20130913Compliance Filing.pdf

Avista Corp.
l4ll EastMission P0 Box3727
Spokane,Washington 99220-3727
Telephone [phone]
Toll Free 8@-727-9170
September ll,2013
State of Idaho
Idaho Public Utilities Commission
Statehouse
Boise ID 83720
Attention: Jean D. Jewell, Secretary
Case No. AVU-U-l l-01
We are submitting the following information in compliance with the Commission's Order No. 32338 under
Case No. AVU-U-l 1-01 for the sale of securities not to exceed $450,000,000.
On August 14,2013, Avista Corporation (Avista Corp. or the Company) entered into a term loan agreement
with Union Bank, N.A., as administrative agent in the amount of $90.0 million and bearing an annual interest
rate of 0.84 percent. The term loan agreement has an expiration date of August 14,2016. The term loan
agreement is secured by $90.0 million of non-transferable First Mortgage Bonds of the Company issued to
Union Bank, N.A. Such First Mortgage Bonds would only become due and payable in the event, and then only
to the extent, that the Company defaults on its obligations under the term loan agreement.
In connection with the pricing of the term loan, we cash settled interest rate swap contracts and received total
proceeds of $2.9 million, which will be amortized as a component of interest expense over the life of the debt.
The total net proceeds from the $90 million term loan agreement will be used to refinance $50 million in First
Mortgage Bonds maturing in December 2013, to repay a portion of the borrowings outstanding under the
Company's $400 million line of credit and for general corporate purposes.
Table l.
i':.'r i ':.. r,-,. I I
^liivts
100.07o
(0.2)
Corp.
Gross Proceeds
Arrangement Fees
P..-TS Payeble to Aq,P"lllatrt
Interest Rate Swaps
Other Issuance./Technhal Services Expenses
Net Proceeds
$9o,0oo,6oo ,,:
(165,000)
89,835,000
2,goo,6go
(25teo3)'
918
3.2
(0.3)
92,475,777 r02-80h
Attached are the term loan agreement and the 55th supplemental indenture that was executed in
connection to this issuance.
Please contact Damien Lysiak at [phone] if you have any questions.
Sincerely,
n\/-x* L Z*^t-
nyun l0r.asselt
Director of Finance, Assistant Treasurer
Enclosure
' These include costs currently known to the Company. The Company is expecting additional fees related to filing
fees and potentially additional legal expenses currently unbilled.
AVISTA CORPORATION
TO
CITIBAI\IK, N.A.
As Successor Trustee under
Mortgage ond Deed of Trust,
datedasofJune l, 1939
Fifty-fifth Supplemental Indentu re
Providing among other things for a series of bonds designated
"First Mortgage Bonds, Collateral Series 20134"
Due August 14, 2016
Dated as of Augustl,2013
DWT 221 82381v14 0088333-0001 10
FIFTY-FIETH SUPPLEMENTAL INDENTURE
THIS INDENTURE, dated as of the I't day of August, 2013, between
AVISTA CORPORATION (formerly known as The Washington Water Power
Company), a corporation of the State of Washington, whose post office address is
l4l I East Mission Avenue, Spokane, Washington 99202 (the "Company"), and
CITIBANK, N.A., formerly First National City Bank (successor by merger to First
National City Trust Company, formerly City Bank Farmers Trust Company), a national
banking association incorporated and existing under the laws of the United States of
Ameri&, whose post office address is 388 Greenwich Street, l4th Floor, New York, New
York 10013 (the "Trustee"), as Trustee underthe Mortgage and Deed of Trust, dated as
of June 1,1939 (the "Original Mortgage"), executed and delivered by the Company to
secure the payment of bonds issued or to be issued under and in accordance with the
provisions thereof, this indenture (the "Fifty-fifth Supplemental Indenture") being
supplemental to the Original Mortgage, as heretofore supplemented and amended.
WHEREAS pursuant to a written request of the Company made in
accordance with Section 103 of the Original Mortgage, FrancisM. Pitt (then Individual
Trustee under the Mortgage, as supplemented) ceased to be a trustee thereunder on
July 23, 1969, and all of his powers as Individual Trustee have devolved upon the Trustee
and its successors alone; and
WHEREAS by the Original Mortgage the Company covenanted that it
would execute and deliver such further instruments and do such further acts as might be
necessary or proper to carry out more effectually the purposes of the Original Mortgage
and to make subject to the lien of the Original Mortgage any property thereafter acquired
intended to be subject to the lien thereof; and
WHEREAS the Company has heretofore executed and delivered, in
addition to the Original Mortgage, the indentures supplemental thereto, and has issued the
series of bonds, set forth in Exhibit A hereto (the Original Mortgage, as supplemented
and amended by the First through Fifty-fourth Supplemental Indentures and, if the
context shall so require, as to be supplemented by this Fifty-fifth Supplemental Indenture,
being herein sometimes called the "Mortgage"); and
WHEREAS the Original Mortgage and the First through Fifty-third
Supplemental Indentures have been appropriately filed or recorded in various official
records in the States of Washington, Idaho, Montana and Oregon, as set forth in the First
through Fifty-fourth Supplemental Indentures and the Instrument of Further Assurance,
dated December 15,2001, hereinafter referred to; and
WHEREAS the Fifty-fourth Supplemental Indenture, dated as of
November 1,2012, has been appropriately filed or recorded in the various official records
in the States of Washington, Idaho, Montana and Oregon, as set forth in Exhibit B hereto;
and
DWT 221 8238 lvl4 0088333-000 I l0
WHEREAS for the purpose of confirming or perfecting the lien of the
Mortgage on certain of its properties, the Company has heretofore executed and delivered
a Short Form Mortgage and Security Agreement, in multiple counterparts dated as of
various dates in 1992, and such instrument has been appropriately filed or recorded in the
various official records in the States of Montana and Oregon; and
WHEREAS for the purpose of confirming or perfecting the lien of the
Mortgage on certain of its properties, the Company has heretofore executed and delivered
an Instrument of Further Assurance dated as of December 15,2001, and such instrument
has been appropriately filed or recorded in the various official records in the States of
Washington, Idaho, Montana and Oregon; and
WHEREAS in addition to the property described in the Mortgage the
Company has acquired certain other property, rights and interests in property; and
WHEREAS Section 120 of the Original Mortgage, as heretofore amended,
provides that, without the consent of any holders of bonds, the Company and the Trustee,
at any time and from time to time, may enter into indentures supplemental to the Original
Mortgage for various purposes set forth therein, including, without limitation, to cure
ambiguities or correct defective or inconsistent provisions or to make other changes
therein that shall not adversely affect the interests of the holders of bonds of any series in
any material respect or to establish the form or terms of bonds of any series as
contemplated by Article II; and
WHEREAS Section 8 of the Original Mortgage, as heretofore amended,
provides that the form of each series of bonds (other than the First Series) issued
thereunder and of the coupons to be attached to coupon bonds of such series shall be
established by Resolution of the Board of Directors of the Company or by Treasurer's
Certificate, or shall be set forth in an indenture supplemental to the Original Mortgage;
that the form of such series, as so established, shall specify the descriptive title of the
bonds and various other terms thereof; and that such series may also contain such
provisions not inconsistent with the provisions of the Mortgage as the Company may, in
its discretion, cause to be inserted therein expressing or referring to the terms and
conditions upon which such bonds are to be issued and/or secured under the Mortgage;
and
WHEREAS the Company now desires to create a new series of bonds; and
WHEREAS the execution and delivery by the Company of this Fifty-fifth
Supplemental Indenture and the terms of the Bonds of the Fifty-sixth Series, hereinafter
referred to, have been duly authorized by the Board of Directors of the Company by
appropriate Resolutions of said Board of Directors, and all things necessary to make this
Fifty-fifth Supplemental Indenture a valid, binding and legal instrument have been
performed;
NOW, THEREFORE, THIS INDENTURE WITNESSETH: That the
Company, in consideration of the premises and of other good and valuable consideration,
DWT 221 82381 vl4 0088333-0001 l0
the receipt and sufficiency whereof are hereby acknowledged, hereby confirms the estate,
title and rights of the Trustee (including, without limitation, the lien of the Mortgage on
the property of the Company subjected thereto, whether now owned or hereafter
acquired) held as security for the payment of both the principal of and interest and
premium, if any, on the bonds from time to time issued under the Mortgage according to
their tenor and effect and the performance of all the provisions of the Mortgage and of
such bonds, and, without limiting the generality of the foregoing, hereby confirms the
grant, bargain, sale, release, conveyance, assignment, transfer, mortgage, pledge, setting
over and confirmation unto the Trustee, contained in the Mortgage, of all the following
described properties of the Company, whether now owned or hereafter acquired, namely:
All of the property, real, personal and mixed, of every character
and wheresoever situated (except any hereinafter or in the Mortgage
expressly excepted) which the Company now owns or, subject to the
provisions of Section 87 of the Original Mortgage, ffioy hereafter acquire
prior to the satisfaction and discharge of the Mortgage, as fully and
completely as if herein or in the Mortgage specifically described, and
including (without in anywise limiting or impairing by the enumeration of
the same the scope and intent of the foregoing or of any general
description contained in Mortgage) all lands, real estate, easements,
servitudes, rights of way and leasehold and other interests in real estate; all
rights to the use or appropriation of water, flowage rights, water storage
rights, flooding rights, and other rights in respect of or relating to water;
all plants for the generation of electricity, power houses, dams, dam sites,
reservoirs, flumes, raceways, diversion works, head workso waterways,
water works, water systems, gas plants, steam heat plants, hot water
plants, ice or refrigeration plants, stations, substations, offices, buildings
and other works and structures and the equipment thereof and all
improvements, extensions and additions thereto; all generators, machinery,
engines, turbines, boilers, dynamos, transformers, motors, electric
machines, switchboards, regulators, meters, electrical and mechanical
appliances, conduits, cables, pipes and mains; all lines and systems for the
transmission and distribution of electric current, gas, steam heat or water
for any purpose; all towers, mains, pipes, poles, pole lines, conduits,
cables, wires, switch racks, insulators, compressors, pumps, fittings,
valves and connections; all motor vehicles and automobiles; all tools,
implements, apparatus, furniture, stores, supplies and equipment; all
franchises (except the Company's franchise to be a corporation), licenses,
permits, rights, powers and privileges; and (except as hereinafter or in the
Mortgage expressly excepted) all the right, title and interest of the
Company in and to all other property of any kind or nature.
The Company hereby acknowledges that, as of the date of this
Fifty-fifth Supplemental Indenture, the real property located in the State of
Washington, taken as a whole, that is so conveyed or intended to be so
conveyed under the Mortgage is not used principally for agricultural
purposes.
DWT 22182381v14 0088333-0001 l0
The property so conveyed or intended to be so conveyed under the
Mortgage shall include, but shall not be limited to, the property set forth in
Exhibit C hereto, the particular description of which is intended only to
aid in the identification thereof and shall not be construed as limiting the
force, effect and scope ofthe foregoing.
TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the aforesaid property or any part
thereof, with the reversion and reversions, remainder and remainders and (subject to the
provisions of Section 57 of the Original Mortgage) the tolls, rents, revenues, issues,
earnings, income, product and profits thereof, and all the estate, right, title and interest
and claim whatsoever, at law as well as in equity, which the Company now has or may
hereafter acquire in and to the aforesaid property and franchises and every part and parcel
thereof.
THE COMPANY HEREBY CONFIRMS that, subject to the provisions of
Section 87 of the Original Mortgage, all the property, rights, and franchises acquired by
the Company after the date thereof (except any hereinbefore or hereinafter or in the
Mortgage expressly excepted) are and shall be as fully embraced within the lien of the
Mortgage as if such property, rights and franchises had been owned by the Company at
the date of the Original Mortgage and had been specifically described therein.
PROVIDED THAT the following were not and were not intended to be
then or now or hereafter granted, bargained, sold, released, conveyed, assigned,
transferred, mortgaged, pledged, set over or confirmed under the Mortgage and were, are
and shall be expressly excepted from the lien and operation of the Mortgage
namely: (l) cash, shares of stock and obligations (including bonds, notes and other
securities) not hereafter specifically pledged, paid, deposited or delivered under the
Mortgage or covenanted so to be; (2) merchandise, equipment, materials or supplies held
for the purpose of sale in the usual course of business or for consumption in the operation
of any properties of the Company; (3) bills, notes and accounts receivable, and all
contracts, leases and operating agreements not specifically pledged under the Mortgage
or covenanted so to be; (4) electric energy and other materials or products generated,
manufactured, produced or purchased by the Company for sale, distribution or use in the
ordinary course of its business; and (5) any property heretofore released pursuant to any
provisions of the Mortgage and not heretofore disposed of by the Company; provided,
however, that the property and rights expressly excepted from the lien and operation of
the Mortgage in the above subdivisions (2) and (3) shall (to the extent permitted by law)
cease to be so excepted in the event that the Trustee or a receiver or trustee shall enter
upon and take possession of the Mortgaged and Pledged Property in the manner provided
in Article XII of the Original Mortgage by reason of the occurrence of a Completed
Default as defined in said Article XII.
TO HAVE AND TO HOLD all such properties, real, personal and mixed,
granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged,
set over or confirmed by the Company in the Mortgage as aforesaid, or intended so to be,
unto the Trustee, and its successors, heirs and assigns forever.
DWT 22182381v14 0088333-0001 10
IN TRUST NEVERTHELESS, for the same purposes and upon the same
terms, trusts and conditions and subject to and with the same provisos and covenants as
set forth in the Mortgage, this Fifty-fifth Supplemental Indenture being supplemental to
the Mortgage.
