DocketuF-4l95 issued by the PUCO on February21,2003; Order No. 18169, Case
No. U-1046-129 issued by the Idaho Public Utilities Commission (*IPUC") on July 8,
1983; Order20937, Case No. U-1046-159 issued by the IPUC on December23, 1986;
Order No. 26039, Case No. PAC-S-95-2 issued by the IPUC on May 30, 1995; Order
No.29201, Case No. PAC-E-03-I issued by the IPUC on February 24, 2003; Order
Granting Application, Cause N. FR-83-133 issued by the Washington Utilities and
Transportation Commission ("WTUC") on July 20,1983 and subsequently supplemented
by the First Supplemental Order on December 8, 1983 and the Second Supplemental
Order on December 10, 1984; Order Granting Application, Cause No. FR-86-152 issued
by the WTUC on December 24, 1986; Order Granting Application, Docket UE-950490
issued by the WTUC on May 24, 1995; and Order No. 01, Docket No. UE-030077 issued
by the WTUC on February 28,2003, each of which has been duly obtained and is in full
force and effect, provided that no opinion is expressed with respect to compliance with
any securities laws;
(h) to the best of my knowledge, other than as described in the Reoffering
Circular, the Company has not received notice of or process in any action, suit,
proceeding, inquiry or investigation before or by any court, public board or body pending
against the Company, nor is any such action, suit, proceeding, inquiry or investigation
pending or threatened against the Company, wherein an unfavorable decision, ruling or
finding would have a material adverse effect on the properties, business, financial
condition or results of operations of the Company or the transactions contemplated by the
Company Documents or the Reoffering Circular, or which would adversely affect the
validity or enforceability of, or the authority of the Company to perform its obligations
under, Company Documents or materially adversely affect the ability of the Company to
perform its obligations thereunder; and
(i) to the best of my knowledge, the Company is not in default under the
Company Documents, the Loan Agteement or any material indenture or other agreement
or instrument goveming outstanding indebtedness issued by the Company nor, to the best
of my knowledge, has any event occurred, which event is continuing, which with notice
or the passage of time or both would constitute a default under any such document.
I have not passed upon, and the foregoing assumes and is subject to, the tax-exempt
status of interest on the Bonds, as to which a separate opinion has been given to Chapman and
4812-9073-8707 .6
Barclays 2013 RemAgml
A-4
Cutler LLP. In addition, I express no opinion as to the application or effect of any securities law
to the transactions contemplated by the Reoffering Circular.
Additionally, I advise you that, without having undertaken to determine independently
the accuracy or completeness of the statements contained in the Reoffering Circular, except as
set forth above, nothing has come to my attention in the course of my participation in the
preparation of the Reoffering Circular and in the transactions contemplated thereby, or in the
performance of my duties as Counsel to the Company, or othenvise, that causes me to believe, as
of the date hereof, that the Reoffering Circular (except for the financial statements and other
financial and statistical data included or incorporated by reference therein, as to which I express
no opinion) contains any untrue or misleading statement of a material fact or omits to state any
material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
The opinions expressed herein are limited to matters govemed by the laws of the
United States of America and the State of Oregon and, as to the opinions expressed in
paragraph (g) above, the laws of the States of California, Idaho, Utah, Washington and
Wyoming, that are applicable to PacifiCorp as a regulated public utility in such states, and I
express no opinion as to the law of any other jurisdiction. In rendering the opinions expressed
herein, I have relied upon the attached opinion letter of Jeffery B. Erb, Esq., Assistant General
Counsel to the Company, zls to the matters expressed therein and the opinions expressed herein
are subject to all of the assumptions and qualifications recited in the opinion letter attached
hereto.
I hereby confirm my consent to the use of my name on the cover page and under the
caption "CERTAIN LEGAL MATTERS" in the Reoffering Circular.
This opinion is addressed solely to you in connection with the transactions contemplated
by the Company Documents and the Reoffering Circular and is not to be relied upon by any
other person or for any other purposes or quoted or referred to in any public document or filed
with any governmental agency or other person without my written consent.
Very truly yours,
Paul J. Leighton
4812-9073-8707 .6
Barclays 2013 RemAgml
A-5
EXHIBIT B
OPIMON OF COT]NSEL TO REMARKETING AGENT
See Attached
4E12-9073-8707.6
Barclays 2013 RemAgmt
[LETTERHEAD OF KUTAK ROCK LLP]
2013
Barclays Capital Inc.
745 Seventh Avenue
New York, New York 10019
s15,000,000
Sweetwater County, Wyoming
Pollution Control Revenue Bonds
(PacifiCorp Project)
Series 1984
Ladies and Gentlemen:
$5,300,000
Converse County, Wyoming
Environmental Improvement Revenue Bonds
(PacifiCorp Project)
Series 1995
This letter is being delivered to you in conjunction with the Remarketing Agreement
dated May 22,2013 (the "Remarketing Agreement") between PacifiCorp (the "Company") and
Barclays Capital Inc. (the "Remarketing Agent") relating to the conversion and remarketing on
the date hereof of the above-captioned two issues of Bonds (collectively, the "Bonds"). The
terms defined in the Remarketing Agreement are used in this letter with the meanings assigned to
them in the Remarketing Agreement.
In our capacity as counsel to the Remarketing Agent, we have participated with you and
other parties in the preparation of the Reoffering Circular (the "Reoffering Circular") used in
connection with the remarketing of the Bonds. In the course of such participation, we have
reviewed information furnished to us by, and have participated in conferences with,
representatives of the Company, its counsel, representatives of Chapman and Cutler LLP, Bond
Counsel, and representatives of Barclays Capital Inc., as Remarketing Agent of the Bonds. We
have also reviewed the documents, notices, certificates and opinions delivered to the
Remarketing Agent pursuant to the Remarketing Agreement, other documents and records
relating to the conversion and remarketing of the Bonds and certain other documents of the
Company. In addition, we have relied upon, and have assumed the correctness of, certificates of
officials of the Company and the Trustee. However, we have not independently investigated or
verified the accuracy, completeness or faimess of any of the statements included in the
Reoffering Circular.
Based solely on the foregoing, we advise you that, although we have made no
independent investigation or verification of the accuracy, faimess or completeness of, and do not
pass upon or assume any responsibility for, the statements included in the Reoffering Circular,
during the course of the activities described in the preceding paragraph no information came to
the attention of the attomeys in our firm rendering legal services in connection with the
conversion and remarketing of the Bonds which causes us to believe that the Reoffering Circular
4812-9073-8707.6
Barclays 2013 RemAgmt
B-2
(except for the financial statements, financial, statistical and numerical information, forecasts,
estimates, assumptions and expressions of opinion included therein and except for the
information contained in the Reoffering Circular under the captions "THE BONDS-
Book-Entry System" and "THE FIRST MORTGAGE BONDS", and in Appendices B or C, as to
which we express no view), as of the date of this letter, contains any untrue statement of a
material fact or omits to state any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
This letter is issued to and for the sole benefit ofthe above addressee and is issued for the
sole purpose of the transaction specifically referred to herein. No person other than the above
addressee may rely upon this letter without our express prior written consent. This letter may not
be utilized by you for any other purpose whatsoever and may not be quoted by you without our
express prior written consent. We assume no obligation to review or supplement this letter
subsequent to its date, whether by reason of a change in the current laws, by legislative or
regulatory action, byjudicial decision or for any other reason.
Very truly yours,
4812-9073-8707.6
Barclays 2013 RemAgmt
B-3
REMARI(ETING AGREEMENT
Dated May 22,2013
$8,500,000 $22,000,000
City of Forsyth, Rosebud County, Montana Lincoln County, Wyoming
Flexible Rate Demand Pollution Control Environmental Improvement Revenue Bonds
Revenue Bonds
(Pacifi Corp Colstrip Proj ect)
Series 1986
(PacifiCorp Project)
Series 1995
PacifiCorp
Suite 1900
825 NE Multnomah
Portland, OR 97232
To the Addressee:
This is to confirm the agreement between Morgan Stanley & Co. LLC and PacifiCorp, an
Oregon corporation (the "Company"), for Morgan Stanley & Co. LLC to act as exclusive
remarketing agent (the "Remarketing Agent") in connection with the offering and sale of the
Bonds from time to time in the secondary market. The Bonds consist of $8,500,000 in aggregate
principal amount of City of Forsyth, Rosebud County, Montana Flexible Rate Demand Pollution
Control Revenue Bonds (PacifiCorp Colstrip Project), Series 1986 (the "Forsyth Bonds") and
$22,000,000 in aggregate principal amount of Lincoln County, Wyoming Environmental
Improvement Revenue Bonds (PacifiCorp Project), Series 1995 (the "Lincoln Bonds" and,
collectively with the Forsyth Bonds, the "Bonds"). Lincoln County, Wyoming ("Lincoln
County") and the City of Forsyth, Rosebud County, Montana (the "City of Forsyth)" are
collectively referred to herein as the "Issuer."
The Forsyth Bonds will be remarketed under and are secured by a Trust Indenture, dated
as of December l, 1986, as amended and restated as of June 1,2003 (the "Forsyth Indenture"),
between the City of Forsyth and The Bank of New York Mellon Trust Company, N.A., as
successor trustee (in its capacity as trustee under the Forsyth Indenture, the "Forsyth Trustee").
The Lincoln Bonds will be remarketed under and are secured by a Trust Indenture, dated as of
November l, 1995, as amended and restated as of June 1,2003 (the "Lincoln Indenture," and
collectively with the Forsyth Indenture, the "Bond Indenture"), between Lincoln County and The
Bank of New York Mellon Trust Company, N.A., as successor trustee (in its capacity as trustee
under the Lincoln Indenture, the "Lincoln Trustee" and, collectively with the Forsyth Trustee,
the "Bond Trustee"). The City of Forsyth loaned the proceeds of the Forsyth Bonds to the
Company under a Loan Agteement, dated as of December 1, 1986, as amended and restated as of
June l, 2003 (the "Forsyth Loan Agreement"), between the City of Forsyth and the Company in
order to finance certain qualifying air and water pollution control facilities (the "Forsyth Bonds
Project"). Lincoln County loaned the proceeds of the Lincoln Bonds to the Company under a
Loan Agreement dated as of November l, 1995, as amended and restated as of June l, 2003 (the
"Lincoln Loan Agreement" and, collectively with the Forsyth Loan Agreement, the "Loan
4822-8852-66t1.4
Morgan Starley RemAgmt
Agreement"), between Lincoln County and the Company in order to finance certain qualifying
air and water pollution control facilities (the "Lincoln Bonds Project" and, collectively with the
Forsyth Bonds Project, the "Projects"). To evidence its obligation to repay such loans, the
Company executed and delivered to the Forsyth Trustee its First Mortgage and Collateral Bonds,
Second 2003 Series (the "Forslth First Mortgage Bonds") in a principal amount equal to the
principal amount of the Forsyth Bonds, and executed and delivered to the Lincoln Trustee its
First Mortgage and Collateral Bonds, Sixth 2003 Series (the "Lincoln First Mortgage Bonds"
and, collectively with the Forsyth First Mortgage Bonds, the "First Mortgage Bonds") in a
principal amount equal to the principal amount of the Lincoln Bonds. The First Mortgage Bonds
were issued under the Mortgage and Deed of Trust, dated as of January 9, 1989, between the
Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (in
such capacity, the "Mortgage Trustee"), as supplemented and amended from time to time,
including as supplemented by the Fifteenth Supplemental Indenture, dated as of June 1,2003
(the "Fifteenth Supplemental Indenture"), all collectively referred to as the "Company
Mortgage."
The Bonds are being remarketed hereunder following the mandatory purchase of the
Bonds from the Holders thereof in connection with the adjustment of the interest rate period for
the Bonds, as described herein, on June 3,2013 (hereinafter referred to as the "Closing Date").
Each issue of the Bonds is entirely separate from the other issue of the Bonds, and the
dates and responsibilities of the Remarketing Agent under this Remarketing Agreement, unless
otherwise stated, apply separately to each individual issue of the Bonds. This Remarketing
Agreement does not relate to any issue of bonds described by the Reoffering Circular other than
the Bonds.
The Bonds are more fully described in the Reoffering Circular dated May 22, 2013
(which, together with the appendices attached thereto, is referred to herein as the "Reoffering
Circular"), as such may be amended or supplemented.
All capitalized terms used but not defined herein shall have the meanings ascribed to
them in the Reoffering Circular.
l. Appointment of Remarketing Agent; Responsibilities of Remarketing Agent.
(a) Subject to the terms and conditions herein contained, the Company hereby
appoints the Remarketing Agent as exclusive remarketing agent for the Bonds pursuant to
the Bond Indenture, and the Remarketing Agent hereby accepts such appointment, in
connection with (i) the remarketing of the Bonds in connection with the adjustment of the
interest rate period for the Bonds on the Closing Date (the "Initial Remarketing") and
(ii) the offering and sale of the Bonds from time to time in the secondary market
subsequent to the Closing Date. The Company agrees with the Remarketing Agent that
unless this Remarketing Agreement has been previously terminated pursuant to the terms
hereot the Remarketing Agent shall act as exclusive remarketing agent with respect to
the Bonds on the terms and conditions herein contained at all times, including any
remarketing of the Bonds in connection with or in anticipation of the establishment of a
Term Interest Rate Period extending to the final maturity of the Bonds.
4822-8852-6611 4
Morgan Sanley RemAgmt
(b) The Remarketing Agent agrees to determine the rate of interest for the
Bonds during each Rate Period as provided in Section 2.02 of the Bond Indenture. The
Remarketing Agent agrees to fumish to the Bond Trustee the information with respect to
each rate ofinterest required by Section 2.02 ofthe Bond lndenture.
(c) Upon the terms and conditions and in reliance on the representations and
warranties and covenants set forth herein, the Remarketing Agent shall exercise best
efforts to remarket the Bonds in the lnitial Remarketing at a price equal to par plus
accrued interest, if any, subject in all respects to the terms and conditions of the Bond
Indenture and Section 5 hereof. By noon, New York, New York time, on the Closing
Date, the Remarketing Agent shall cause the remarketing proceeds of the Initial
Remarketing to be delivered to the Bond Trustee.
(d) After the Initial Remarketing, in its capacity as Remarketing Agent, upon
notice from (i) a Bondholder or the Bond Trustee that it has received notice from a
Bondholder pursuant to Section 3.01(a), (b) or (c) of the Bond Indenture or (ii) the Bond
Trustee of a mandatory tender for purchase pursuant to Section 3.02(a)(i), (ii) or (iii) of
the Bond Indenture, in each case given pursuant to and in accordance with the Bond
Indenture, the Remarketing Agent shall offer for sale and use its best efforts to remarket
any Bonds that are the subject of any such notice at a price of 100% of the principal
amount thereof plus accrued interest, if any, subject in all respects to the terms and
conditions of the Bond Indenture.
In accordance with the provisions of Section 3.06 of the Bond Indenture, the
Remarketing Agent shall give the Bond Trustee notice in writing not later than
ll:30a.m., NewYork, NewYork time, on any day on which Bonds are delivered or
deemed delivered forpurchase under Section3.0l or 3.02 of the Bond Indenture, of the
aggregate principal amount of Bonds remarketed on such date but for which the purchase
price has not been paid (which Bonds for purposes of the Bond Indenture shall be
considered to not be remarketed). By I 1:45 a.m., New York, New York time, on any day
on which Bonds are delivered or deemed delivered for purchase under Section 3.01 or
3.02 of the Bond Indenture, the Remarketing Agent shall (i) cause the remarketing
proceeds of the Bonds to be delivered to the Bond Trustee, and (ii) give notice by
facsimile transmission, telephone, telecopy, e-mail or other similar electronic means,
promptly confirmed by a written notice, to the Company and the Bond Trustee on each
date on which Bonds shall have been purchased pursuant to the Bond Indenture,
specifying the principal amount of Bonds sold by the Remarketing Agent and the name,
address and taxpayer identification number ofeach such purchaser, the principal amount
of Bonds to be purchased and the denominations in which such Bonds are to be delivered.
All transfen of Bonds and information related thereto shall comply with all Securities
Depository requirements as long as Bonds are in book-entry form.
(e) The Company and the Remarketing Agent agree that the responsibilities of
the Remarketing Agent hereunder will include: (i) the Initial Remarketing of the Bonds
pursuant to Section 1(c) hereof; (ii)the soliciting of purchases of Bonds from investors
that customarily purchase tax-exempt securities in large denominations, provided,
however, that with respect to Bonds being purchased in connection with the
4822-8852-6611.4
Morgan Stanley RemAgmt
establishment of a Term Interest Rate (as defined in the Bond Indenture) the Remarketing
Agent need not be restricted to investors able to purchase tax-exempt securities in large
denominations; (iii) effecting and processing such purchases; (iv) billing and receiving
payment for Bonds purchased; (v) causing the proceeds from the secondary sale ofthe
Bonds to be transferred to the Bond Trustee pursuant to the Bond Indenture; and
(vi) performing such other related functions as may be reasonably requested by the
Company and agreed to by the Remarketing Agent. The Remarketing Agent will keep
records of trades and make trade confirmations in accordance with prudent industry
practices.