AND IT IS HEREBY FURTHER CONFIRMED by the Company that all
the terms, conditions, provisos, covenants and provisions contained in the Mortgage shall
affect and apply to the property in the Mortgage described and conveyed, and to the
estates, rights, obligations and duties of the Company and the Trustee and the
beneficiaries of the trust with respect to said property, and to the Trustee and its
successors in the trust, in the same manner and with the same effect as if the said property
had been owned by the Company at the time of the execution of the Original Mortgage,
and had been specifically and at length described in and conveyed to said Trustee by the
Original Mortgage as a part of the property therein stated to be conveyed.
The Company further covenants and agrees to and with the Trustee and its
successor or successors in such trust under the Mortgage, as follows:
ARTICLE I
Fifty-sixth Series of Bonds
SECTION l. (l) There shall be a series of bonds designated "Collateral
Series 2013A" (herein sometimes referred to as the "Bonds of the Fifty-sixth Series"),
each of which shall also bear the descriptive title First Mortgage Bond, and the form
thereof is set forth on Exhibit D hereto. Bonds of the Fifty-sixth Series shall be issued as
fully registered bonds in denominations of One Thousand Dollars and, at the option of
the Company, any amount in excess thereof (the exercise of such option to be evidenced
by the execution and delivery thereof) and shall be dated as in Section l0 of the Original
Mortgage provided. Each Bond of the Fifty-sixth Series shall mature on August 14,2016
and shall bear interest, be redeemable and have such other terms and provisions as set
forth below.
(ll) The Bonds of the Fifty-sixth Series shall have the following terms
and characteristics:
(a) the Bonds of the Fifty-sixth Series shall be initially authenticated
and delivered under the Mortgage in the aggregate principal amount of
$90,000,000;
(b) the Bonds of the Fifty-sixth Series shall bear interest at the rate of
zero and eighty-four one hundredths per centum (.84%) per annum; interest on
such Bonds shall accrue from and including the date of the initial authentication
and delivery thereof, except as otherwise provided in the form of bond attached
hereto as Exhibit D; interest on such Bonds shall be payable on each Interest
Payment Date and at Maturity (as each of such terms is hereinafter defined); and
interest on such Bonds during any period less than one year for which payment is
DWT 221 82381v14 0088333-0001 l0
made shall be computed in accordance with the Loan Agreement (as hereinafter
defined);
(c) the principal of and premium, if any, and interest on each Bond of
the Fifty-sixth Series payable at Maturity shall be payable upon presentation
thereof at the office or agency of the Company in the Borough of Manhattan, The
City of New York, in such coin or cuffency as at the time of payment is legal
tender for public and private debts; and the interest on each Bond of the Fifty-
sixth Series (other than interest payable at Maturity) shall be payable directly to
the registered owner thereof;
(d) the Bonds of the Fifty-sixth Series shall not be redeemable, in
whole or in part, at the option of the Company;
(e) (i) the Bonds of the Fifty-sixth Series are to be issued and
delivered to the Administrative Agent (as hereinafter defined) in order to provide
the benefit of the lien of the Mortgage as security for the obligation of the
Company under the Loan Agreement to pay the Obligations (as hereinafter
defined), to the extent and subject to the limitations set forth in clauses (iii) and
(iv) of this subdivision;
(ii) upon the earliest of (A) the occurrence of an Event of
Default (as hereinafter defined), and further upon the condition that, in
accordance with the terms of the Loan Agreement, the Loans (as so defined) shall
have been declared to be or shall have otherwise become due and payable
immediately and the Administrative Agent shall have delivered to the Company a
notice demanding redemption of the Bonds of the Fifty-sixth Series which notice
states that it is being delivered pursuant to Article VII of the Loan Agreement, (B)
the occurrence of an Event of Default under clause (g) or (h) of Article VII of the
Loan Agreement, and (C) the Stated Maturity, then all Bonds of the Fifty-sixth
Series shall be redeemed or paid immediately at the principal amount thereof plus
accrued interest to the date of redemption or payment;
(iii) the obligation of the Company to pay the accrued interest
on Bonds of the Fifty-sixth Series on any Interest Payment Date priorto Maturity
(A) shall be deemed to have been satisfied and discharged in full in the event that
all amounts then due in respect of the Obligations shall have been paid or (B)
shall be deemed to remain unsatisfied in an amount equal to the aggregate amount
then due in respect of the Obligations and remaining unpaid (not in excess,
however, of the amount otherwise then due in respect of interest on the Bonds of
the Fifty-sixth Series);
(iv) the obligation of the Company to pay the principal of and
accrued interest on Bonds of the Fifty-sixth Series at or after Maturity (A) shall be
deemed to have been satisfied and discharged in full in the event that all amounts
then due in respect of the Obligations shall have been paid or (B) shall be deemed
to remain unsatisfied in an amount equal to the aggregate amount then due in
DWT 221 8238 lvl4 0088333-0001 l0
respect of the Obligations and remaining unpaid (not in excess, however, of the
amount otherwise then due in respect of principal of and accrued interest on the
Bonds of the Fifty-sixth Series).
(v) the Trustee shall be entitled to presume that the obligation
of the Company to pay the principal of and interest on the Bonds of the Fifty-sixth
Series as the same shall become due and payable shall have been fully satisfied
and discharged unless and until it shall have received a written notice from the
Administrative Agent, signed by an authorized officer thereof, stating that the
principal of and/or interest on the Bonds of the Fifty-sixth Series has become due
and payable and has not been fully paid, and specifying the amount of funds
required to make such payment;
(0 no service charge shall be made for the registration of transfer or
exchange of Bonds of the Fifty-sixth Series;
(g) in the event of an application by the Administrative Agent for a
substituted Bond of the Fifty-sixth Series pursuant to Section l6 of the Original
Mortgage, the Administrative Agent shall not be required to provide any
indemnity or pay any expenses or charges as contemplated in said Section l6; and
(h) the Bonds of the Fifty-sixth Series shall have such other terms as
are set forth in the form of bond attached hereto as Exhibit D.
Anything in this Fifty-fifth Supplemental Indenture or in the Bonds of the
Fifty-sixth Series to the contrary notwithstanding, if, at the time of the Maturity of the
Bonds of the Fifty-sixth Series, the stated aggregate principal amount of such Bonds then
Outstanding shall exceed the aggregate principal amount of the Loans then outstanding,
the aggregate principal amount of such Bonds shall be deemed to have been reduced by
the amount of such excess.
(lll) For all purposes of this Article I, except as otherwise expressly
provided or unless the context otherwise requires, the terms defined below shall have the
meanings specified:
"Administrative Agent" means Union Bank, N.A., in its capacity as
administrative agent under the Loan Agreement.
"Bond Delively Agreement" means the Bond Delivery Agreement, dated
August 14,2013 between the Company and the Administrative Agent.
"Event of Default" shall have the meaning specified in the Loan
Agreement.
"Interest Payment Date" means the quarterly date falling on each
February 14, May 14, August 14 and November 14, commencing on November
14,2013 and ending on the Stated Maturity.
DWT 221 8238 lvl4 0088333-0001 l0
"Loan Agreement" means the Term Loan Agreement, dated as of August
14,2013, among the Company, the lenders party thereto and the Administrative
Agent.
"Loans" shall have the meaning specified in the Loan Agreement.
"Maturity" means the date on which the principal of the Bonds of the
Fifty-sixth Series becomes due and payable, whether at stated maturity, upon
redemption or acceleration or otherwise.
"Obligations" shall have the meaning specified in the Bond Delivery
Agreement.
"Stated Maturity" means August 14,2016.
A copy of the Loan Agreement is on file at the office of the
Administrative Agent at 445 South Figueroa Street, Los Angeles, CA 90071 and at the
office of the Company at l41l East Mission Avenue, Spokane, W A99202.
ARTICLE II
Outstanding Bonds
Upon the delivery of this Fifty-fifth Supplemental Indenture, Bonds of the
Fifty-sixth Series in an aggregate principal amount of $90,000,000 are to be issued and
will be Outstanding, in addition to 51,736,700,000 aggregate principal amount of bonds
of prior series Outstanding at the date of delivery of this Fifty-fifth Supplemental
Indenture.
ARTICLE III
Miscellaneous Provisions
SECTION l. The terms defined in the Original Mortgage shall, for all
purposes of this Fifty-fifth Supplemental Indenture, have the meanings specified in the
Original Mortgage.
SECTION 2. The Trustee hereby confirms its acceptance of the trusts in
the Original Mortgage declared, provided, created or supplemented and agrees to perform
the same upon the terms and conditions in the Original Mortgage set forth, including the
following:
The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Fifty-fifth Supplemental Indenture or for or in
respect of the recitals contained herein, all of which recitals are made by the Company
solely. Each and every term and condition contained in Article XVI of the Original
Mortgage shall apply to and form part of this Fifty-fifth Supplemental Indenture with the
same force and effect as if the same were herein set forth in full, with such omissions,
DWT 22182381v14 0088333-0001 l0
variations and insertions, if any, as may be appropriate to make the same conform to the
provisions of this Fifty-fifth Supplemental Indenture.
SECTION 3. Whenever in this Fifty-fifth Supplemental Indenture either
of the parties hereto is named or referred to, this shall, subject to the provisions of
Articles XV and XVI of the Original Mortgage, be deemed to include the successors and
assigns of such party, and all the covenants and agreements in this Fifty-fifth
Supplemental Indenture contained by or on behalf of the Company, or by or on behalf of
the Trustee, or either of them, shall, subject as aforesaid, bind and inure to the respective
benefits ofthe respective successors and assigns ofsuch parties, whether so expressed or
not.
SECTION 4. Nothing in this Fifty-fifth Supplemental Indenture,
expressed or implied, is intended, or shall be construed, to confer upon, or to give to, any
person, firm or corporation, other than the parties hereto and the holders of the bonds
Outstanding under the Mortgage, any right, remedy or claim under or by reason of this
Fifty-fifth Supplemental Indenture or any covenant, condition, stipulation, promise or
agreement hereof, and all the covenants, conditions, stipulations, promises and
agreements in this Fifty-fifth Supplemental Indenture contained by or on behalf of the
Company shall be for the sole and exclusive benefit of the parties hereto and of the
holders of the bonds Outstanding under the Mortgage.
SECTION 5. This Fifty-fifth Supplemental Indenture shall be executed
in several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
SECTION 6. The titles of the several Articles of this Fifty-fifth
Supplemental Indenture shall not be deemed to be any part thereof.
9
DWT 221 82381v14 0088333-0001 l0
IN WITNESS WHEREOF, on the 14th day of August 2013, AVISTA
CORPORATION has caused its corporarc name to be hereunto affixed, and this
inshument to be signed and sealed by its President or one of ie Vice Presidents, and its
corporate seal to be attested by its Corporate Secretary or one of its Assistant Corporate
Secretaries for and in its behalf, all in The City of Spokane, Washington, as of the day
and year first above written; and on the l4th day of August,2013, CITIBANK, N.A., has
caused its corporate name to be herpunto affixed, and this instrument to be signed and
sealed by its President or one of its Vice Presidens or one of its Senior Trust Officen or
one of its Trust Officers and its corporate seal to be attested by one of its Vice Presidents
or one of its Trus Officers, all in The City of New York, New York, as of the day and
year first above nniten.
AVISTA CORPORATION
/l
By: /t-ktZ-----.
Name: Mark T. Thies-'
Title: Senior Vice President, Chief
Financial Officer and Trcasurer
Atest:
s.i$i:H
= i SEALm!
=?,,i"h:*i,rs
9^^. "^^ Y F,A rt'r^^*
Name: Susan V. frc-ing -7
Title: Assistant Corporate Secretary
Executed, scaled and delivered
by AVISTA CORPORATION
in the presence of:
Supplemenul Indenture
ctflBAfu(@r#
CITIBANI(, N.A., AS TRUSTEE
Name:
rsctTeLLl
Executed, sealed and delivered
by CITIBANK, N.A,
Supplemental Indenture
sTAl'E OF WASHTNGTON )
) ss.:
couNTY oF SPoKANE )
On the l4s day of August 2013, before me personally appcared Mark T.
Thies, to me known to be a Vice President of AVISTA CORPORATION, one of the
corporations that executed the within and foregoing instrument, and acknowledged said
instnrment to be the free and voluntary act and deed of said Corporation for the uses and
purposes therein mentioned and on oath stated that he was authorized to execute said
instnrment and that the seal affixed is the corporate seal of said Corporation.
On the 14ft day of August, 2013, before me, a Notary Public in and for the
State and Courty aforesaid, personally appeared Mark T. Thies, known to me to be a
Vice President of AVISTA CORPORATION, one of the corporations that executed the
within and foregoing instrument and acknowledged to me that such Corporation executed
the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affxed my
official seal the day and year first above written.
-"'$,*iiJ*'i#r'?i i$ r.roranv "{ ==-
qd#
Notary Public
Notary Public
State of Washinglon
CommissionExpires L'A:L' I l -l
t w'l' 22182381v 13 0088333-0001 I0
t2
S']:ATE OF NEW YORI( )
) ss.:
couNTY OFNEW YORK )
On the d[, of Augurst, 2013 before me porsonally appeared Wafaa
Orfy, to me known to be a Vice President of CITIBANK, N.A., one of the corporations
that executed the within and foregoing instrument, and aclcnowledged said instrunrent to
be the free and voluntary act and deed of said Corpolation for the uses and purposes
therein mentioned and on oath stated that she was authorized to execute said instrument
and that the seal affixed is.the corporate seal of said Corporation.
On the !{s, of Augurst, zol3,before me, a Notary Public in and for
tlie State and County aforesaid, personally appeared Wafaa Orfy, l<nown to me to be a
Vice President of CITIBANI(, N.A., one of the colporations that executed the within and
foregoing instrument and acknowledged to rne.that such Corporation executed the same.
IN WIINESS WI-IEREOF, I have
official seal the day and year first above written.
hereunto set my hand and affixed rrry
lloneEN lRls sANT.pS;l'"r,
'rf otarv
-puotic,
Stdte ol Neul, Voyl+,
Redlsrra$on #01SA6329?50' "
'i r:.ln Naasau CP.UntY
Eiolres sept.''?? i 291' 4 Notary Public
State of New Y
Cornrnission Expires
Notary Public
SupplementaI lr:denture
EXHIBIT A
MORTGAGE, SUPPLEMENTAL INDENTURES
AND SERIES OF BONDS
MORTGAGE OR
SUPPLEMENTAL
INDENTURE DATED AS OF
SERIES PRINCIPAI,
AMOUNT
ISSUED
PRINCIPAL
AMOUNT
OUTSTANDINGNO.DESIGNATION
Original June l. 1939 I 3-l/2o/o Series due 1964 $22,000,000 None
First October I. 1952 2 3-ll2o/o Series due 1982
(changed to 3-314o/o in
Twelfth Supplemental
Indenture)
30,000,000 None
Second May I, 1953 1 3-7l8olo Series due 1983 10,000,000 None
Third December l. 1955 None
Fourth March 15,1957 None
Fifth July I, 1957 4 4-7l8olo Series due 1987 30,000,000 None
Sixth January I,1958 5 4-ll8% Series due 1988 20,000,000 None
Seventh August l, 1958 6 4-318o/o Series due 1988 r 5,000,000 None
Eighth January l,1959 7 4-3/4o/o Series due 1989 r s,000,000 None
Ninth January l,1960 8 5-3l87o Series due 1990 10,000,000 None
Tenth April I, 1964 9 4-518%Series due 1994 30,000,000 None
Eleventh March I ,1965 l0 4-5/8o/o Series due 1995 10,000,000 None
Twelfth May 1,1966 None
Thineenth August l, 1966 lt 6 7o Series due 1996 20,000,000 None
Fourteenth April l, 1970 t2 9-ll47o Series due 2000 20,000,000 None
Fifteenth May 1,1973 t3 7-7l87o Series due 2003 20,000,000 None
Sixteenth February l,1975 l4 9-3l|Yo Series due 2005 25,000,000 None
Seventeenth November 1- 1976 15 8-3/4olo Series due 2006 30"000,000 None
DWT 22182381v14 0088333-0001 l0
A-l
MORTGAGE OR
SUPPLEMENTAL
INDENTURE DATED AS OF
SERIES PRINCIPAL
AMOUNT
ISSUED
PRINCIPAL
AMOUNT
OUTSTANDINGNO.DESIGNATION
Eighteenth June I. 1980 None
Nineteenth January 1, l98l t6 l4-l/8o/o Series due l99l 40,000,000 None
Twentieth August l, 1982 l7 l5-314o/o Series due 1990-
1992
60,000,000 None
Twenty-First September l, 1983 l8 l3-ll2%o Series due 2013 60,000,000 None
Twenty-Second March l. 1984 t9 l3-ll4Yo Series due 1994 60,000,000 None
Twenty-Third December l, 1986 20 9-ll4% Series due 2016 80,000,000 None
Twenty-Fourth January l, 1988 21 l0-3/8o/o Series due 2018 50,000,000 None
Twenty-Fifth October l. 1989 22
23
7-ll8% Series due 2013
7 -2 I 5o/o Series due 20 I 6
66,700,000
17,000,000
None
None
Twenty-Sixth April I, 1993 24 )ecureo Medrum- I ern
Notes, Series A
($250,000,000 authorized)
250,000,000 36,000,000
Twenty-Seventh January l,1994 25 Secured Medium-Term
Notes, Series B
($250,000,000 authorized)
161,000,000 None
Twenty-Eighth September I, 2001 26 Collateral Series due 2002 220,000,000 None
Twenty-Ninth December l, 2001 27 7.75%o Series due 2007 150,000,000 None
Thirtieth May 1,2002 28 Collateral Series due 2003 225,000,000 None
Thirty-first May l,2003 29 Collateral Series due 2004 245,000,000 None
Thirty-second September l, 2003 30 6.l25Yo Series due 2013 45,000,000 None
Thirty-third May 1,2004 3l Collateral Series due 2005 350,000,000 None
Thirty-fourth November l, 2004 32 5.4502 Series due 2019 90,000,000 90,000,000
Thirty-fifth December 1,2004 33 Collateral Series 2004A 88,850,000 25,000,000
Thirty-sixth December 1,2004 34
35
Collateral Series 20048
Collateral Series 2004C
66,700,000
17,000,000
None
None
DWT 221 82381v14 0088333-000 I l0
A-2
MORTGAGE OR
SUPPLEMENTAL
INDENTURE DATED AS OF
SERIES PRINCIPAL
AMOUNT
ISST]ED
PRINCIPAL
AMOUNT
OUTSTANDINGNO.DESIGNATION
Thirty-seventh December 1,2004 36 Collateral Series 2004D 350,000,000 None
Thirty-eighth May l" 2005 37
38
Collateral Series 2005B
Collateral Series 2005C
66,700,000
I 7,000,000
None
None
Thirty-ninth November l, 2005 39 6.250lo Series due 2035 r 00,000,000
50,000,000
r00,000,000
50,000,000
Fortieth April l, 2006 40 Collateral Series due 201 I 320,000,000 None
Forty-first December l, 2006 4t 5.707o Series due 2037 r 50,000,000 I 50,000,000
Forty-second April l, 2008 42 5.957o Series due 2018 250,000,000 250,000,000
Forty-third November 1,2008 43 Collateral Series 2008A 200,000,000 None
Forty-fourth December 1,2008 44 7.21o/oSeries due 2013 30,000,000 None
Forty-fifth December 1,2008 45 Collateral Series 2008B r 7,000,000 None
Forty-sixth September 1,2009 46 5 .l25%o Series due 2022 250.000.000 250,000,000
Forty-seventh November l, 2009 47 Collateral Series 2009A 75,000,000 None
Forty-eighth December l" 2010 48
49
Collateral Series 2010A
Collateral Series 201 0B
66,700,000
r 7,000,000
66,700,000
17"000,000
Forty-ninth December l,2010 50
5l
3.89olo Series due 2020
5.55olo Series due 2040
52,000,000
35,000,000
52,000,000
35,000,000
Fiftieth December l,20r0 52 I .68% Series due 201 3 50,000,000 50,000,000
Fifty-first February l, 201 I 53 Collateral Series 201 lA 400,000,000 400,000,000
Fifty-second August l,20ll None
Fifty-third December 1,201 I 54 4.45olo Series due 2041 85,000,000 85,000,000
Fifty-fourth November 1,2012 55 4.237o Series due 2047 80,000,000 80,000,000
TOTAL OUTSTANDING s l -736-700-000
DWT 221 82381v14 0088333-0001 l0
A-3
EXHIBIT B
FILING AND RECORDING OF
FIFTY.FOURTH SUPPLEMENTAL INDENTURE
FILING IN STATE OFFICES
State Office of Date
Financing Statement
Document Number
Washineton Secretarv ofState 1-r8-13 2013-022-2980-3
Idaho Secretarv of State t2-28-t2 8 2012-ll 1 7040-l
Montana Secretary ofState l2-28-12 589056 I 84
Oregon Secretarv of State t2-28-12 89398621 5805716
RECORDING IN COUNTY OFFICES
Countv Office of
Real Estate Mortsaqe Records Financing
Statement
Document
NumberDate
Document
Number Book Page
Wanhinslon
Adams Auditor l2-27-12 302857 N/A N/A N/A
Asotin Auditor 12-27-12 333353 N/A N/A N/A
Benton Aud tor t-17-13 2013001784 N/A N/A N/A
Douglas Aud tor 2-27-2 3165741 N/A N/A N/A
Ferrv Aud tor 2-28-2 028r 135 N/A N/A N/A
Franklin Auditor 2-28-2 1793420 N/A N/A N/A
Garfield Auditor 2-27-2 20120637 N/A N/A N/A
Grant Auditor 2-27-2 t3l0l80 N/A N/A N/A
Klickitat Auditor 2-28-2 I 10095r N/A N/A N/A
Lewis Auditor 2-28-2 3390253 N/A N/A N/A
Lincoln Auditor 2-27-2 2012 0462743 t07 1399-1431 N/A
Pend Oreille Auditor 2-27-2 201203138726 N/A N/A N/A
Skamania Auditor 4-22-13 20 I 3000806 N/A N/A N/A
Spokane Auditor t2-27-12 6161992 N/A N/A N/A
Stevens Auditor t2-27-12 20120009788 N/A N/A N/A
Thurston Auditor t-22-13 4313737 N/A N/A N/A
Whitman Auditor t2-27-r2 714891 N/A N/A N/A
Idaho
Benewah Recorder 2-27-12 264531 N/A N/A N/A
Bonner Recorder 2-27-12 837465 N/A N/A N/A
Boundary Recorder 2-27-12 256085 N/A N/A N/A
Clearwater Recorder 2-27-12 220867 N/A N/A N/A
Idaho Recorder 2-27-12 486926 N/A N/A N/A
Idaho kont.)
Kootenai Recorder l2-28-12 2390066000 N/A N/A N/A
Latah Recorder l2-27-12 555823 N/A N/A N/A
Lewis Recorder t2-27-12 r40989 N/A N/A N/A
DWT 221 82381v14 0088333-0001 l0
B-1
Nez Perce Recorder t2-27-12 807707 N/A N/A N/A
Shoshone Recorder t2-27-12 470579 N/A N/A N/A
Montana
Bis Horn
Clerk &
Recorder 12-28-12 346552 't23 913-945 N/A
Broadwater
Clerk &
Recorder 12-28-12 168555 147 545 N/A
Golden Vallev
Clerk &
Recorder l-3-13 8l3l I M 16499 N/A
Meaeher
Clerk &
Recorder 12-28-12 140292 N/A N/A N/A
Mineral
Clerk &
Recorder 12-28-12 I I 007s N/A N/A N/A
Rosebud
Clerk &
Recorder t2-28-12 1il109 N/A
Sanders
Clerk &
Recorder t2-31-12 292682 N/A N/A N/A
Stillwater
Clerk &
Recorder 12-28-12 353786 N/A N/A N/A
Treasure
Clerk &
Recorder 12-28-12 82035 20 603 N/A
Wheatland
Clerk &
Recorder 12-28-12 107547 M
24199-
24231 N/A
Yellowstone
Clerk &
Recorder 12-28-12 3651265 N/A N/A N/A
Orepon
Douglas Recorder 2-4-13 3t667tt N/A N/A N/A
Jackson Recorder 1-4-13 20 r 3-000304 N/A N/A N/A
Joseohine Recorder 2-31-2 2012-017614 N/A N/A N/A
Klamath Recorder 2-31-2 2012-014467 N/A N/A N/A
Morrow Recorder 2-28-2 2012-31391 N/A N/A N/A
Union Recorder 2-28-2 20124254 N/A N/A N/A
Wallowa Recorder 2-28-2 6845 r N/A N/A N/A
DWT 221 82381 v l4 0088333-000 I l0
B-2
EXHIBIT C
PROPERTY ADDITIONS
First
THE ADDITIONAL ELECTRIC SUBSTATIONS AND SUBSTATION SITES OF
THE COMPAI\Y, in the State of Washington, including all buildings, structures, towers, poles,
equipment, appliances and devices for transforming, converting and distributing electric energy,
and the lands of the company on which the same are situated and all of the company's real estate
and interests therein, machinery, equipment, appliances, devices, appurtenances and supplies,
franchises, permits and other rights and other property forming a part of said substations or any
of them, or used or enjoyed or capable of being used or enjoyed in connection with any thereof,
including, but not limited to, the following situated in the State of Washington, to wit:
l) Spokane County, WA: "Nine Mile Substation Site"; Property No. WA-32-085; Grantor:
Margaret L Burson Trust; NWI/4 Section 16, Township 26 North, Range 42 E.W.M.
2) Spokane County, WA: "Greenacres Substation"; Property No. 32-086; Grantor: Anne
Werner; SWI/4 Section 18, Township 25 North, Range 45 E.W.M.
Second
ADDITIONAL PROTECTION, MITIGATION AI\D ENHANCEMENT
PROPERTY of the Company, in the States of ldaho, Washington and Montana, real, personal,
or mixed, acquired, constructed and/or installed in, on, under and/or proximate to the Spokane
River Hydroelectric development to obtain required water quality certification, for the purpose of
protecting and/or enhancing wildlife (including fish and aquatic life), botanical life and/or
wetlands, and/or mitigating any harm or damage thereto, and all other property, real, personal or
mixed, used or enjoyed or capable of being used or enjoyed in conjunction therewith, including,
but not limited to, the following in the States of Idaho, Washington and Montana, to wit:
1. Pend Oreille County, WA: "Sacheen Springs Mitigation Property"; Property No. WA-26-
261;Grantor: Forested Habitats, LLC; Sl/2NWl14 & NWI/4SWl/4 Section 35,Township
3l North, Range 43 E.W.M.
Third
BUSINESS OFFICE/S AI\D OR REAL ESTATE, in the States of Washington and
Oregon, to wit:
l) Adams County, WA: "Othello Office Expansion"; Property No. WA-01-001; Grantor:
Kay L. Hougan-Jones; Lot 14,BLK20, Town of Othello, situate in NEI/4NWl/4 Section
3, Township l5 North, Range 29 E.W.M.
501 122484v3
DWT 221 82381 v l4 0088333-0001 l0
c-l
2) Klamath County, OR: "CNG Station"; PropertyNo. 0-8-001; Grantor: D. K
Development Associates One; Lot l0 Tract 1293, Klamath County Oregon, situate in
NWI/4SWI/4 Section 10, Township 39 North, Range 9 E.W.M.