(0 The Company acknowledges and agrees that: (i) the transaction
contemplated by this Remarketing Agreement and the Reoffering Circular (the
"Transaction") is an arm's length, commercial transaction between the Company and the
Remarketing Agent in which the Remarketing Agent is acting solely as a principal and is
not acting as a "municipal advisor," "financial advisor" or "fiduciary" to the Company or
the Issuer within the meaning of the Dodd-Frank Wall Street Reform and Consumer
Protection Act and Section 15B of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); (ii) the Remarketing Agent has not assumed any advisory or fiduciary
responsibility to the Company or the Issuer with respect to the Transaction and the
discussions, undertakings and procedures leading thereto (irrespective of whether any
affiliated entities have provided other services or are currently providing other services to
the Company on other matters; (iii) the only obligations the Remarketing Agent has to the
Company or the Issuer with respect to the Transaction expressly are set forth in this
Remarketing Agreement; and (iv) the Company has consulted its own legal, accounting,
tax, financial and other advisors, as applicable, to the extent it has deemed appropriate.
(g) The Company agrees, at the Company's expense, to take all steps
reasonably requested by the Remarketing Agent to enable the Remarketing Agent to
comply with the requirements, if any, of Rule 15c2-12, as promulgated and amended
from time to time by the Securities and Exchange Commission under the Exchange Act
("Rule l5c2-12") and as applicable to the Bonds.
(h) The Company hereby acknowledges that in conjunction with the
Remarketing Agent's obligations under MSRB Rule G-34(c), the Remarketing Agent
will deliver to the Municipal Securities Rulemaking Board the Indenture, the Loan
Agreement and any other documents (including any executed amendments, renewals,
supplements or replacements to the aforementioned) (all such documents, "Rule G-34
Documents") that establish an obligation to provide liquidity with respect to the Bonds or
that set forth or define critical aspects of the liquidity facility for the Bonds, and
covenants to provide the Remarketing Agent with PDF word-searchable copies of the
execution versions of such Rule G-34 Documents not later than the Closing Date and, in
the event of any amendment, renewal, supplement or replacement, on or prior to the
respective effective date thereof, to permit the filing of such Rule G-34 Documents in
compliance with MSRB Rule G-34(c). If the Company determines that redaction of
information in any Rule G-34 Document is required to maintain the confidentiality or
proprietary nature of such information (such information to include, but not be limited to,
fees, staff names and contact information, and bank routing or account numbers), the
4822-8852-66|.4
Morgan Stanley RemAgmt
Company shall identify such information to the Remarketing Agent in writing and
request the Remarketing Agent accept delivery of the applicable documents with such
redactions. The Remarketing Agent agrees to comply with any such request to the extent
permitted by Rule G-3a(c) and such other applicable rules and regulations. The
Company further agrees to hold the Remarketing Agent harmless with respect to, and that
the Remarketing Agent shall have no responsibility with respect to, identifying and/or
redacting any confi dential information.
(i) In connection with the performance of its duties hereunder, the
Remarketing Agent agrees to keep such books and records with respect to the
remarketing of the Bonds as shall be consistent with prudent industry practice and to
make such books and records with respect to the remarketing of the Bonds available for
inspection by the Issuer, the Bond Trustee and the Company at all reasonable times.
0) The Remarketing Agent agrees that, so long as it is the Remarketing
Agent under this Remarketing Agreement, it will perform the obligations contemplated to
be performed by the Remarketing Agent under the Bond Indenture.
2. The Bonds. The Forsyth Bonds were initially issued on December 12,1984, and
the Lincoln Bonds were originally issued on November 17, 1995, and currently bear interest at a
Term Interest Rate. On June 3,2013, it is expected that the interest rate period on the Bonds will
be converted to the Weekly Interest Rate Period.
3. Furnishing of Offering Materials.
(a) The Company agrees to furnish, or cause to be fumished, the Remarketing
Agent with as many copies as the Remarketing Agent may reasonably request of the final
Reoffering Circular, as the same may be supplemented or amended from time to time,
and such other information with respect to the Company or the Bonds as the Remarketing
Agent shall reasonably request from time to time.
(b) If, at any time during the term of this Remarketing Agreement, any event
or condition known to the Company relating to or affecting the Company, the Issuer or
the Project, or the Loan Agreement, the First Mortgage Bonds, the Company Mortgage,
the Bonds, the Bond Indenture or the documents or transactions contemplated thereby,
shall occur which in the reasonable judgment of the Company might affect the
correctness or completeness of any statement of a material fact contained in the
Reoffering Circular, as it shall have been supplemented or amended with the information
fumished from time to time pursuant to this Section 3, or which in the reasonable
judgment of the Company might result in the Reoffering Circular, as so supplemented or
amended, containing any untrue, incorrect or misleading statement of a material fact or
omitting to state a material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading, (i) the
Company will promptly notiff the Remarketing Agent of the circumstances and details of
such event, and (ii) if, in the opinion of the Remarketing Agent or the Company, such
event or condition requires the preparation and publication of an amendment or
supplement to the Reoffering Circular, the Company, at its expense, will promptly
4zzz-s8sz-66'.4 5
Morgan Stanley RemAgmt
prepare or cause to be prepared an appropriate amendment or supplement thereto so that
the statements in the Reoffering Circular as so amended or supplemented will not contain
any untrue, incorrect or misleading statement of a material fact or omit to state a material
fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, in a form and manner
approved by the Remarketing Agent and the Company.
(c) After the Initial Remarketing in connection with the remarketing of the
Bonds as a result of or in anticipation of (i) the issuance of a Letter of Credit or any
Altemate Credit Facility, or (ii) the establishment of a Daily Interest Rate Period,
Flexible Interest Rate Period or Term Interest Rate Period, the Company shall prepare or
cause to be prepared any disclosure documents (including continuing disclosure
undertakings required by the rules and regulations of the Securities and Exchange
Commission) that in the reasonable opinion of the Remarketing Agent or the Company
are necessary or desirable. All costs incurred in connection with the preparation of such
disclosure documents shall be borne by the Company.
4. Representations, Warranties, Covenants and Agreements of the Company.
The Company represents, warrants, covenants and agrees that:
(a) As of the date hereof and at all times subsequent thereto during the period
up to and including the Closing Date, the Reoffering Circular did not and does not
include any untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties in this Section 4 shall not
apply to (i) information contained in or omitted from the Reoffering Circular or any
amendment or supplement thereto in reliance upon information fumished to the Company
in writing by or on behalf of the Issuer or the Remarketing Agent expressly for use in
connection with the preparation thereof or (ii) information presented under the heading
"THE ISSUERS" or *REMARKETING" in the Reoffering Circular. The Company
authorizes the Reoffering Circular to be used by the Remarketing Agent in connection
with the Initial Remarketing and with the offering and sale from time to time of the
Bonds in the secondary market.
(b) The Loan Agreement, the First Mortgage Bonds, the Company Mortgage
and this Remarketing Agreement have been, or will be when entered into (as applicable),
duly authorized and constitute, or will constitute when entered into (as applicable), the
legal, valid and binding obligations of the Company enforceable in accordance with their
respective terms; provided, however, that (i) the rights and remedies set forth in or under
the Loan Agreement, the First Mortgage Bonds, the Company Mortgage and this
Remarketing Agreement may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws from time to time in effect affecting the
enforcement of creditors' rights generally, (ii) the rights and remedies set forth in or
under the Loan Agreement, the First Mortgage Bonds, the Company Mortgage and this
Remarketing Agreement may be limited by other applicable state and federal laws and
legal and equitable principles but, in the Company's opinion, the Loan Agreement, the
4822-88s2-66t.4
Morgan Stanley RemAgmt
First Mortgage Bonds, the Company Mortgage and this Remarketing Agreement provide
remedies currently enforceable under the laws of the State of Montana (in the case of the
Forsyth Bonds) and the State of Wyoming (in the case of the Lincoln Bonds; hereinafter,
"State" refers to the State of Montana or the State of Wyoming as applicable) sufficient
to permit the security interest under the Company Mortgage to be enforced, and the
availability of the remedy of specific performance or of injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought, (iii) no
representation, warranty or covenant is made that any waiver by the Company of its right
to insist upon or plead, or in any matter whatever claim, or take the benefit or advantage
of, any appraisement, valuation, stay, extension or redemption laws now or hereafter in
force in any locality where any of the property pledged under the Company Mortgage
may be situated is valid or enforceable, and (iv) no representation, warranty or covenant
is made as to the legality, validity or enforceability of the provisions of the Loan
Agreement, the First Mortgage Bonds, the Company Mortgage or this Remarketing
Agreement which purport to empower the holder thereof to exercise its rights thereunder
without notice to the Company or without a prior judicial hearing.
(c) Performance by the Company under the Loan Agreement, the First
Mortgage Bonds, the Company Mortgage and this Remarketing Agreement does not and
will not violate or conflict with, or result in a breach or violation of, any constitutional
provision or statute of the State or the United States of Americ4 or any indenture,
mortgage, deed of trust, resolution, note agreement or other agreement or instrument to
which the Company is a party or by which the Company is bound or, to its knowledge,
any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its activities or properties.
(d) The Company has been duly incorporated and is now validly existing and
in good standing as a corporation incorporated under the laws of the State of Oregon; the
Company is duly authorized to transact business as a foreign corporation in the State and
is in good standing as a foreign corporation in the State.
(e) There is no action, suit, proceeding, inquiry or investigation, at law or in
equity, or before or by any court, public board or body, other than as described in the
Reoffering Circular, known to the Company to be pending or threatened against or
affecting the Company, nor to the best of the knowledge of the Company is there any
meritorious basis therefor, wherein an unfavorable decision, ruling or finding would
reasonably be expected to materially adversely affect the transactions contemplated by
this Remarketing Agreement or by the Reoffering Circular or which, in any way, would
reasonably be expected to adversely affect the validity or enforceability ofthe Bonds, the
Bond Indenture, the Loan Agreement, the First Mortgage Bonds, the Company Mongage
or this Remarketing Agreement.
(0 All consents of govemmental authorities required in connection with the
execution and delivery by the Company of the Loan Agreement, the First Mortgage
Bonds, the Company Mortgage and this Remarketing Agreement, and the issuance and
sale of the Bonds have been obtained; provided, however, that no representation is made
4822-8852-661.4
Morgan Stanley RemAgml
concerning compliance with the federal securities laws or the securities or "Blue Sky"
laws of the various states.
(g) All licenses, permits, consents, approvals, authorizations and orders of
governmental or regulatory authorities ("authorizations") as are necessary for the
Company to own its properties and conduct its business in the manner described in the
Reoffering Circular have been obtained, and the Company has fulfilled and performed all
of its material obligations with respect to such authorizations, and no event has occurred
that permits, or after notice or lapse of time or both would permit, revocation or
termination thereof or result in any other material impairment of the rights of the holder
of such authorizations.
(h) The Company will diligently cooperate with the Remarketing Agent to
qualiff the Bonds and/or the related obligations of the Company for offer and sale under
the securities or "Blue Sky" laws of such states as the Remarketing Agent may request,
provided that in no event shall the Company be obligated to qualiff to do business in any
state where it is not now so qualified or to take any action which would subject it to
general service of process in any state where it is not now so subject. It is understood
that the Company is not responsible for compliance with or the consequences of failure to
comply with such securities or "Blue Sky" laws.
(i) The Company is not and, except as disclosed in the Reoffering Circular,
has not been in default under Rule 15c2-12.
0) The Company is not and never has been in default as to the payment of' principal or interest with respect to the Bonds.
(k) The Company will not take or omit to take any action which action or
omission will adversely affect the exclusion from gross income for federal income tax
purposes of the interest on the Bonds.
5. Conditions to Remarketing Agent's Obligations. The obligations of the
Remarketing Agent under this Remarketing Agreement have been undertaken in reliance on, and
shall be subject to, the due performance by the Company of the obligations and agreements to be
performed by the Company hereunder.
(a) The obligations of the Remarketing Agent hereunder with respect to the
Initial Remarketing are also subject, in the discretion of the Remarketing Agent, to the
following further conditions :
(i) The Bond Indenture, the Loan Agreement, the First Moftgage
Bonds and the Company Mortgage shall be in full force and effect and shall not
have been amended, modified or supplemented in any way which would
materially and adversely affect the Bonds, except as may have been agreed to in
writing by the Remarketing Agent.
(ii) No "Event of Default" (as defined in the Bond Indenture, the Loan
Agreement or the Company Mortgage) shall have occurred and be continuing and
4,zz-B8sz-6611.4 8
Morgan Stanley RemAgmt
no event shall have occurred and be continuing which, with the passage of time or
giving of notice, or both, would constitute such an Event of Default under the
Bond Indenture, the Loan Agreement or the Company Mortgage.
(iii) The marketability of the Bonds or their market price must not be,
in the reasonable opinion of the Remarketing Agent, materially adversely affected
by (A) an amendment to or proposal to amend the Constitution of the State or of
the United States or by any federal or State legislation or proposed legislation or
by any decision of any court of the United States or by any ruling or regulation
(final, temporary or proposed) on behalf of the Treasury Department of the
United States, the Intemal Revenue Service or any other authority of the
United States, the State (including any Executive Order or Proclamation of the
Governor thereof), or any comparable legislative, judicial or administrative
development affecting the federal tax status of any of the Issuer, its property or
income, or the interest on its bonds (including the Bonds); (B) an outbreak or
escalation of hostilities or other calamity or crisis; (C) a general suspension of or
material limitation on trading on the New York Stock Exchange or other national
securities exchange, the establishment of minimum prices on any such exchange
or the declaration of a general banking moratorium by State authorities or by
federal or New York authorities; (D) a downgrading or withdrawal by a national
rating service of a rating of the Bonds or any class of the Company's securities or,
with respect to the Company's securities, a public announcement by such a
service that it is considering such a downgrading or withdrawal (excluding any
such announcement existing as of the date hereof;; (E) an amendment or
supplement to the Reoffering Circular; (F) the establishment of any new
restrictions on transactions in securities materially affecting the free market for
the securities (including the imposition of any limitations on interest rates) or the
extension of credit by, or the charge to the net capital requirements of,
underwriters established by any such exchange, the Securities and Exchange
Commission, any other federal or state agency or the United States Congress or
by Executive Order; or (G) a material adverse change in the general affairs or in
the financial position or net assets of the Company as a whole, except as disclosed
by or contemplated in the Reoffering Circular.
(iv) No decision of any federal or state court and no ruling of the
Securities and Exchange Commission or any other governmental agency has been
made or issued to the effect that (A) the Bonds or any other securities of the Issuer
or of any similar body of the type contemplated in this Remarketing Agreement,
the obligations of the Company under the Loan Agreement, the exercise of tender
rights by the Holders of the Bonds or the remarketing of the Bonds by the
Remarketing Agent as contemplated by the Bond Indenture and this Remarketing
Agreement are subject to registration requirements of the Securities Act of 1933,
as amended (the "Securities Act"), or (B) the qualification of an indenture in
respect of the Bonds or any such securities is required under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act").
4822-8852-6611.4
Morgan Stanley RemAgml
(v) On or before the Closing Date, the Remarketing Agent must
receive the following documents, each reasonably satisfactory in form and
substance to the Remarketing Agent and to its counsel:
(A) A copy of the Reoffering Circular.
(B) A certificate, dated the Closing Date, of duly authorized
officers of the Company as follows:
(l) Certiffing that, as of the Closing Date, the
representations and warranties contained in Section 4 of this
Remarketing Agreement are true and correct and that the Company
has complied with all its agreements therein contained;
(2) Certifuing that there has been no material adverse
change in the general affairs or in the financial position or net
assets of the Company as a whole, as shown in the Reoffering
Circular, other than changes disclosed by or contemplated in the
Reoffering Circular or in an amendment or supplement thereto;
and
(3) Stating that they have examined the Reoffering
Circular and that, to the best of their knowledge after reasonable
inquiry, the Reoffering Circular did not as of its date and does not
as of the Closing Date contain any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(C) Opinions, dated the Closing Date and addressed to the
Remarketing Agent, of (1) Paul J. Leighton, Esq., counsel to the
Company, substantially in the form attached hereto as Exhibit A;
(2) Chapman and Cutler LLP, Bond Counsel, in the form attached as
Appendices C-1 and C-3 to the Reoffering Circular; and (3) Counsel to the
Remarketing Agent, substantially in the form attached hereto as Exhibit B,
in each case with such changes as shall be requested by such counsel and
approved by the Remarketing Agent, which approval shall not be
unreasonably withheld.
(D) A letter, dated the Closing Date, of Chapman and Cutler
LLP, Bond Counsel, to the effect that (l) the statements contained in the
Reoffering Circular under the captions *THE BONDS" (other than
information relating to the book-entry system of registration for the
Bonds), *THE LOAN AGREEMENTS" and "THE INDENTURES" and
in Appendices B and C insofar as such statements constitute summaries of
the Bonds, the Loan Agreement and the Bond Indenture, or the opinions of
Bond Counsel constitute fair summaries of the portions of such documents
4822-88s2-66n.4
Morgan Stanley RemAgml
l0
purported to be summartzed or the opinions of Bond Counsel; and (2) the
statements in the Reoffering Circular under the caption "TAX
EXEMPTION" are accurate statements or summaries of the matters
summarized therein.
(E) Evidence satisfactory to the Remarketing Agent that on the
Closing Date there will be in effect ratings on the Bonds from Standard
& Poor's Rating Services, a division of The McGraw-Hill Companies,
Inc., of "A/A-2" and from Moody's Investors Service,Inc. of "MlP-2."