3) Spokane County, WA: "Ross Park Expansion"; Property No. WA-32-001; Grantor:
Estate of Gary T. Barrett; The Northeasterly ll5 ft of that ptn of the Westerly half of
BLK 6, Ross Park, Spokane County, situate in Section 9, Township 25 North, Range 43
E.W.M.
501 I 22484v3
DWT 22182381v14 0088333-0001 l0
c-2
EXHIBIT I)
(Form of Bond)
This bond is non-transferable, except to a successor
Administrative Agent under the Loan Agreement referred to herein.
AVISTA CORPORATION
First Mortgage Bond,
Collateral Series 2013 A
REGISTERED
NO.
REGISTERED
$90,000,000
AVISTA CORPORATION, a corporation of the State of Washington
(hereinafter called the "Company"), for value received, hereby promises to pay to
, as Administrative Agent under the Loan Agreement hereinafter referred to, or registered
assigns on August 14,2016
NINETY MILLION DOLLARS
and to pay the registered owner hereof interest thereon from August 14,2013 in arrears
on February 14, May 14, August 14 and November 14 of each year, commencing on
November 14,2013 (each such date being hereinafter called an oolnterest Payment Date")
and at Maturity (as hereinafter defined), at the rate of zero and eighty-four one
hundredths per centum (.84%) per annum computed as provided in the Fifty-fifth
Supplemental Indenture hereinafter referred to, until the Company's obligation with
respect to the payment of such principal shall have been discharged. The principal of and
premium, if any, and interest on this bond payable at Maturity shall be payable upon
presentation hereof at the office or agency of the Company in the Borough of Manhattan,
The City of New York, in such coin or curency of the United States of America as at the
time of payment is legal tender for public and private debts. The interest on this bond
(other than interest payable at Maturity) shall be paid directly to the registered owner
hereof. Interest payable at Maturity shall be paid to the person to whom principal shall
be paid. As used herein, the term "Maturity" shall mean the date on which the principal
of this bond becomes due and payable, whether at stated maturity, upon redemption or
acceleration, or otherwise.
This bond is one of an issue of bonds of the Company issuable in series
and is one of a series known as its First Mortgage Bonds, Collateral Series 20134, all
DWT 221 8238 1v l4 0088333-000 I I 0
D-1
bonds of all such series being issued and issuable under and equally secured (except
insofar as any sinking or other fund, established in accordance with the provisions of the
Mortgage hereinafter mentioned, may afford additional security for the bonds of any
particular series) by a Mortgage and Deed of Trust, dated as of June l, 1939 (the
"Original Mortgage"), executed by the Company (formerly known as The Washington
Water Power Company) to City Bank Farmers Trust Company and Ralph E. Morton, as
Trustees (Citibank, N.A., successor Trustee to both said Trustees). The Original
Mortgage has been amended and supplemented by various supplemental indentures,
including the Fifty-fifth Supplemental Indenture, dated as of August l, 2013 (the "Fifty-
fifth Supplemental Indenture") and, as so amended and supplemented, is herein called the
"Mortgage." Reference is made to the Mortgage for a description of the property
mortgaged and pledged, the nature and extent of the security, the rights of the holders of
the bonds and of the Trustee in respect thereof, the duties and immunities of the Trustee,
the terms and conditions upon which the bonds are and are to be secured and the
circumstances under which additional bonds may be issued. If there shall be a conflict
between the terms of this bond andthe provisions of the Mortgage, the provisions of the
Mortgage shall control to the extent permitted by law. The holder of this bond, by its
acceptance hereof, shall be deemed to have consented and agreed to all of the terms and
provisions of the Mongage.
The Mortgage may be modified or altered by affirmative vote of the
holders of at least 600/o in principal amount of the bonds outstanding under the Mortgage,
considered as one class, or, if the rights of one or more, but less than all, series of bonds
then outstanding are to be affected, then such modification or alteration may be effected
with the affirmative vote only of 600/o in principal amount of the bonds outstanding of the
series so to be affected, considered as one class, and, furthermore, for limited purposes,
the Mortgage may be modified or altered without any consent or other action of holders
of any series of bonds. No modification or alteration shall, however, permit an extension
of the Maturity of the principal of, or interest on, this bond or a reduction in such
principal or the rate of interest hereon or any other modification in the terms of payment
of such principal or interest or the creation of any lien equal or prior to the lien of the
Mortgage or deprive the holder of a lien on the mortgaged and pledged property without
the consent ofthe holder hereof.
The bonds of this series are not redeemable, in whole or in part, at the
option of the Company.
The bonds of this series have been issued and delivered to Union Bank,
N.A., as Administrative Agent under the Loan Agreement (as such terms are defined in
the Fifty-fifth Supplemental Indenture), in order to provide the benefit of the lien of the
Mortgage as security for the obligation of the Company under the Loan Agreement to pay
the Obligations (as so defined), to the extent and subject to the limitations set forth
below.
DWT 22 I 8238 I v l4 0088333-000 I l0
D-2
Upon the earliest of (A) the occurrence of an Event of Default (as defined
in the Fifty-fifth Supplemental Indenture), and further upon the condition that, in
accordance with the terms of the Loan Agreement, the Loans (as so defined) shall have
been declared to be or shall have otherwise become due and payable immediately and the
Administrative Agent shall have delivered to the Company a notice demanding
redemption of the bonds of this series which notice states that it is being delivered
pursuant to Article VII of the Loan Agreement, (B) the occurrence of an Event of Default
under clause (g) or (h) of Anicle VII of the Loan Agreement, and (C) the Stated Maturity
(as defined below), then all bonds of this series shall be redeemed or paid immediately at
the principal amount thereof plus accrued interest to the date of redemption or payment.
The obligation of the Company to pay the accrued interest on bonds of this
series on any Interest Payment Date prior to Maturity (a) shall be deemed to have been
satisfied and discharged in full in the event that all amounts then due in respect of the
Obligations shall have been paid or (b) shall be deemed to remain unsatisfied in an
amount equal to the aggregate amount then due in respect of the Obligations and
remaining unpaid (not in excess, however, of the amount otherwise then due in respect of
interest on the bonds of this series).
The obligation of the Company to pay the principal of and accrued interest
on bonds of this series at or after Maturity (x) shall be deemed to have been satisfied and
discharged in full in the event that all amounts then due in respect of the Obligations shall
have been paid or (y) shall be deemed to remain unsatisfied in an amount equal to the
aggregate amount then due in respect of the Obligations and remaining unpaid (not in
excess, however, of the amount otherwise then due in respect of principal of and accrued
interest on the bonds of this series).
As used herein, "Stated Maturity" means August 14,2016.
Anything in this bond to the contrary notwithstanding, if, at the time of the
Maturity of the bonds of this series, the stated aggregate principal amount of such bonds
then outstanding shall exceed the aggregate principal amount of the Loans then
outstanding, the aggregate principal amount of such bonds shall be deemed to have been
reduced by the amount ofsuch excess.
The principal hereof may be declared or may become due prior to the
Stated Maturity on the conditions, in the manner and at the time set forth in the Mortgage,
upon the occurrence of a Completed Default as in the Mortgage provided.
As provided in the Mortgage and subject to certain limitations therein set
forth, this bond or any portion of the principal amount hereof will be deemed to have
been paid if there has been irrevocably deposited with the Trustee moneys or direct
obligations of or obligations guaranteed by the United States of America, the principal of
and interest on which when due, and without regard to any reinvestment thereof, will
DWT 221 8238 I vl4 0088333-0001 l0
D-3
provide moneys which, together with moneys so deposited, will be sufficient to pay when
due the principal of and premium, if any, and interest on this bond when due.
The Mortgage contains terms, provisions and conditions relating to the
consolidation or merger of the Company with or into, and the conveyance or other
transfer, or lease, of assets to, another corporation and to the assumption by such other
corporation, in certain circumstances, of all of the obligations of the Company under the
Mortgage and on the bonds secured thereby.
This bond is non-transferable except as required to effect transfer to any
successor administrative agent under the Loan Agreement, any such transfer to be made
at the office or agency of the Company in the Borough of Manhattan, The City of New
York, upon surrender and cancellation of this bond, together with a written instrument of
transfer whenever required by the Company duly executed by the registered owner or by
its duly authorized attorney, and, thereupon, a new fully registered bond of the same
series for a like principal amount will be issued to the transferee in exchange herefor as
provided in the Mortgage. The Company and the Trustee may deem and treat the person
in whose name this bond is registered as the absolute owner hereof for the purpose of
receiving payment and for all other purposes.
In the manner prescribed in the Mortgage, any bonds of this series, upon
surrender thereof for cancellation at the office or agency of the Company in the Borough
of Manhattan, The City of New York, are exchangeable for a like aggregate principal
amount of bonds of the same series of other authorized denominations.
No recourse shall be had for the payment of the principal of or interest on
this bond against any incorporator or any past, present or future subscriber to the capital
stock, stockholder, officer or director of the Company or of any predecessor or successor
corporation, as such, either directly or through the Company or any predecessor or
successor corporation, under any rule of law, statute or constitution or by the enforcement
of any assessment or otherwise, all such liability of incorporators, subscribers,
stockholders, officers and directors being released by the holder or owner hereof by the
acceptance of this bond and being likewise waived and released by the terms of the
Mortgage.
This bond shall not become obligatory until Citibank, N.A., the Trustee
under the Mortgage, or its successor thereunder, shall have signed the form of certificate
endorsed hereon.
IN WITNESS WHEREOF, AVISTA CORPORATION has caused this
bond to be signed in its corporate name by its President or one of its Vice Presidents by
his signature or a facsimile thereof, and its corporate seal to be impressed or imprinted
hereon and attested by its Corporate Secretary or one of its Assistant Corporate
Secretaries by his signature or a facsimile thereof.
DWT 221 8238 lv l4 0088333-0001 l0
D-4
Dated:
ATTEST:
AVI
By:-
STA CORPORATION
Name
Title:
DWT 22182381v14 0088333-0001 l0
TRUSTEE'S CERTIFICATE
This bond is one of the bonds, of the series herein designated, described or
provided for in the within-mentioned Mortgage.
CITIBANK, N.A.
Trustee
Authorized Signatory
By:
D-2
DWT 221 8238 lv 14 0088333-0001 10
ASSIGNMENT
VALUE RECEIVED the
FORM
undersigned hereby sells, assigns andFOR
transfers unto
[please insert social security or other identifying number of assignee]
[please print or typewrite name and address of assignee]
the within bond of AVISTA CORPORATION and does hereby irrevocably constitute
and appoint , Attorney, to transfer said bond on the
books of the within-mentioned
Dated:
Company, will full power of substitution in the premises.
Isignature of assignor]
Notice: The signature to this assignment
must correspond with the name as written
upon the face of the bond in every particular
without alteration or enlargement or any
change whatsoever.
DWT 221 82381v14 0088333-0001 l0
D-3
TERM LOAN AGREEMENT
dated as of August 14,2013
among
AVISTA CORPORATION,
as Borrower,
THE LENDERS PARTY HERETO
and
UNION BANK, N.A.,
as Administrative Agent
UNION BANK, N.A.
Lead Arranger and Book Manager
TABLE OF CONTENTS
Page
ARTICLE I DEFTNITIONS ................I
Section l.0l Defined Terms........ .............1
Section 1.02 Terms Generally ..................8
ARTICLE II THE LOANS ................9
Section 2.01 Loans ...........9
Section 2.02 Repayment of Loans; Evidence of Debt ........................9
Section 2.03 Fees...........
Section 2.04 Interest on Loans ...............10
Section 2.05 Default Interest...... ............10
Section 2.06 Prepayment................. ......1I
Section 2.07 Reserve Requirements; Change in Circumstances......... ............11
Section 2.08 Indemnity .....................12
Section 2.09 Pro Rata Treatment................... I 3
Section 2.10 Sharing of Setoffs.. ............13
Section 2.1I Payments .........13
Section 2.12 Taxes
ARTICLE
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
I II REPRESENTATIONS AND WARRANTIES
3.01 Organization; Powers
t7
l7
3.04 GovernmentalApprovals...............t8
3.05 Financial Statements .........183.06 No Material Adverse Change ...............18
3.07 Litigation; Compliance with Laws .......18
3.08 Federal Reserve Regulations .................193.09 Investment Company Act............ ..........19
3.10 No Material Misstatements........... ........19
3.1I Employee Benefit Plans......... ...............193.12 Environmental and Safety Matters...... ....................203.13 Significant Subsidiaries................. ........20
ARTICLE IV CONDITIONS TO BORROWTNG .................20
Section 4.01 Borrowing. ........20
ARTICLE V AFFIRMATIVE COVENANTS.............. ......,.23
Section 5.01 Existence; Businesses and Properties.............. ........23
Section 5.02 Insurance ........23
Section 5.03 Taxes and Obligations........... ...............24
601944211v6
Section 5.04
Section 5.05
Section 5.06
Section 5.07
Section 5.08
Financial Statements, Reports, Etc............. .............24
Litigation and Other Notices ................25
ERISA ............25
Maintaining Records; Access to Properties and Inspections........................26
ARTICLE VI NEGATIVE COVENANTS ,..,...,,.,.,,.,........26
Section6.0l Liens....................................26
Section 6.02 Sale-Leaseback Transactions ................................29
Section 6.03 Mergers, Consolidations and Acquisitions................. ..............,29
Section 6.04 Disposition of Assets... ......30
Section 6.05 Consolidated Total Debt to Consolidated Total Capitalization Ratio..........31
Section 6.06 Public Utility Regulatory Borrowing Limits........ ......................31
ARTICLE VII EVENTS OF DEFAULT.......... ....................3I
ARTICLE VIII RELEASE OF COLLATERAL.......... .,......,.34
Section 8.01 Release upon Termination and Repayment............. ...................34
ARTICLE IX THE ADMINISTRATIVE AGENT
Section 9.01 Appointment and Powers .....................34
Section 9.02 Limitation on Liability ......35
Section 9.03 Other Transactions with Borrower, E1c............. .......35
Section 9.04 Reimbursement; Indemnification..... .......................36
Section 9.05 Absence of Reliance .....................36
Section 9.06 Resignation of Administrative Agent........ ..............36
Section 9.07 Removal of Lender.. ..........37
Use of Proceeds ..............,26
X MISCELLANEOUS ,..,................37
10.01 Notices............37
10.02 Survival of Agreement ..................38
10.03 Binding Effect ...................J8
10.04 Successors and Assigns................ ........39
10.05 Expenses; Indemnity, Damage Waiver ...................41
10.06 Right of Setoff 42
10.10 Entire Agreement ...43
10.11 Waiver of Jury TriaI.......... ...................44
10.12 Severability ......44
10.13 Counterparts................ ......44
10.14 Headings... ......44
10.15 Jurisdiction; Consent to Service of Process ............44
10.16 USA PatriotActNotification ...............45
ARTICLE
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
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Exhibit A Form of Note
Exhibit B Form of Assignment and Assumption
Exhibit C Form of Administrative Questionnaire
Schedule 2.01 Names, Addresses and Loan Amounts of Initial Lenders
Schedule 3.13 Significant Subsidiaries
Schedule a.01(c)(ii) Required Governmental Approvals
Schedule 6.01 Existing Secured Indebtedness
lll
TERM LOAN AGREEMENT, dated as of August 14, 2013, among AVISTA
CORPORATION, a Washington corporation, the Lenders listed in Schedule 2.01 and UNION
BANK, N.A., as Administrative Agent.
The Borrower has requested that the Lenders agree to make term loans in the aggregate
principal amount of $90,000,000. The proceeds of such loans are to be used for general corporate
purposes.
In consideration of the mutual covenants and agreements contained herein, the parties
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. As used in this Agreement, the following terms shall have
the meanings specified below:
*Administrative Agent" shall mean Union Bank, as administrative agent for the
Lenders under the Loan Documents, and any successor Administrative Agent appointed pursuant
to Section 9.06.
*Administrative Questionnaire" shall mean an Administrative Questionnaire in
the form of Exhibit C.
"AfJiliate" shall mean, when used with respect to a specified person, another
person that directly, or indirectly through one or more intermediaries, Controls or is Controlled
by or is under common Control with the person specified.
"Agreemenl" shall mean this Agreement, including all exhibits and schedules
hereto.
'oAssignment and Assumption" shall mean an assignment and assumption
agreement entered into by a Lender and an Eligible Assignee in the form of Exhibit B or such
other form as shall be approved by the Administrative Agent.
"Attributoble Debf' shall mean, in connection with any Sale-Leaseback, the
present value (discounted in accordance with GAAP at the discount rate implied in the lease) of
the obligations of the lessee for rental payments during the term of the lease.
"Boart'shall mean the Board of Governors of the Federal Reserve System of the
United States.
"Bond Delivery Agreemenf' shall mean the Bond Delivery Agreement, dated as
of the date hereof, between the Borrower and the Administrative Agent.
60194421 lv6
o'BorFower" shall mean Avista Corporation, a Washington corporation, and its
successors and assigns.
"Business Day" shall mean any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of California or the State of New York) on which banks are
open for business in Los Angeles and New York City.
*Capital Lease Obligations" of any person shall mean the obligations of such
person to pay rent or other amounts under any lease of (or other arrangement conveying the right
to use) real or personal property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such person under GAAP and,
for the purposes of this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.
"Change in Controf' means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any person or group (within the meaning of the Securities
Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in
effect on the date hereof), of shares representing more than 30% of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the Borrower; or (b) occupation
of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by
persons who were neither (i) nominated by the board of directors of the Borrower nor
(ii) appointed by directors so nominated; pfqvided, that no event described in clause (a) or clause
(b) shall constitute a "Change in Control" if, immediately after giving effect to the transaction
that would otherwise constitute a Change in Control, the Senior Debt Rating assigned by two
nationally recognized credit rating agencies is equal to or higher than Lowest Investment Grade.
"Closing Date" shallmean August 14,2013.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Consolidated Total Capitalization" on any date means the sum, without
duplication, of the following with respect to the Borrower and its consolidated Subsidiaries:
(a) total capitalization as of such date, as determined in accordance with GAAP, (b) the current
portion of liabilities which as of such date would be classified in whole or part as long-term debt
in accordance with GAAP (it being understood that the noncurrent portion of such liabilities is
included in the total capitalization referred to in clause (a)), (c) all obligations as lessee which, in
accordance with GAAP, are capitalized as liabilities (including the current portion thereof), and
(d) all other liabilities which would be classified as short-term debt in accordance with GAAP.
"Consolidated Total Debf' on any date means the sum, without duplication, of
the following with respect to the Borrower and its consolidated Subsidiaries: (a) all liabilities
which as of such date would be classified in whole or in part as long-term debt in accordance
with GAAP (including the current portion thereof), (b) all obligations as lessee which, in
accordance with GAAP, are capitalized as liabilities (including the current portion thereof),
601944211v6
(c) all other liabilities which would be classified as short-term debt in accordance with GAAP,
and (d) all Guarantees of or by the Borrower.
"Controt' shall mean the possession, direct or indirect, of the power to direct or
cause the direction of the management or policies of a person, whether through the ownership of
voting securities, by contract or otherwise, and "Controlling" and "Controlled" shall have
meanings correlative thereto.
"Defuult" shall mean any event or condition which upon notice, lapse of time or
both would constitute an Event of Default.
"dollars" or ",r" shall mean lawful money of the United States of America.
"Electronic Delivery" shall have the meaning assigned to such term in Section
5.04(a).
*Eligible Assignee" means (a) a financial institution organized under the laws of
the United States of America, or any state thereof, and having a combined capital and surplus of
at least $ I 00,000,000 or the obligations of which are directly guaranteed by a financial institution
organized under the laws of the United States of America, or any state thereof, and having a
combined capital and surplus of at least $100,000,000; (b) a commercial bank organized under
the laws of any other country that is a member of the Organization for Economic Cooperation
and Development, or a political subdivision of any such country, and having a combined capital
and surplus of at least $100,000,000, provided that such bank is acting through a branch or
agency located in the United States of America; (c) a person that is (i) a subsidiary of a Lender,
(ii) a subsidiary of a person of which a Lender is a subsidiary or (iii) a person of which a Lender
is a subsidiary; or (d) another Lender; provided, however, that neither the Borrower nor any
Affiliate of the Borrower shall qualiff as an Eligible Assignee.
"Equity Interests" shall mean shares of stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a person, and all options, warrants or other rights to acquire any such equity
ownership interests in a person.
"ERISA" shall mean the Employee Retirement lncome Security Act of 1974, as
the same may be amended from time to time.
"ERISA Affiiate" shall mean any trade or business (whether or not incorporated)
that is a member of a group of which the Borrower is a member and which is treated as a single
employer under Section 414 of the Code.
"Event of Defoult" shall have the meaning assigned to such term in Article VII.
"FATCA" means Sections l47l through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable and not
materially more onerous to comply with), any current or future regulations or official
601944211v6
interpretations thereof and any agreements entered
Code.
into pursuant to Section 1471(bxl) of the
"Fees" shall mean the fees referred to in Section2.03.
"Financial OfJicer" of any corporation shall mean the chief financial officer or
treasurer of such corporation.
"First Mortgage" shall mean the Mortgage and Deed of Trust dated as of June l,
1939, made by the Borrower in favor of Citibank, N.A., as successor trustee, as the same has
been amended, modified or supplemented to date and as the same may be further amended,
modified or supplemented from time to time hereafter.
"First Mortgage Bont' shall mean (a) a first mortgage bond of the Fifty-sixth
Series issued to the Administrative Agent on the Closing Date under a supplemental indenture to
the First Mortgage, in the principal amount of $90,000,000, and/or (b) any first mortgage bond
issued under a supplemental indenture to the First Mortgage in addition to, or in substitution for,
a first mortgage bond previously delivered to the Administrative Agent pursuant to this
Agreement.
"GAAP' shall mean generally accepted accounting principles, applied on a
consistent basis.
"Governmental Authority" shall mean, whether domestic or foreign, any national,
federal, state or local government, any political subdivision thereof, or any governmental, quasi-
governmental, judicial, public or statutory agency, authority, instrumentality, body or entity,
including any central bank and any comparable authority.
"Guarantee" of or by any person shall mean any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such person, direct or indirect, (a) to purchase or pay
(or to advance or supply funds for the purchase or payment of) such Indebtedness or to purchase
(or to advance or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase property, securities or services for the purpose of assuring the
owner of such Indebtedness of the payment of such Indebtedness or (c) to maintain working
capital, equity capital or other financial statement condition or liquidity of the primary obligor so
as to enable the primary obligor to pay such Indebtedness; ptgviided, however, that the term
"Guarantee" shall not include endorsements for collection or deposit, in either case in the
ordinary course of business.
*Indebtedness" of any person shall mean, without duplication, (a) all obligations
of such person for borrowed money or with respect to deposits or advances of any kind, (b) all
obligations of such person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such person upon which interest charges are customarily paid, (d) all obligations
of such person under conditional-sale or other title-retention agreements relating to property or
601944211v6
assets purchased by such person, (e) all obligations of such person issued or assumed as the
deferred purchase price ofproperty or services (other than trade payables incurred in the ordinary
course of business), (f) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such person, whether or not the obligations secured thereby have
been assumed, but limited, if such obligations are without recourse to such person, to the lesser
of the principal amount of such Indebtedness or the fair-market value of such property, (g) all
Guarantees by such person of Indebtedness of others, (h) all Capital Lease Obligations of such
person, (i) all obligations of such person in respect of interest rate protection agreements, foreign
currency exchange agreements or other interest or exchange rate hedging arrangements (the
amount of any such obligation to be the amount that would be payable upon the acceleration,
termination or liquidation thereof) and (f) all obligations of such person as an account party in
respect of letters of credit and bankers' acceptances. The Indebtedness of any person shall
include the Indebtedness of any partnership in which such person is a general partner.
"Interest Payment Date" shall mean the quarterly date falling on each February
14,l|i4ay 14, August 14 and November 14, commencing on November 14,2013 and ending on
the Maturity Date.
oolender'o shall mean (a) each person listed on Schedule 2.01 and (b) any person
that is assigned any or all of the rights or obligations of a Lender pursuant to Section 10.04.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, encumbrance, charge or security interest in or on such asset, (b) the interest of a vendor
or a lessor under any conditional-sale agreement, capital lease or title-retention agreement
relating to such asset and (c) in the case of securities, any purchase option, call or similar right of
a third party with respect to such securities.
'oloon Documents" shall mean this Agreement, the First Mortgage Bond,
First Mortgage, the Supplemental Indenture, the Bond Delivery Agreement, any Notes and
agreement between the Borrower and the Administrative Agent referred to in Section 2.03(a).
"Loons" shall mean loans made by the Lenders to the Borrower pursuant to this
Agreement.
"Lowest Investment Grade" shall mean that the Senior Debt Rating assigned to the
applicable Indebtedness of the Borrower is a rating which, as reasonably determined by the
Administrative Agent, would be the lowest rating granted by the applicable credit-rating agency
which is generally treated as "investment grade" in the ratings regime of that credit-rating agency.
*Margin Stock" shall have the meaning given such term under Regulation U.
*Materiul Adverse Elfect- shall mean an effect on the business, assets, operations
or financial condition of the Borrower and the Subsidiaries taken as a whole which could
reasonably be expected to have a material adverse effect on the creditworthiness of the
Borrower.
the
the
60194421lv6
"Maturity Date" shallmean August 14,2016.
"Notes" shall mean any promissory notes of the Borrower, substantially in the
form of Exhibit A, evidencing Loans, as may be delivered pursuant to Section 2.02.
*PBGC' shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
'operson" shall mean (a) a corporation, association, partnership, trust, limited
liability company, organization, business or individual or (b) a Covernmental Authority.
"Plan" shall mean any pension plan subject to the provisions of Title IV of
ERISA or Section 412 of the Code which is maintained for employees of the Borrower or any
ERISA Affiliate.
"Pro Ratu Shore" shall mean, with respect to any Lender, the percentage of the
aggregate outstanding principal amount of the Loans represented by the outstanding principal
amount ofsuch Lender's Loan.
"Register" shall have the meaning given to such term in Section 10.0a(c).
"Regulation D" shall mean Regulation D of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof and shall include any
successor or other regulation or official interpretation of the Board relating to reserve
requirements applicable to member banks of the Federal Reserve System.
"Regulation U' shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation X' shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Reportable Event" shall mean any reportable event as defined in Section a0$@)
of ERISA or the regulations issued thereunder with respect to a Plan (other than a Plan
maintained by an ERISA Affiliate which is considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Section 414 ofthe Code).
"Required Lenders" shall mean, at any time, Lenders having Loans outstanding
representing more than 50.0Yo of the aggregate Loans outstanding.
"Responsible OfJicef' of any corporation shall mean any executive officer or
Financial Officer of such corporation and any other officer or similar official thereof responsible
for the administration of the obligations of such corporation in respect of this Agreement.
601944211v6
*RTO Transaction" shall mean any sale, transfer or other disposition of
transmission assets entered into in connection with the formation of a regional transmission
organization pursuant to or in a manner consistent with regulatory requirements applicable to the
Borrower.