(F) Executed copies ofthe Bond Indenture.
(G) Executed copies ofthe Loan Agreement.
(H) Such additional opinions, certificates or documents as the
Remarketing Agent or its counsel may reasonably request.
(b) The obligations of the Remarketing Agent hereunder with respect to each
date on which the Bonds are to be offered and sold in the secondary market pursuant to
this Remarketing Agreement are also subject, in the discretion of the Remarketing Agent,
to the following further conditions:
(i) The Bond Indenture, the Loan Agreement, the First Mortgage
Bonds, and the Company Mortgage shall be in full force and effect and shall not
have been amended, modified or supplemented in any way which would
materially and adversely affect the Bonds, except as may have been agreed to in
writing by the Remarketing Agent, and there shall be in full force and effect such
additional resolutions, agreements, certificates (including such certificates as may
be required in order to establish the exclusion ofinterest on the Bonds from gross
income for federal, state and local income tax purposes) and opinions as shall be
necessary to effect the transactions contemplated hereby, which resolutions,
agreements, certificates and opinions shall be reasonably required by, and
satisfactory in form and substance to, Bond Counsel and Counsel to the
Remarketing Agent; and
(ii) There shall be no material adverse change in the properties or
condition (financial or otherwise) of the Company since the date of the Reoffering
Circular relating to the Bonds being offered and sold on such date, as such
Reoffering Circular may be amended or supplemented; no "Event of Default" (as
defined in the Bond Indenture, the Loan Agreement or the Company Mortgage)
shall have occurred and be continuing and no event shall have occurred and be
continuing which, with the passage of time or giving of notice or bottr, would
constitute such an Event of Default under the Bond Indenture, the Loan
Agreement or the Company Mortgage; and no event shall have occurred which,
independent of the fact that such event with the giving of notice or passage of
time or both would be an Event of Default under the Bond Indenture, the Loan
ll
4822-8852-661 1 .4
Morgan Sanley RemAgmt
Agreement or the Company Mortgage, would have a materially adverse effect on
the properties or condition (financial or otherwise) of the Company.
Subject to Section 10.20 of the Bond Indenture, if the Company is unable to
satisfu any such condition, or if the Remarketing Agent's obligations are terminated for
any reason permiued by this Remarketing Agreement, the Remarketing Agent may
immediately cancel this Remarketing Agreement and, if it does, the Remarketing Agent
will not be under further obligation under this Remarketing Agreement or the Bond
Indenture, and the Remarketing Agent shall be deemed to have resigned as Remarketing
Agent under the Bond Indenture.
6. Term and Termination of Remarketing Agreement.
(a) This Remarketing Agreement shall become effective upon execution by
the Remarketing Agent and the Company, and, subject to the terms and conditions
hereof, shall continue in full force and effect with respect to the Bonds until the
establishment of a Term Interest Rate Period extending to the final maturity of the Bonds.
(b) The Remarketing Agent may cancel this Remarketing Agreement at any
time by written notice to the Bond Trustee and the Company if, between the date hereof
and the Closing Date, an event specified in clause (a)(i), (a)(ii), (aXiii) or (a)(iv) of
Section 5 shall have occurred. If this Remarketing Agreement is cancelled by the
Remarketing Agent due to an event specified in clause (a)(i), (aXii), (a)(iii) or (a)(iv) of
Section 5 or the Company's failure to satisfu any condition set forth in clause (a)(v) of
Section 5, the Company shall not be obligated to pay the amount specified in clause (a)(i)
of Section 7 but the Company shall be responsible for the out-of-pocket expenses of the
Remarketing Agreement specified in clause (a)(ii) of Section 7.
(c) Following the Initial Remarketing in accordance with the provisions of
Section 10.20 of the Bond Indenture, (i)the Remarketing Agent may at any time resign,
without a successor in place, by giving at least 30 days' prior written notice to the Issuer,
the Company, the Registrar and the Bond Trustee, and (ii) the Remarketing Agent may be
removed at any time at the direction of the Company by a written instrument filed with
the Remarketing Agent, the Registrar and the Bond Trustee at least 30 days prior to the
effective date of such removal.
(d) In addition to the provisions of paragraph (c) of this Section, after the
lnitial Remarketing, the Remarketing Agent may suspend its obligations under this
Remarketing Agreement at any time by notifying the Issuer, the Company and the Bond
Trustee in writing or by telegram or other electronic communication of its election so to
do, if:
(i) Legislation shall have been introduced in or enacted by the
Congress of the United States of America or adopted by either House thereof, or
legislation pending in the Congress of the United States of America shall have
been amended, or legislation shall have been recommended for passage (by press
release, other form of notice or otherwise) by the President of the United States of
4822-8852-6611 .4
Morgan Stanley RemAgmt
t2
America, the Treasury Department of the United States of America, the lnternal
Revenue Service or Chairman or ranking minority member of the U.S. Senate
Committee on Finance or the U.S. House of Representatives Committee on Ways
and Means or legislation shall have been proposed for consideration by either
such Committee by any member thereof or legislation shall have been favorably
reported for passage to either House of the Congress of the United States of
America by a Committee of such House to which legislation has been referred for
consideration, or a decision by a court established under Article III of the
Constitution of the United States of America shall be rendered or a ruling,
regulation or official statement by or on behalf of the Treasury Department of the
United States of America, the Intemal Revenue Service or other govemmental
agency shall be made, with respect to federal taxation of revenues or with respect
to other income of the general character expected to be derived under the Bond
Indenture by the Issuer or upon interest received on securities of the general
character of the Bonds or which would have the effect of changing, directly or
indirectly, the federal income tax consequences of receipt of interest on securities
of the general character of the Bonds in the hands of the owners thereof which in
the reasonable opinion of the Remarketing Agent would materially adversely
affect the marketability of the Bonds;
(ii) Legislation shall be introduced by committee, by amendment or
otherwise, in, or be enacted by, the House of Representatives or the Senate of the
Congress of the United States of America, or a decision by a court of the
United States of America shall be rendered, or a stop order, ruling, regulation or
official statement by, or on behalf of, the United States Securities and Exchange
Commission or other govemmental agency having jurisdiction of the subject
matter shall be made or proposed, to the effect that the offering or sale of
obligations ofthe general character of the Bonds, as contemplated hereby, is or
would be in violation of any provision of the Securities Act, as amended and as
then in effect, or the Exchange Act, as amended and as then in effect, or the Trust
Indenture Act, as amended and as then in effect, or with the purpose or effect of
otherwise prohibiting the offering or sale of obligations of the general character of
the Bonds, or the Bonds, as contemplated hereby;
(iii) Any information shall have become known, which, in the opinion
of the Remarketing Agent, makes untrue, incorrect or misleading in any material
respect any statement or information contained in the Reoffering Circular, as the
information contained therein has been supplemented or amended by other
information furnished in accordance with Section 3 hereof, or causes the
Reoffering Circular, as so supplemented or amended, to contain an untrue,
incorrect or misleading statement of a material fact or to omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading;
(iv) Except as provided in clauses (i) and (ii) hereof any legislation,
resolution, ordinance, rule or regulation shall be introduced in, or be enacted by,
l3
4822-8852-6611.4
Morgan Stanley RemAgmt
any federal govemmental body, department or agency of the United States of
America, the State of New York or the State, or a decision by any court of
competent jurisdiction within the United States of America, the State of
New York or the State shall be rendered which, in the opinion of the Remarketing
Agent, materially adversely affects the marketability of the Bonds;
(v) Additional material restrictions not in force as of the date hereof
shall have been imposed upon trading in securities generally by any governmental
authority purporting to have jurisdiction regarding the trading of the Bonds or by
any national securities exchange;
(vi) Any govemmental authority shall impose, as to the Bonds, or
obligations of the general character of the Bonds, any material restrictions not
now in force, or increase materially those now in force;
(vii) A general banking moratorium shall have been established by State
authorities, or federal or New York authorities;
(viii) Any rating of the Bonds shall have been downgraded or withdrawn
by any securities rating agency, which, in the opinion of the Remarketing Agent,
materially adversely affects the marketability of the Bonds;
(ix) There shall have occurred the outbreak or material escalation or
material reescalation of hostilities involving the United States of America, or the
declaration by the United States of a national emergency or war, which in the
judgment of the Remarketing Agent has had a materially adverse effect on the
marketability of the Bonds on the terms and in the manner contemplated by the
Reoffering Circular; or
(x) An event, including, without limitation, the bankruptcy or default
of any other issuer of or obligor on obligations of the general character of the
Bonds or on tax-exempt commercial paper, shall have occurred which, in the
opinion of the Remarketing Agent, makes the marketability of the Bonds at
interest rates not in excess of the maximum interest rate permitted by Bond
Indenture impossible over an extended period of time.
7. Payment of Fees and Expenses. In consideration of the obligations to be
performed by the Remarketing Agent under this Remarketing Agreement, the Company agrees
to pay the Remarketing Agent the following fees:
(a) on the Closing Date, (i) an amount equal to (such fee being exclusive of
the Remarketing Agent's out-of-pocket funds) $61,000 as consideration for the Initial
Remarketing and (ii) an amount equal to 51,547.22 in connection with the out-of-pocket
expenses of the Remarketing Agent;
(b) an annual fee equal to 0.10% of the weighted average daily principal
amount of Bonds outstanding during such period in which the Bonds shall bear interest at
a Weekly Interest Rate or Flexible Interest Rate (in the event the Bonds are converted to
4Ezz-BB5z-6611.4
14
Morgan Stanley RemAgmt
bear interest at a Daily Interest Rate, the Remarketing Agent and Company will agree on
a fee at that time);
(c) in connection with or in anticipation of the establishment of a Term
Interest Rate Period, an amount as shall be agreed to by the Company and the
Remarketing Agent at that time; and
(d) expenses reasonably incurred by the Remarketing Agent in connection
with its services hereunder, including reasonable expenses in connection with the
preparation of offering materials as provided in Section 3.
Payment of the fees and expenses referred to in clause (b) of the first sentence of this
Section shall be made by the Company as soon as practicable upon receipt of an invoice therefor
from the Remarketing Agent, such invoice to be sent quarterly in arrears on a calendar quarter.
Payment of the fee referred to in clause (c) of the first sentence of this Section shall be made by
the Company on the effective date of the establishment of a Term Interest Rate Period and shall
include all reasonable costs relating to the preparation of any disclosure documents in connection
with the establishment of a Term Interest Rate Period. The Remarketing Agent will not incur the
expenses referred to in clause (d) of the first sentence of this Section without the prior approval
of the Company. The Company agrees to pay the Remarketing Agent's fees and reasonable
expenses under this Remarketing Agreement without regard to any claim, setoff, defense, or
other right that the Company may have at any time against the Remarketing Agent or any other
person, whether in connection with this Remarketing Agreement, the Bonds or any unrelated
transactions.
The Company further agrees to pay the reasonable fees and expenses of Kutak Rock LLP
incurred in its capacity as Counsel to the Remarketing Agent in connection with the Initial
Remarketing.
8. Indemnification and Contribution.
(a) In connection with any remarketing of the Bonds, the Company will
indemnifu and hold harmless the Remarketing Agent and its officers, directors and
employees and each person, if any, who controls any Remarketing Agent within the
meaning of the Securities Act (collectively, the "indemnified parties"), to the extent
permitted under applicable law, against any losses, claims, damages or liabilities, joint or
several, to which the indemnified parties may become subject, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact contained in the
Reoffering Circular, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading or (ii) the representations and warranties set forth
in Section 4 hereof being untrue on the Closing Date; and will reimburse the indemnified
parties for any legal or other expenses reasonably incurred by the indemnified parties in
connection with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company will not be liable in any such case to any
4822-8852-6611.4
Morgan Stanley RemAgmt
l5
indemnified party to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any of such documents, or under the caption *THE ISSUERS" or
'REMARKETING" or in reliance upon and in conformity with written information
fumished to the Company by, with respect to the Issuer, the Issuer, or with respect to the
Remarketing Agent or a controlling person of the Remarketing Agent, the Remarketing
Agent, specifically for use therein; and provided further that the indemnity provision
contained in this subparagraph (a) with respect to the Reoffering Circular or any
amendment or supplement thereto shall not inure to the benefit of the Remarketing Agent
(or to the benefit of any person controlling the Remarketing Agent) with respect to any
such loss, claim, damage, liability or action asserted by any person if a copy of the
Reoffering Circular (as amended or supplemented) not containing the untrue statement or
alleged untrue statement or omission or alleged omission that is the basis of the loss,
claim, damage, liability or action for which indemnification is sought was available to the
Remarketing Agent and was not properly mailed, delivered or given to such person. This
indemnity provision will be in addition to any liability which the Company may
otherwise have.
(b) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemniffing party under this Section 8, notify
the indemniffing party in writing of the commencement thereof; but the omission so to
notiff the indemnifying parry will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 8 except to the extent that the
indemniffing party is able to demonstrate actual prejudice in not being so notified. In
case any such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be entitled
to participate in, and, to the extent that it may wish, jointly with any other indemnifying
party, similarly notified, to assume the defense thereof so long as its interests are not
adverse to those of the indemnified party, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemniffing party to such indemnified party
of its election to assume the defense thereof, the indemnifuing party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. Upon assumption by the indemnifying party of the
defense of any such action or proceeding, the indemnified party shall have the right to
participate in such action or proceeding and to retain its own counsel but the
indemnifying party shall not be liable for any legal expenses of other counsel
subsequently incurred by such indemnified parfy in connection with the defense thereof
unless (i) the indemniffing party has agreed to pay such fees and expenses, (ii) the
indemniffing party shall have failed to employ counsel reasonably satisfactory to the
indemnified party in a timely manner, or (iii) the indemnified party shall have been
advised by counsel that there are actual or potential conflicting interests between the
indemnifliing party and the indemnified party, including situations in which there are one
or more legal defenses available to the indemnified party that are different from or
additional to those available to the indemnifring party. If the indemniffing party does
not elect to assume the defense of any such suit, it will reimburse the indemnified parties
4822-8852-66r.4
16
Morgan Stanley RemAgmt
for the reasonable fees and expenses ofany counsel retained by them. In the event that
the parties to any such action (including impleaded parties) include one or more
indemnifuing parties and one or more indemnified parties, and one or more indemnified
parties shall have been advised by counsel reasonably satisfactory to the Remarketing
Agent and the Company that there may be one or more legal defenses available to any of
the indemnified parties, which are different from, additional to, or in conflict with those
available to any of the indemniffing parties, the indemnifying parties will reimburse the
indemnified parties for the reasonable fees and expenses of any counsel retained by the
indemnified parties (it being understood that the indemnifying parties shall not, in
connection with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attomeys for all
indemnified parties, which firm shall be designated by the indemnified parties, the
Remarketing Agent or the Company, as the case may be). Each indemnifying party
agrees promptly to notifu each indemnified party of the commencement of any litigation
or proceedings against it in connection with the remarketing of the Bonds. The
indemnifuing party shall not consent to the terms of any compromise or settlement of any
action defended by the indemnifying party in accordance with the foregoing without the
prior consent of the indemnified party. No indemnifuing party shall be liable under this
Section 8 for the amount of any compromise or settlement of any action unless such
compromise or settlement has been approved in writing by such indemniffing party,
which approval shall not be unreasonably withheld. The indemnity agreements contained
in this Section 8 shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Remarketing Agent, or the delivery of and any
payment for any Bonds hereunder, and shall survive the termination or cancellation of
this Remarketing Agreement.
(c) If the indemnification provided for in subparagraph (a) of this Section 8 is
unavailable, because of limitations imposed by securities laws or for any other reason, to
a party that would otherwise have been an indemnified party under subparagraph (a)
above in respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each party that would have been an indemnifring party
thereunder shall, in lieu of indemni$ing such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion so that the Remarketing Agent
is responsible for that portion represented by the percentage that the Remarketing Agent's
commission with respect to such remarketing bears to the aggregate principal amount of
such Bonds being remarketed and the Company is responsible for the balance; provided
that the Remarketing Agent's contribution amount shall not exceed the total amount of
the Remarketing Agent's remarketing fees and commissions for the preceding l2-month
period. Furthermore, no person guilty of fraudulent misrepresentation within the
meaning of Section l1(f; of the Securities Act shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation within the meaning of
Section I l(f) of the Securities Act. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subparagraph (c) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating
4szz-B,sz-6611.4
17
Morgan Stanley RemAgmt
or defending any such action or claims (which shall be limited as provided in
subparagraph (b) above if the indemnifying party has assumed the defense of any such
action in accordance with the provisions thereof).
9. Dealing in Bonds by Remarketing Agent. The Remarketing Agent, either as
principal or agent, may in good faith buy, sell, own, hold and deal in any of the Bonds, and may
join in any action which any Bondholder may be entitled to take with like effect as if it did not
act in any capacity hereunder. The Remarketing Agent in its individual capacities, either as
principal or agent, may also engage in or be interested in any financial or other transaction with
the Issuer or the Company, and may act as depositary, trustee, or agent for any committee or
body of Bondholders or other obligations of the Issuer or the Company, as freely as if it did not
act in any capacity hereunder. Under such circumstances, the Remarketing Agent shall have
only those rights set forth in the Bonds.
10. Remarketing Agent Not Acting as Underwriter. The Remarketing Agent shall
be construed to be acting as agent only for and on behalf of the owners from time to time of the
Bonds.