"Sale-Leaseback" shall mean any arrangement whereby any person shall sell or
transfer any property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property which it intends to
use for substantially the same purpose or purposes as the property being sold or transferred.
"Second Lowest Investment Grade" shall mean that the Senior Debt Rating
assigned to the applicable Indebtedness of the Borrower is a rating which, as reasonably determined
by the Administrative Agent, would be the rating granted by the applicable credit-rating agency
which is generally treated as o'investment grade" in the ratings regime of that credit-rating agency
and is one level higher than Lowest Investment Grade.
"Senior Debt Rating" means, as of any date of determination, as of the close of
business on such date, (a) if the obligations of the Borrower under this Agreement are secured by
the First Mortgage and are not rated, the rating assigned to the Borrower's most senior secured
long-term public Indebtedness (without credit enhancement), (b) if such obligations are not
secured by the First Mortgage and are not rated, the rating assigned to the Borrower's most
senior unsecured long-term public Indebtedness (without credit enhancement) and (c) if such
obligations are rated, the rating assigned to such obligations (without credit enhancement), in
each such case by a nationally recognized credit-rating agency designated by the Borrower,
reasonably approved by the Administrative Agent and not objected to by the Required Lenders
within five Business Days following notice of such designation. Notwithstanding the foregoing,
(i) if the Senior Debt Rating(s) assigned by any of the other nationally recognized credit-rating
agencies is or are different from the Senior Debt Rating assigned by the agency designated by the
Borrower and the ratings (including that of the agency designated by the Borrower) are split by
just one level, then the higher rating will apply, and (ii) if the ratings (including that of the
agency designated by the Borrower) are split by more than one level, then the level that is one
level below the highest rating will apply.
"Signi/icant Subsidiary" shall mean a Subsidiary meeting any one of the
following conditions: (a) the investments in and advances to such Subsidiary by the Borrower
and the other Subsidiaries, if any, as at the end of the Borrower's latest fiscal quarter exceeded
l0o/o of the total assets of the Borrower and its Subsidiaries at such date, computed and
consolidated in accordance with GAAP; or (b) the Borrower's and the other Subsidiaries'
proportionate share of the total assets (after intercompany eliminations) of such Subsidiary as at
the end of the Borrower's latest fiscal quarterexceeded l0o/oof the total assets of the Borrower
and its Subsidiaries at such date, computed and consolidated in accordance with GAAP; or
(c) the equity in the income from continuing operations before income taxes, extraordinary items
and cumulative effect of a change in accounting principles of such Subsidiary (excluding
amounts attributable to any minority interests therein) for the period of four consecutive fiscal
quarters ending at the end of the Borrower's latest fiscal quarter exceeded l0o/o of such income
of the Borrower and its Subsidiaries for such period, computed and consolidated in accordance
601944211v6
with GAAP; or (d) such Subsidiary is the parent of one or more Subsidiaries and together with
such Subsidiaries would, if considered in the aggregate, constitute a Significant Subsidiary.
"subsidiary" shall mean, for any person (the "Parent"), any corporation, limited
liability company, partnership or other entity of which securities or other ownership interests
having by the terms thereof ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions of such corporation, limited liability company,
partnership or other entity (irrespective of whether or not at the time securities or other
ownership interests of any other class or classes of such corporation, limited liability company,
partnership or other entity shall have or might have voting power by reason of the happening of
any contingency) are at the time directly or indirectly owned or controlled by the Parent or one
or more of its subsidiaries or by the Parent and one or more of its subsidiaries.
"Subsidiary" shall mean a subsidiary of the Borrower.
"Supplemental Indenture" shall mean (a) the Fifty-fifth Supplemental Indenture,
dated as of August 1,2013, between the Borrower and Citibank, N.A., as trustee under the First
Mortgage, and/or (b) any supplemental indenture to the First Mortgage, in form and substance
satisfactory to the Administrative Agent, pursuant to which a first mortgage bond is issued in
addition to, or in substitution for, a first mortgage bond previously delivered to the
Administrative Agent pursuant to this Agreement.
"Transactions" shall have the meaning assigned to such term in Section 3.02.
"Transferee" shall have the meaning assigned to such term in Section 2.12(a).
"Union Bank" shall mean Union Bank, N.A.
Section 1.02 Terms Generally. The definitions in Section l.0l shall apply equally to
both the singular and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms. The words
'oinclude," o'includes" and "including" shall be deemed to be followed by the phrase "without
limitation." All references herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the
context shall otherwise require. Except as otherwise expressly provided herein, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in conformity with
GAAP as in effect at that time. Financial statements and other information required to be
delivered by the Borrower to the Administrative Agent and the Lenders pursuant to Section 5.04
shall be prepared in accordance with GAAP as in effect at the time of such preparation, and
calculations in connection with the definitions, covenants and other provisions hereof shall
utilize accounting principles and policies in conformity with GAAP as in effect at the time of
such preparation. If the Borrower notifies the Administrative Agent that the Borrower requests
an amendment to any provision hereof to eliminate the effect of any change occurring after the
date hereof in GAAP or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is given before or
601944211v6
after such change in GAAP or in
the basis of GAAP as in effect
herewith.
the application thereof, such provision shall be interpreted on
at that time until such provision is amended in accordance
ARTICLE II
THE LOANS
Section2.0l Loans. Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender agrees, severally and not jointly, to
make a single Loan to the Borrower on the Closing Date in the ool-oan Amount" set forth
opposite such Lender's name on Schedule 2.01, by wire transfer of immediately available funds
to the Administrative Agent in Los Angeles, California, not later than I l:00 a.m., Pacific time,
on the Closing Date, and the Administrative Agent shall by 1:00 p.m., Pacific time, on the
Closing Date make available to the Borrower in immediately available funds the amounts so
received by wire transfer for credit to the account of the Borrower with Wells Fargo Bank
bearing Account Number 41688 14770, ABA #121000248, re: Avista Corp. No part of any Loan
that is paid or prepaid may be reborrowed.
Section 2.02 Repayment of Loans: Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to each Lender the
then unpaid principal amount of the Loan of such Lender on the Maturity Date. Each Loan shall
bear interest on the outstanding principal balance thereof as set forth in Section 2.04.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from
the Loan made by such Lender, including the amounts of principal and interest payable and paid
to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount and date of each Loan made hereunder, (ii) the amount of any principal, interest or
fees due and payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any principal, interest or fees received by the Administrative Agent
hereunder for the account ofthe Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b) or
(c) of this Section shall be prima facie evidence of the existence and amounts of the obligations
recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that the Loan made by it be evidenced by a Note.
In such event, the Borrower shall prepare, execute and deliver to such Lender a Note payable to
the order of such Lender (or, if requested by such Lender, to such Lender and its registered
assigns). Thereafter, the Loans evidenced by such Note and interest thereon shall at all times
(including after assignment pursuant to Section 10.04) be represented by one or more Notes in
60l9M2llv6
such form payable to the order of the payee named therein (or, if such Note is a registered Note,
to such payee and its registered assigns).
Section 2.03 Fees.
(a) The Borrower agrees to pay to the Administrative Agent, for its own
account, the fees separately agreed to between the Administrative Agent and the Borrower.
(b) Any prepayment of principal of the Loans before the Maturity Date,
whether voluntary or involuntary and whether in whole or in part, shall be accompanied by the
Borrower's payment to the Administrative Agent, for the account of the Lenders, of a
prepayment fee equal to the amount calculated under the following formula: The Administrative
Agent shall determine the diflerence between 0.84% per annum and the rate of return (the "Yield
Rate") that the Administrative Agent could obtain if it were to use the amount of principal being
prepaid to purchase, at the bid price regularly quoted, U.S. Government securities having a
maturity date most nearly coinciding with the Maturity Date and if such securities were held by
the Administrative Agent until the Maturity Date. The above difference, if greater than zero,
shall be multiplied by a fraction, the numerator of which shall be the number of days from the
date of prepayment to the Maturity Date and the denominator of which shall be 365 or 366 days,
as applicable. The product obtained pursuant to the preceding sentence shall then be multiplied
by the aggregate principal amount of the Loans being prepaid. The product obtained pursuant to
the preceding sentence shall then be discounted to present value using the Yield Rate as the
annual discount factor. In no event shall the Administrative Agent or any Lender be obligated to
make any payment or refund to the Borrower, nor shall the Borrower be entitled to any setoff or
other claim against the Administrative Agent or any Lender, should the return that any Lender
would obtain under the prepayment formula set forth above exceed the interest that such Lender
would have received if no prepayment of the Loans had occurred. Notwithstanding the
foregoing, the Borrower shall be permitted to prepay the Loans, in whole or in part, at any time
during the 90-day period ending on the Maturity Date without payment of the prepayment fee
described above.
(c) Once paid, none of the Fees shall be refundable under any circumstances.
Section 2.04 Interest on Loans.
(a) Subject to the provisions of Section 2.05, the Loans shall bear interest at
the rate of 0.84%o per annum.
(b) Interest on each Loan shall be payable on each Interest Payment Date,
except as otherwise provided in this Agreement.
(c) Interest on the Loans shall be computed on the basis of a year of 365 or
366 days, as applicable, for the actual number of days elapsed in the period in question.
Section 2.05 Default lnterest. If the Borrower shall default in the payment of the
principal of or interest on any Loan or any other amount becoming due under the Loan
601944211v6 l0
Documents, by acceleration or otherwise, the Borrower shall on demand from time to time pay
interest, to the extent permitted by law, on such defaulted amount up to (but not including) the
date of actual payment (after as well as before judgment) at the rate of 2.84o/o per annum.
Section 2.06 Prepayment. The Borrower shall have the right at any time and from time
to time to prepay the Loans, in whole or in part, upon at least three Business Days' prior notice
to the Administrative Agent; proviided, however, that each partial prepayment shall be in the
amount of $1,000,000 or a higher whole-integer multiple thereof. Each notice of prepayment
shall specify the prepayment date and the principal amount to be prepaid, shall be irrevocable
and shall commit the Borrower to prepay the amount stated therein on the date stated therein. All
prepayments under this Section 2.06 shall be subject to Sections 2.03 and 2.08 but otherwise
without premium or penalty. All prepayments under this Section 2.06 shall be accompanied by
accrued interest on the principal amount being prepaid to (but excluding) the date of payment.
Section 2.07 Reserve Requirements: Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the date of this
Agreement there is adopted any new law, rule or regulation or any change in applicable law or
regulation or in the interpretation, promulgation, implementation or administration thereof by
any Govemmental Authority charged with the interpretation or administration thereof (whether
or not having the force of law) which shall impose, modify or deem applicable any reserve,
special-deposit or similar requirement against assets of, deposits with or for the account of or
credit extended by any Lender or shall impose on any Lender any other condition affecting this
Agreement or any Loan, and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining its Loan or to reduce the amount of any sum received or
receivable by such Lender hereunder or under any Note (whether of principal, interest or
otherwise) by an amount deemed by such Lender to be material, then the Borrower will pay to
such Lender upon demand such additional amount or amounts as will compensate such Lender
for such additional costs incurred or reduction suffered.
(b) If any Lender shall have determined that the applicability of any law, rule,
regulation, agreement or guideline adopted after the date hereof regarding capital adequacy, or
any change in any of the foregoing or the adoption after the date hereof of any change in any
law, rule, regulation, agreement or guideline existing on the date hereof or in the interpretation or
administration of any of the foregoing by any Govemmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender (or any lending office
thereof) or any Lender's holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such Governmental Authority, has or
would have the effect of reducing the rate of return on such Lender's capital or on the capital of
such Lender's holding company, if any, with respect to this Agreement or any Loan to a level
below that which such Lender or such Lender's holding company could have achieved but for
such applicability, adoption, change or compliance (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to capital adequacy) by
an amount deemed by such Lender to be material, then from time to time the Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered. It is acknowledged that this
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Agreement is being entered into by the Lenders on the understanding that the Lenders will not be
required to maintain capital against their obligations to make Loans under currently applicable
laws, regulations and regulatory guidelines. In the event that any Lender shall be advised by any
Governmental Authority, or shall otherwise determine on the basis of pronouncements of any
Governmental Authority, that such understanding is incorrect, it is agreed that each such Lender
will be entitled to make claims under this paragraph based upon market requirements prevailing
on the date hereof for commitments under comparable credit facilities against which capital is
required to be maintained.
(c) A certificate of a Lender setting forth in reasonable detail such amount or
amounts as shall be necessary to compensate such Lender or such Lender's holding company as
specified in paragraph (a) or (b) above, as the case may be, and the manner in which such Lender
has determined the same, shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on any such
certificate delivered by it within l0 days after its receipt of the same.
(d) Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in return on capital
with respect to any period shall not constitute a waiver of such Lender's right to demand
compensation with respect to such period or any other period. The protection of this Section shall
be available to each Lender regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed.
(e) For purposes of this Agreement, notwithstanding anything in this
Agreement to the contrary, the Dodd-Frank Wall Street Reform and Consumer Protection Act
and all rules, regulations, interpretations, agreements, guidelines, directives and requests in
connection therewith are deemed to have been adopted, and to have gone into effect, after the
date of this Agreement, regardless of the date on which the same were actually adopted or went
into effect.