11. Miscellaneous.
(a) Except as otherwise specifically provided in this Remarketing Agreement,
all notices, demands and formal actions under this Remarketing Agreement shall be in
writing and mailed, by registered or certified mail, postage prepaid, retum receipt
requested, telegraphed or delivered, as follows:
The Remarketing Agent:Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
Attention: Municipal Short-Term Products
PacifiCorp
Suite 1900
The Company:
825 NE Multnomah
Portland, OR 97232
Attention: VP and Treasurer
The Bond Trustee for the Bonds: The Bank of New York Mellon
Trust Company, N.A.
suite 1020
2 North LaSalle Street
Chicago,IL 60602
Attention: Global Corporate Trust
4822-88524611 4
Morgan Stanley RemAgmt
18
The Paying Agent for the Bonds:
Lincoln County, Wyoming:
City of Forsyth, Rosebud
County, Montana:
The Bank ofNew York Mellon
Trust Company, N.A.
suite 1020
2 North LaSalle Street
Chicago, IL 60602
Attention: Global Corporate Trust
Lincoln County Courthouse
Suite 302
925 Sage
Kemmerer, WY 83101
Attention: County Clerk or County Attomey
247 North Ninth Avenue
Forsyth, MT 59327
Attention: City Clerk-Treasurer
Each party may, by notice given under this Remarketing Agreement, designate other
addresses to which subsequent notices, requests, reports or other communications shall be
directed.
(b) The obligations of the respective parties hereto may not be assigrred or
delegated to any other person without the consent of the other parties hereto. This
Remarketing Agreement will inure to the benefit of and be binding upon the Company
and the Remarketing Agent and their respective successors and assigns, and will not
confer any rights upon any other person, other than persons, if any, controlling a
Remarketing Agent within the meaning of the Exchange Act and the Company and its
directors and altemate directors or any person who controls the Company within the
meaning of Section l5 of the Securities Act. The terms "successors" and "assigns" shall
not include any purchaser ofany ofthe Bonds merely because ofsuch purchase.
(c) The obligations and liabilities of the Company hereunder are general
obligations of the Company. Neither the directors, officers or employees of the Company
nor any person executing this Remarketing Agreement shall be liable personally on the
obligations of the Company hereunder or be subject to any personal liability or
accountability by reason of the execution hereof. Neither the faith and credit nor the
taxing power of the State or any political subdivision thereof is pledged to the obligations
of the Company hereunder.
(d) All of the representations and warranties of the Company in this
Remarketing Agreement shall remain operative and in full force and effect, regardless of
(i) any investigation made by or on behalf of the Remarketing Agent and (ii) termination
of this Remarketing Agreement.
(e) Section headings have been inserted in this Remarketing Agreement as a
matter of convenience of reference only, and it is agreed that such section headings are
4822-88s2-6611.4
Morgan Stanley RemAgmt
t9
not a part of this Remarketing Agreement and will not be used in the interpretation of any
provisions of this Remarketing Agreement.
(f) If any provision of this Remarketing Agreement shall be held or deemed
to be or shall, in fact be invalid, inoperative or unenforceable as applied in any particular
case in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any
provisions of any constitution, statute, rule of public policy, or any other reason, such
circumstances shall not have the effect of rendering the provision in question invalid,
inoperative or unenforceable in any other case or circumstance, or ofrendering any other
provision or provisions of this Remarketing Agreement invalid, inoperative or
unenforceable to any extent whatsoever.
(g) This Remarketing
each ofwhich shall be regarded
the same document.
Agreement may be executed in several counterparts,
as an original and all of which shall constitute one and
(h) This Remarketing Agreement may not be altered, amended, supplemented
or modified in any manner whatsoever except by written instrument sigrred by the
Company and the Remarketing Agent.
(i) To the fullest extent permitted by law, each of the parties hereto waives
any right it may have to a trial by jury in respect of litigation directly or indirectly arising
out of, under or in connection with this Remarketing Agreement. Each party further
waives any right to consolidate any action in which a jury trial has been waived with any
other action in which a jury trial cannot be or has not been waived.
[Remainder of page intentionally left blank]
4822-8852-6611.4
Morgan Stanley RemAgmt
20
() This Remarketing Agreement shall be govemed by and construd in
accordanse with the laws of the State of New York withour giving effect to the principles
of conflict of laws thereof.
Very truly yours,
MORGA}{ STAI{LEY & CO. LLC, as
Accepted and agreed:
PACIFICORP
By
Bruce N. Williams
Viee President and Treasurer
M).485246u.4
Morgan Stanlcy RcmAgmt
2t
0) This Remarketing Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to the principles
of conflict of laws thereof.
Very tnrly yours,
MORGAN STANLEY & CO. LLC, as
Remarketing Agent
By
Name
TitIC
Accepted and agreed:
PACIFICORP
By"{L-.- ,o tJ-[0*---
Bruce N. Williams
Vice President and Treasurer
4822.8852-fin.4
Morgan Slanley RcmAgmt
2t
EXHIBIT A
OPINION OF COUNSEL TO THE COMPANY
See Attached
4827-8852-6611.4
Morgan Stanley RemAgmt
[LETTERHEAD OF MIDAMERICAN ENERGY]
June .2013
The Bank of New York Mellon Trust Company, N.A., as Successor Trustee
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Morgan Stanley &Co.LLC
1585 Broadway
New York, New York 10036
$8,500,000
City of Forsyth, Rosebud County, Montana
Flexible Rate Demand Pollution Control
Revenue Bonds
(Pacifi Corp Colstrip Proj ect)
Series 1986
Ladies and Gentlemen:
$22,000,000
Lincoln County, Wyoming
Environmental Improvement
Revenue Bonds
(PacifiCorp Project)
Series 1995
I have served as counsel to PacifiCorp (the "Company") in connection with the execution
and delivery by the Company of the Remarketing Agreement dated May 22, 2013 (the
"Remarketing Agreement") between the Company and Morgan Stanley & Co. LLC. (the
"Agent") relating to the abovementioned two issues of bonds (collectively, the "Bonds").
Capitalized terms used herein and not otherwise defined shall have the meanings assigned such
terms in the Reoffering Circular dated May 22,2013 (the "Reoffering Circular") relating to the
Bonds.
I have examined the Reoffering Circular, the Remarketing Agreement, the Company
Mortgage, the Fifteenth Supplemental Indenture and the First Mortgage Bonds (collectively, the
"Company Documents") and the Indenture and the Loan Agreement, and have discussed the
foregoing documents and such other matters with such officials of the Company, as I consider
necessary and appropriate to enable me to express the opinions stated in this letter. I have relied,
to the extent that I deem such reliance proper, upon certificates ofpublic officials and certificates
of officers of the Company with respect to the accuracy of material factual matters contained
therein which were not independently established.
I have assumed, with your consent, for the purposes of the opinions expressed in this
letter, that the Company Documents have been duly authorized, executed and delivered by each
party thereto, other than the Company.