Section 2.08 Indemnity. The Borrower shall indemnifu each Lender against any loss or
expense (other than any redeployment loss relating to a voluntary prepayment of the Loans in
accordance with Section 2.06) which such Lender may sustain or incur as a consequence of
(a) any payment or prepayment of a Loan required by any provision of this Agreement or
otherwise made or deemed made on a date other than the Maturity Date, (b) any assignment of a
Loan pursuant to Section 2.13(b), or (c) any default in payment or prepayment of the principal
amount of any Loan or any part thereof or interest accrued thereon, as and when due and payable
(at the due date thereof, whether by scheduled maturity, acceleration, irrevocable notice of
prepayment or otherwise), including, in each such case, any loss or reasonable expense sustained
or incurred or to be sustained or incurred in liquidating or employing deposits from third parties
acquired to effect or maintain such Loan or any part thereof. Such loss or reasonable expense
shall include an amount equal to the excess, if any, as reasonably determined by such Lender, of
(i) its cost of obtaining the funds for the Loan being paid, prepaid, assigned or not borrowed for
the period from the date of such payment, prepayment, assignment or failure to borrow to the
Maturity Date over (ii) the amount of interest (as reasonably determined by such Lender) that
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601944211v6
would be realized by such Lender in reemploying the funds so paid, prepaid, assigned or not
borrowed for such period. A certificate of any Lender setting forth any amount or amounts which
such Lender is entitled to receive pursuant to this Section, and the manner in which such Lender
has determined the same, shall be delivered to the Borrower and shall be conclusive absent
manifest error.
Section 2.09 Pro Rata Treatment. Except as required under Sections 2.07, 2.08 and
2.12, each payment or prepayment of principal of the Loans and each payment of interest on the
Loans shall be allocated among the Lenders in accordance with their respective Pro Rata Shares.
Each Lender agrees that, in computing such Lender's portion of the Loans, the Administrative
Agent may, in its discretion, round each Lender's Pro Rata Share of the Loans to the next higher
or lower whole-dollar amount.
Section 2.10 Sharine of Setoffs. Each Lender agrees that if it shall, through the exercise
of a right of banker's lien, setoff or counterclaim against the Borrower, or pursuant to a secured
claim under Section 506 of Title I I of the United States Code or other security or interest arising
from, or in lieu of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other means, obtain payment
(voluntary or involuntary) in respect of its Loan as a result of which the unpaid principal portion
of its Loan shall be proportionately less than the unpaid principal portion of the Loan of any
other Lender, it shall be deemed simultaneously to have purchased from such other Lender at
face value, and shall promptly pay to such other Lender the purchase price for, a participation in
the Loan of such other Lender (each a"Sharing Participatiotl "), so that (a) the aggregate unpaid
principal amount of the Loan and Sharing Participations held by each Lender shall be in the same
proportion to the aggregate unpaid principal amount of all Loans then outstanding as (b) the
principal amount of its Loan and Sharing Participations prior to such exercise of banker's lien,
setoff or counterclaim or other event was to the principal amount of all Loans outstanding prior
to such exercise of banker's lien, setoff or counterclaim or other event; ry4lell however, that,
if any such purchase or purchases shall be made pursuant to this Section and the payment giving
rise thereto shall thereafter be recovered, such purchase or purchases shall be rescinded to the
extent of such recovery and the purchase price or prices restored without interest. The Borrower
expressly consents to the foregoing arrangements and agrees that any Lender holding a
participation in a Loan deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respectto any and all moneys owing by the Borrower
to such Lender by reason thereof as fully as if such Lender had made a Loan directly to the
Borrower in the amount of such participation.
Section 2.1I Payments.
(a) The Borrower shall make each payment (including for principal of or
interest on the Loans, Fees and other amounts) hereunder and under any other Loan Document
not later than 9:00 a.m., Pacific time, on the date when due in dollars to the Administrative
Agent at its offices at 445 South Figueroa Street, Los Angeles, California 90071, in immediately
available funds.
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601944211v6
(b) Whenever any payment (including for principal of or interest on the
Loans, Fees and other amounts) hereunder or under any other Loan Document shall become due,
or otherwise would occur, on a day that is not a Business Day, such payment may be made on
the next succeeding Business Day, and such extension of time shall in such case be included in
the computation of interest or Fees, if applicable.
Section 2.12 Taxes.
(a) Any and all payments by the Borrower hereunder and under any other
Loan Document shall be made, in accordance with Section2.ll,free and clear of and without
deduction for any and all present or future taxes, levies, imposts, duties, deductions,
withholdings (including back-up withholding), assessments, fees or other charges, and all
liabilities with respect thereto, including any interest, additions to tax or penalties applicable
thereto but excluding (i) taxes imposed on the net income of the Administrative Agent or any
Lender (or any transferee or assignee thereof,, including a participation holder (any such entity
being called a"Transferee")), (ii) franchise taxes imposed on the Administrative Agent or any
Lender (or any Transferee) by the United States or any jurisdiction under the laws of which the
Administrative Agent or any such Lender (or Transferee) or the applicable lending office, is
organized or any political subdivision thereof and (iii) United States Federaltaxes imposed under
FATCA (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Toxes"). If the Borrower shall be required by law to
deduct or withhold any Taxes from or in respect of any sum payable under any Loan Document
to any Lender (or Transferee) or the Administrative Agent, (i) the sum payable shall be increased
by the amount necessary so that after making all required deductions of Taxes (including
deductions applicable to additional sums payable under this Section2.l2) such Lender (or
Transferee) or the Administrative Agent (as the case may be) shall receive an amount equal to
the sum it would have received had no such deductions of Taxes been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxing authority or other Governmental Authority in accordance with applicable law;
provided, however, that no Transferee of any Lender shall be entitled to receive any greater
payment under this paragraph (a) than such Lender would have been entitled to receive with
respect to the rights assigned, participated or otherwise transferred except to the extent that such
greater payment arises from circumstances not in existence at the time such assignment,
participation or transfer shall have been made.
(b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar levies which arise
from any payment made under any Loan Document or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnifu each Lender (or Transferee) and the
Administrative Agent for the full amount of any Taxes and Other Taxes paid by such Lender (or
Transferee) or the Administrative Agent, as the case may be, and any liability (including
penalties, interest and reasonable expenses) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted by the relevant taxing authority
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60194421tv6
or other Governmental Authority. Such indemnification shall be made within 30 days after the
date any Lender (or Transferee) or the Administrative Agent, as the case may be, makes written
demand therefor. If a Lender (or Transferee) or the Administrative Agent shall become aware
that it is entitled to receive a refund in respect of Taxes or Other Taxes as to which it has been
indemnified by the Borrower pursuant to this Section 2.12, it shall promptly notify the Borrower
of the availability of such refund and shall, within 30 days after receipt of a request by the
Borrower, apply for such refund at the Borrower's expense.
(d) If any Lender (or Transferee) or the Administrative Agent receives a
refund in respect of any Taxes or Other Taxes as to which it has been indemnified by the
Borrower pursuant to this Section 2.12, it shall promptly notify the Borrower of such refund and
shall repay such refund to the Borrower (to the extent of amounts that have been paid by the
Borrower underthis Section 2.l2with respect to such refund) within 30 days (or promptly upon
receipt, if the Borrower has requested application for such refund pursuant hereto), net of all
reasonable out-of-pocket expenses of such Lender (or Transferee) or the Administrative Agent
and without interest (other than interest included in such refund); provided that the Borrower,
upon the request of such Lender (or Transferee) or the Administrative Agent, agrees to return
such refund (plus penalties, interest or other charges) to such Lender (or Transferee) or the
Administrative Agent in the event such Lender (or Transferee) or the Administrative Agent is
required to repay such refund. Nothing contained in this paragraph (d) shall require any Lender
(or Transferee) or the Administrative Agent to make available any of its tax returns (or any other
information relating to its taxes which it deems to be confidential); provided that the Borrower,
at its expense, shall have the right to receive an opinion from a firm of independent public
accountants of recognized national standing acceptable to the Borrower that the amount due
hereunder is correctly calculated.
(e) Within 30 days after the date of any payment of Taxes or Other Taxes
withheld by the Borrower in respect of any payment to any Lender (or Transferee) or the
Administrative Agent, the Borrower will furnish to the Administrative Agent, at its address
referred to in Section 10.01, the original or a certified copy of a receipt issued by an appropriate
Governmental Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(0 Without prejudice to the survival of any other agreement contained herein,
the agreements and obligations contained in this Section 2.12 shall survive the payment in full of
the principal of and interest on all Loans made hereunder.
(g) On or prior to the execution of this Agreement and on or before the
transfer to a Transferee, the Administrative Agent shall notifu the Borrower of each Lender's (or
Transferee's) address. On or prior to each Lender's (or Transfereeos) first Interest Payment Date,
and from time to time as required by law, each Lender (or Transferee) that is not a United States
person within the meaning of SectionTT0l (aX30) of the Code (a "Non-U.S. Person") shall, if
legally able to do so, deliver to the Borrower and the Administrative Agent (i) one duly
completed and executed copy of United States Internal Revenue Service Form W-8BEN or W-
8ECI, (ii) if claiming exemption from United States Federal withholding tax pursuant to
Section 871(h) or 881(c) of the Code, one duly completed and executed copy of a United States
60194421lv6
l5
Internal Revenue Service Form W-8BEN and a certificate representing that such Non-U.S.
Person is not a bank for purposes of Section 881(c) of the Code, is not a l0 percent shareholder
(within the meaning of Section 871(hX3Xb) of the Code) of the Borrower and is not a controlled
foreign corporation related to the Borrower (within the meaning of Section 86a(d)(a) of the
Code) or (iii) any successor applicable form of any thereof, establishing in each case that such
Lender (or Transferee) is entitled to receive payments under the Loan Documents payable to it
without deduction or withholding of any United States Federal income taxes, or is subject to a
reduced rate thereof. Unless the Borrower and the Administrative Agent have received forms or
other documents satisfactory to them indicating that such payments under the Loan Documents
to a Lender (or Transferee) that is a Non-U.S. Person are not subject to United States Federal
withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, the
Borrower shall withhold taxes from such payments to such Lender (or Transferee) at the
appl icable statutory rate.
(h) The Borrower shall not be required to pay any additional amounts to any
Lender (or Transferee) in respect of United States Federal withholding tax pursuant to paragraph
(a) above if the obligation to pay such additional amounts would not have arisen but for a failure
by such Lender (or Transferee) to comply with the provisions of paragraph (g) above; pleviidgd,
however, that the Borrower shall be required to pay those amounts to any Lender (or Transferee)
that it was required to pay hereunder prior to the failure of such Lender (or Transferee) to
comply with the provisions of such paragraph (g).
(i) If a payment made to a Lender under any Loan Document would be
subject to United States Federal withholding tax imposed by FATCA if such Lender were to fail
to comply with the applicable reporting requirements of FATCA (including those contained in
Section l47l(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the
Borrower and the Administrative Agent, at the time or times prescribed by law and at such time
or times reasonably requested by the Borrower or the Administrative Agent, such documentation
prescribed by applicable law (including as prescribed by Section l Tl@)(3)(CXi) of the Code)
and such additional documentation reasonably requested by the Borrower or the Administrative
Agent as may be necessary for the Borrower and the Administrative Agent to comply with their
obligations under FATCA and to determine that such Lender has complied with such Lender's
obligations under FATCA or to determine the amount to deduct and withhold from such
payment. Solely for purposes of this paragraph (i), "FATCA" shall include any amendments
made to FATCA after the date of this Agreement.
Section 2.13 Assignment of Loans under Certain Circumstances.
(a) Any Lender (or Transferee) claiming any additional amounts payable
pursuant to Section 2.07 or 2.12 shall use reasonable effons (consistent with legal and regulatory
restrictions) to file any certificate or document requested by the Borrower or to change the
jurisdiction of its applicable lending office if the making of such a filing or change would avoid
the need for or reduce the amount of any such additional amounts which may thereafter accrue or
avoid the circumstances giving rise to such exercise and would not, in the sole determination of
such Lender (or Transferee), be otherwise disadvantageous to such Lender (or Transferee).
601944211v6
t6
(b) In the event that the Borrower shall be required to make additional
payments under Section 2.07 or 2.12 to any Lender (or Transferee) or to the Administrative
Agent with respect to any Lender (or Transferee), the Borrower shall have the right, at its own
expense, upon notice to such Lender (or Transferee) and the Administrative Agent, to require
such Lender (or Transferee) to transfer and assign without recourse (in accordance with and
subject to the restrictions contained in Section 10.04) all its interests, rights and obligations under
the Loan Documents to another financial institution which shall assume such obligations;
provided that (i) no such termination or assignment shall conflict with any law, rule or regulation
or order of any Governmental Authority and (ii) the Borrower or the assignee, as the case may
be, shall pay to the affected Lender (or Transferee) in immediately available funds on the date of
such termination or assignment the principal of and interest accrued to the date of payment on
the Loan made by it hereunder and all other amounts accrued for its account and owed to it under
the Loan Documents.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders that:
Section 3.01 Organization: Powers. Each of the Borrower and the Significant
Subsidiaries (a) is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (b) has all requisite power and authority to own its
property and assets and to carry on its business as now conducted and as proposed to be
conducted, (c) is qualified to do business in every jurisdiction where such qualification is
required, except where the failure so to qualify would not result in a Material Adverse Effect,
and (d) in the case of the Borrower, has the corporate power and authority to execute, deliver and
perform its obligations under each of the Loan Documents and each other agreement or
instrument contemplated thereby to which it is or will be a party and to borrow hereunder.