4822-8852-661.4
Morgan Stanley RemAgmt
A-2
Based upon the foregoing, it is my opinion that:
(a) the Company (i) is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Oregon; (ii) has the corporate power and
authority to own its properties and to conduct its business as described in the Reoffering
Circular; and (iii) except as described in the Reoffering Circular, is duly registered or
qualified to do business and is in good standing as a foreign corporation in each
jurisdiction in which such registration, qualification or good standing is required (whether
by reason of the ownership or leasing of property, the conduct of its business or
otherwise), except where the failure to so register or qualifo or be in good standing could
not, in the aggregate, reasonably be expected to have a Materially Adverse Effect;
(b) the Company has corporate power and authority to execute and deliver
each Company Document and to take all actions required or permitted to be taken by the
Company by or under, and to perform its obligations under each Company Document;
(c) the Company has duly taken all necessary corporate action for the
authorization ofi (i) the execution, delivery and performance by the Company of the
Company Documents; (ii) the distribution of the Reoffering Circular; and (iii) the
carrying out, giving effect to, consummation and performance by the Company of the
transactions and obligations contemplated by the Company Documents and the
Reoffering Circular, provided that no opinion is expressed with respect to compliance
with any securities laws;
(d) each Company Document has been duly authorized, executed and
delivered by the Company and constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the enforcement of creditors' rights or contractual
obligations generally or by general principles ofequity orjudicial discretion;
(e) the First Mortgage Bonds continue to be pledged to secure the Company's
loan payment obligation under the Loan Agreement, as amended and restated by the
Supplemental Loan Agreement;
(0 the execution and delivery by the Company of the Company Documents,
the performance by the Company of its obligations thereunder and the consummation by
the Company of the transactions therein contemplated do not and will not contravene the
Third Restated Articles of Incorporation or bylaws of the Company or, to the best of my
knowledge, any rule, order, writ, injunction or decree of any court, federal or state
regulatory body, administrative agency or other governmental body applicable to the
Company, or result in a breach of any of the terms, conditions or provisions of, or
constitute a default under any material mortgage, indenture, agreement or instrument to
which the Company is a party or by which it or any of its properties is bound or, to the
best of my knowledge, result in the creation or imposition of any mortgage, lien, charge
or encumbrance of any nature whatsoever upon any of the properties or assets of the
Company;
4822-8852-6611.4
Morgan Sanley RemAgmt
A-3
(g) on and as of the date hereof, all authorization, consent or approval of,
notices to, registrations or filing with or action in respect of any governmental body,
agency, regulatory authority or other instrumentality or court required to be obtained,
given or taken on behalf of the Company in connection with (i) the remarketing and
public reoffering of the Bonds and (ii) the execution, delivery and performance by the
Company of the Company Documents, other than Order No.83-400, DocketUF3915
issued by the Public Utility Commission of Oregon ("PUCO") on July 15, 1985 and
subsequently supplemented by Orders No. 83-507 on August 16, 1983, 83-786 on
December 6, 1983, 84-077 on February 7, 1984 and 84-960 on December 3, 1984; Order
No.85-1299, DocketW3992 issued by the PUCO on December22, 1986; Order
No. 95-518, Docket UF-4128 issued by the PUCO on May 25, 1995; Order No. 03-135,
DocketUF-4195 issued by the PUCO on February 21,2003; Order No. 18169, Case
No. U-1046-129 issued by the Idaho Public Utilities Commission ("IPUC') on July 8,
1983; Order 20937, Case No. U-1046-159 issued by the IPUC on December 23, 1986;
Order No. 26039, Case No. PAC-S-95-2 issued by the IPUC on May 30, 1995; Order
No.29201, Case No. PAC-E-03-1 issued by the IPUC on February 24, 2003; Order
Granting Application, Cause N. FR-83-133 issued by the Washington Utilities and
Transportation Commission ("WTUC") on July 20,1983 and subsequently supplemented
by the First Supplemental Order on December 8, 1983 and the Second Supplemental
Order on December 10, 1984; Order Granting Application, Cause No. FR-86-152 issued
by the WTUC on December24, 1986; Order Granting Application, DocketUE-950490
issued by the WTUC on May 24, 1995; and Order No. 01, Docket No. UE-030077 issued
by the WTUC on February 28,2003, each of which has been duly obtained and is in full
force and effect, provided that no opinion is expressed with respect to compliance with
any securities laws;
(h) to the best of my knowledge, other than as described in the Reoffering
Circular, the Company has not received notice of or process in any action, suit,
proceeding, inquiry or investigation before or by any court, public board or body pending
against the Company, nor is any such action, suit, proceeding inquiry or investigation
pending or threatened against the Company, wherein an unfavorable decision, ruling or
finding would have a material adverse effect on the properties, business, financial
condition or results of operations of the Company or the transactions contemplated by the
Company Documents or the Reoffering Circular, or which would adversely affect the
validity or enforceability of orthe authority of the Company to perform its obligations
under, Company Documents or materially adversely affect the ability of the Company to
perform its obligations thereunder; and
(i) to the best of my knowledge, the Company is not in default under the
Company Documents, the Loan Agreement or any material indenture or other agreement
or instrument governing outstanding indebtedness issued by the Company nor, to the best
of my knowledge, has any event occurred, which event is continuing, which with notice
or the passage of time or both would constitute a default under any such document.
I have not passed upon, and the foregoing assumes and is subject to, the tax-exempt
status of interest on the Bonds, as to which a separate opinion has been given to Chapman and
4822-8857-661.4
Morgan Sanley RemAgmt
A-4
Cutler LLP. In addition, I express no opinion as to the application or effect of any securities law
to the transactions contemplated by the Reoffering Circular.
Additionally, I advise you that, without having undertaken to determine independently
the accuracy or completeness of the statements contained in the Reoffering Circular, except as
set forth above, nothing has come to my attention in the course of my participation in the
preparation of the Reoffering Circular and in the transactions contemplated thereby, or in the
performance of my duties as Counsel to the Company, or otherwise, that causes me to believe, as
of the date hereof, that the Reoffering Circular (except for the financial statements and other
financial and statistical data included or incorporated by reference therein, as to which I express
no opinion) contains any untrue or misleading statement of a material fact or omits to state any
material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
The opinions expressed herein are limited to matters governed by the laws of the
United States of America and the State of Oregon and, as to the opinions expressed in
paragraph (g) above, the laws of the States of California, Idaho, Utah, Washington and
Wyoming, that are applicable to PacifiCorp as a regulated public utility in such states, and I
express no opinion as to the law of any other jurisdiction. In rendering the opinions expressed
herein, I have relied upon the attached opinion letter of Jeffery B. Erb, Esq., Assistant General
Counsel to the Company, as to the matters expressed therein and the opinions expressed herein
are subject to all of the assumptions and qualifications recited in the opinion letter attached
hereto.
I hereby confirm my consent to the use of my name on the cover page and under the
caption "CERTAIN LEGAL MATTERS" in the Reoffering Circular.
This opinion is addressed solely to you in connection with the transactions contemplated
by the Company Documents and the Reoffering Circular and is not to be relied upon by any
other person or for any other purposes or quoted or referred to in any public document or filed
with any govemmental agency or other person without my written consent.
Very truly yours,
Paul J. Leighton
4822-88s2-6611 .4
Morgan Stanley RemAgmt
A-5
EXHIBIT B
OPIMON OF COI]NSEL TO REMARKETING AGEI{T
See Attached
4822-8852{611.4
Morgan Stanley RemAgrm
ILETTERI{EAD OF KUTAK ROCK LLP]
20r3
Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
$8,500,000
City of Forsyth, Rosebud County, Montana
Flexible Rate Demand Pollution Control
Revenue Bonds
(Pacifi Corp Colstrip Proj ect)
Series 1986
Ladies and Gentlemen:
$22,000,000
Lincoln County, Wyoming
Environmental Improvement
Revenue Bonds
(PacifiCorp Project)
Series 1995
This letter is being delivered to you in conjunction with the Remarketing Agreement
dated May 22,2013 (the "Remarketing Agreement") between PacifiCorp (the "Company") and
Morgan Stanley & Co. LLC (the "Remarketing Agent") relating to the conversion and
remarketing on the date hereof of the above-captioned two issues of Bonds (collectively, the
"Bonds"). The terms defined in the Remarketing Agreement are used in this letter with the
meanings assigned to them in the Remarketing Agreement.
In our capacity as counsel to the Remarketing Agent, we have participated with you and
other parties in the preparation of the Reoffering Circular (the "Reoffering Circular") used in
connection with the remarketing of the Bonds. In the course of such participation, we have
reviewed information furnished to us by, and have participated in conferences with,
representatives of the Company, its counsel, representatives of Chapman and Cutler LLP, Bond
Counsel, and representatives of Morgan Stanley & Co. LLC, as Remarketing Agent of the
Bonds. We have also reviewed the documents, notices, certificates and opinions delivered to the
Remarketing Agent pursuant to the Remarketing Agreement, other documents and records
relating to the conversion and remarketing of the Bonds and certain other documents of the
Company. In addition, we have relied upon, and have assumed the correctness of, certificates of
officials of the Company and the Trustee. However, we have not independently investigated or
verified the accuracy, completeness or faimess of any of the statements included in the
Reoffering Circular.
Based solely on the foregoing, wg advise you that, although we have made no
independent investigation or verification of the accuracy, faimess or completeness of, and do not
pass upon or assume any responsibility for, the statements included in the Reoffering Circular,
during the course of the activities described in the preceding paragraph no information came to
the attention of the attomeys in our firm rendering legal services in connection with the
4s2z-Bssz-6611.4 B-2
Morgan Stanley RemAgmt
conversion and remarketing of the Bonds which causes us to believe that the Reoffering Circular
(except for the financial statements, financial, statistical and numerical information, forecasts,
estimates, assumptions and expressions of opinion included therein and except for the
information contained in the Reoffering Circular under the captions 'THE BONDS-
Book-Entry System" and "THE FIRST MORTGAGE BONDS", and in Appendices B or C, as to
which we express no view), as of the date of this letter, contains any untrue statement of a
material fact or omits to state any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
This letter is issued to and for the sole benefit ofthe above addressee and is issued for the
sole purpose of the transaction specifically referred to herein. No person other than the above
addressee may rely upon this letter without our express prior written consent. This letter may not
be utilized by you for any other purpose whatsoever and may not be quoted by you without our
express prior written consent. We assume no obligation to review or supplement this letter
subsequent to its date, whether by reason of a change in the current laws, by legislative or
regulatory action, by judicial decision or for any other reason.
Very truly yours,
4822-8852-6611.4
Morgan Stanley RemAgmt
B-3