Section 3.02 Authorization. The execution, delivery and performance by the Borrower
of each of the Loan Documents, and the borrowing of the Loans hereunder (collectively, the
"Transactions"), (a) have been duly authorized by all requisite corporate and, if required,
stockholder action and (b) will not (i) violate (A) any provision of law, statute, rule or regulation
the violation of which could reasonably be expected to impair the validity and enforceability of
this Agreement or any other Loan Document or materially impair the rights of or benefits
available to the Lenders under the Loan Documents, or of the certificate or articles of
incorporation or other constitutive documents or bylaws of the Borrower or any Significant
Subsidiary, @) any order of any Governmental Authority the violation of which could
reasonably be expected to impair the validity or enforceability of this Agreement or any other
Loan Document, or materially impair the rights of or benefits available to the Lenders under the
Loan Documents, or (C) any provision of any indenture or other material agreement or
instrument evidencing or relating to borrowed money to which the Borrower or any Significant
Subsidiary is a party or by which any of them or any of their property is or may be bound in a
manner which could reasonably be expected to impair the validity and enforceability of this
Agreement or any other Loan Document or materially impair the rights of or benefits available to
the Lenders under the Loan Documents, (ii) be in conflict with, result in a breach of or constitute
601944211v6
17
(alone or with notice or lapse of time or both) a default under any such indenture, agreement or
other instrument in a manner which could reasonably be expected to impair the validity and
enforceability of this Agreement or any other Loan Document or materially impair the rights of
or benefits available to the Lenders under the Loan Documents or (iii) result in the creation or
imposition under any such indenture, agreement or other instrument of any Lien upon or with
respect to any property or assets now owned or hereafter acquired by the Borrower.
Section 3.03 Enforceabilitv. This Agreement has been duly executed and delivered by
the Borrower and constitutes, and each other Loan Document when executed and delivered by
the Borrower will constitute, a legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms.
Section 3.04 Governmental Approvals. No action, consent or approval of, registration
or filing with or any other action by any Governmental Authority is or will be required in
connection with the Transactions, except such as have been made or obtained and are in full
force and effect.
Section 3.05 Financial Statements. The Borrower has heretofore furnished to the
Lenders its (a) consolidated balance sheets and statements of income and statements of cash flow
as of and for the fiscal year ended December 31, 2012, audited by and accompanied by the
opinion of Deloitte & Touche LLP, independent public accountants, and (b) unaudited
consolidated balance sheets and statements of income and statements of cash flow as of and for
the fiscal quarter ended June 30,2013, certified by a Financial Officer of the Borrower. All such
financial statements present fairly the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance
with GAAP consistently applied, subject to normal year-end audit adjustments and the absence
of footnotes in the case of the financial statements referred to in clause (b) above. Such balance
sheets and the notes thereto, together with the Borrower's Annual Report on Form 10-K for the
fiscal year ended December 31,2072, reflect all liabilities, direct or contingent, of the Borrower
and its consolidated Subsidiaries as of the dates thereof which are material on a consolidated
basis. Such financial statements were prepared in accordance with GAAP applied (except as
noted therein) on a consistent basis.
Section 3.06 No Material Adverse Change. Except as disclosed in the Borrower's
Annual Report on Form l0-K for the fiscal year ended December 31,2012 and in any document
filed after December 31,2012 but prior to the date of this Agreement pursuant to Section l3(a),
14 or 15(d) of the Securities Exchange Act of 1934, there has been no change in the business,
assets, operations or financial condition of the Borrower and the Subsidiaries, taken as a whole,
since December 3l ,2012 which could reasonably be expected to have a Material Adverse Effect.
For the avoidance of doubt, the representation set forth in this Section 3.06 is and will be made
solely at and as of the Closing Date.
Section 3.07 Litieation: Compliance with Laws.
(a) Except as set forth in the Annual Report of the Borrower on Form l0-K
for the year ended December 31,2012 or in any document filed after December 31,2012 but
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601944211v6
prior to the date of this Agreement pursuant to Section 13(a), 14 or 15(d) of the Securities
Exchange Act of 1934, there are not any actions, suits or proceedings at law or in equity or by or
before any Governmental Authority now pending or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any Subsidiary or any business, property or rights
of any such person (i) which involve any Loan Document or the Transactions or (ii) which could
reasonably be anticipated, individually or in the aggregate, to result in a Material Adverse Effect.
(b) Neither the Borrower nor any of the Subsidiaries is in violation of any law,
rule or regulation, or in default with respect to any judgment, writ, injunction or decree of any
Governmental Authority, where such violation or default would be reasonably likely to result in
a Material Adverse Effect.
Section 3.08 Federal Reserve Resulations.
(a) Neither the Borrower nor any of the Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to purchase or carry Margin
Stock or to extend credit to others for the purpose of purchasing or carrying Margin Stock or to
refund indebtedness originally incurred for such purpose, or (ii) for any purpose which entails a
violation of, or which is inconsistent with, any of the provisions of the Regulations of the Board,
including Regulations U and X.
Section 3.09 Investment Company Act. The Borrower is not an o'investment company"
as defined in, or subject to regulation under, the Investment Company Act of 1940.
Section 3.10 No Material Misstatements. No information, report, financial statement,
exhibit or schedule furnished by or on behalf of the Borrower to the Administrative Agent or any
Lender in connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto contained, contains or will contain any material misstatement of fact
or, when considered together with all reports theretofore filed with the Securities and Exchange
Commission, omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were, are or will be made,
not misleading.
Section 3.1I Employee Benefit Plans. Each employee benefit plan (as defined in
ERISA Section 3(3)) sponsored by the Borrower or an ERISA Affiliate or to which the Borrower
or an ERISA Affiliate is required to make contributions is in compliance in all material respects
with the applicable provisions of ERISA and the regulations and published interpretations
thereunder. No Reportable Event has occurred as to which the Borrower or any ERISA Affiliate
was required to file a report with the PBGC. The value of the assets of each Plan is at least 80%o
of the "funding target" (as defined in Code Section 430(dxl) of such Plan as of the most recent
annual valuation date applicable thereto.
60194421 lv6
l9
Section 3.12 Environmental and Safety Matters. Each of the Borrower and the
Subsidiaries has complied with all Federal, state, local and other statutes, ordinances, orders,
judgments, rulings and regulations relating to environmental pollution or to environmental or
nuclear regulation or control or to employee health or safety, except where noncompliance would
not be reasonably likely to result in a Material Adverse Effect. Neither the Borrower nor any
Subsidiary has received notice of any failure so to comply, except where noncompliance would
not be reasonably likely to result in a Material Adverse Effect. The Borrower's and the
Subsidiaries' plants do not manage any hazardous wastes, hazardous substances, hazardous
materials, toxic substances, toxic pollutants or substances similarly denominated, as those terms
or similar terms are used in the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the Clean Water Act or
any other applicable law relating to environmental pollution or employee health and safety, or
any nuclear fuel or other radioactive materials, in all cases in violation of any law or any
regulations promulgated pursuant thereto, where such violation would be reasonably likely to
result in a Material Adverse Effect. The Borrower is aware of no events, conditions or
circumstances involving environmental pollution or contamination or employee health or safety
that could reasonably be expected to result in a Material Adverse Effect. The representations and
warranties set forth in this Section 3.12 are, however, subject to any matters, circumstances or
events set forth in the Borrower's Annual Report on Form l0-K for the fiscal year ended
December 31, 2012 and in any document filed after December 3l , 2012 but prior to the date of
this Agreement pursuant to Section l3(a), 14 or l5(d) of the Securities Exchange Act of 1934;
ry4led, however, that the inclusion of such matters, circumstances or events as exceptions (or
any other exceptions contained in the representations and warranties which refer to the
Borrower's Annual Report on Form 10-K for the fiscal year ended December 31,2012 or in any
document filed after December 31, 2012 but prior to the date of this Agreement pursuant to
Section 13(a), 14 or l5(d) of the Securities Exchange Act of 1934) shall not be construed to
mean that the Borrower has concluded that any such matter, circumstance or effect is likely to
result in a Material Adverse Effect.
Section3.13 Significant Subsidiaries. Schedule 3.13 sets forth as of the date hereof a
list of all Significant Subsidiaries of the Borrower and the percentage ownership interest of the
Borrower therein.
ARTICLE IV
CONDITIONS TO BORROWING
Section 4.01 Borrowine. The obligations of the Lenders to make the Loans on the
Closing Date are subject to the satisfaction of the following conditions on or before the Closing
Date:
(a) The representations and warranties set forth in Article III hereof shall be
true and correct in all material respects on and as of the Closing Date, with the same effect as
though made on and as of the Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date; pfqvldecl, however, that the borrowing of the Loans
601944211v6
on the Closing Date shall be deemed to constitute a representation and warranty by the Borrower
on the Closing Date as to the maffers specified in this paragraph (b) and in paragraph (c) below.
(b) The Borrower shall be in compliance with all the terms and provisions set
forth herein and in each other Loan Document on its part to be observed or performed, and no
Event of Default or Default shall have occurred and be continuing at the time of and immediately
after the borrowing of the Loans.
(c) The Administrative Agent shall have received each of the following, each
dated the Closing Date unless otherwise specified and otherwise in form and substance
satisfactory to the Administrative Agent:
(i) Opinions of Davis Wright Tremaine LLP, counsel to the Borrower,
Hawley Troxell Ennis & Hawley LLP, Idaho counselto the Borrower, and Crowley Fleck PLLP,
Montana counsel to the Borrower (or such other firm or firms approved by the Administrative
Agent), each addressed to the Administrative Agent and the Lenders (or, in the case of the latter
two opinions, addressed to Davis Wright Tremaine LLP), with respect to such matters relating to
the Borrower and the Loan Documents as the Administrative Agent or any Lender may
reasonably request. The Borrower hereby instructs such counsel to deliver such opinion to the
Administrative Agent.
(ii) Evidence satisfactory to the Administrative Agent, dated on or
before the Closing Date and set forth on Schedule a.Ol(c)(ii), that the Borrower shall have
obtained all consents and approvals of, and shall have made all filings and registrations with, any
Govemmental Authority required in order to consummate the Transactions, in each case without
the imposition of any condition which, in the judgment of any Lender, could adversely affect its
rights or interests under the Loan Documents.
(iii) A copy of the articles of incorporation of the Borrower (as most
recently amended and restated), including all amendments thereto, certified as of a recent date by
the Secretary of State of the State of Washington, and certificates as to the good standing and tax
status of the Borrower, each as of a recent date, from the appropriate Governmental Authorities
of the States of Washington, Idaho, Montana and Oregon.
(iv) A certificate of the Secretary or Assistant Secretary of the
Borrower certifying (A) that attached thereto is a true and complete copy of the restated articles
of incorporation and the bylaws of the Borrower as in effect on the Closing Date and at all times
since a date prior to the date of the resolutions described in clause (B) below, (B) that attached
thereto is a true and complete copy of resolutions duly adopted by the board of directors of the
Borrower authorizing the execution, delivery and performance of the Loan Documents and the
borrowing of the Loans hereunder, and that such resolutions have not been modified, rescinded
or amended and are in full force and effect, (C) that the articles of incorporation of the Borrower
have not been amended since the date of the most recent amendment thereto shown on the
certification with respect thereto furnished pursuant to clause (iii) above, and (D) as to the
incumbency and specimen signature of each officer executing any Loan Document or any other
document delivered in connection therewith on behalf of the Borrower.
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2t
(v) A certificate of another officer of the Borrower as to the
incumbency and specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to clause (iv) above.
(vi) A certificate, signed by a Financial Officer of the Borrower,
confirming compliance with the conditions precedent set forth in paragraphs (a) and (b) of this
Section 4.01.
(vii) This Agreement, the Supplemental Indenture, the Bond Delivery
Agreement, the First Mortgage Bond and any Notes requested by the Lenders for issuance on the
Closing Date, duly executed and delivered by all parties thereto, together with a copy of the bond
application (including all attachments thereto) relating to the First Mortgage Bond.
(viii) A copy of the First Mortgage, certified by a Financial Officer of
the Borrower.
(ix) A copy of title insurance policy No. NSL 31426-SEA issued by
First American Title Insurance Company, together with copies of all endorsements thereto
(including an endorsement extending the coverage of such policy to the Supplemental Indenture
and the First Mortgage Bond), naming the trustee under the First Mortgage as the insured,
insuring the Borrower's title to the real property subject to the Lien of the First Mortgage, and
the validity and first priority of the Lien of the First Mortgage securing the First Mortgage Bond
(subject to Liens permitted to exist by the terms of the First Mortgage), in an amount not less
than $785,000,000, certified by a Financial Officer of the Borrower.
(x) Letter agreements between the Borrower and Union Bank
concerning (A) the fees payable to the Administrative Agent pursuant to Section 2.03(a) and (B)
the fee payable to Union Bank as "Lead Arranger."
(xi) Such other documents as the Administrative Agent, any Lender or
legal counsel to any of the foregoing may reasonably request.
(d) All fees payable by the Borrower to the Administrative Agent, to Union
Bank as "Lead Arranger" or to any of their respective Affiliates on or prior to the Closing Date
with respect to this Agreement, and all amounts payable by the Borrower pursuant to
Section 10.05 for which invoices have been delivered to the Borrower on or prior to the Closing
Date, shall have been paid in full or arrangements satisfactory to the Administrative Agent shall
have been made to cause them to be paid in full concurrently with the disbursement of the
proceeds ofthe Loans.
(e) All legal matters incident to the Loan Documents and the transactions
contemplated thereby shall be reasonably satisfactory to the Administrative Agent, the Lenders
and their respective legal counsel.
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22
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender that, so long as the principal of or
interest on any Loan, any Fees or any other amounts payable under any Loan Document shall be
unpaid:
Section 5.01 Existence: Businesses and Properties.
(a) The Borrower shall, and shall cause each Significant Subsidiary to, do or
cause to be done all things necessary to preserve, renew and keep in full force and effect its legal
existence, except as otherwise expressly permitted under Section 6.03.
(b) The Borrower shall, and shall cause each Significant Subsidiary to, (i) do
or cause to be done all things necessary to obtain, preserve, renew, extend and keep in full force
and effect the rights, licenses, permits, franchises, authorizations, patents, copyrights, trademarks
and trade names utilized in the conduct of its business, except where the failure so to obtain,
preserve, renew, extend or maintain any of the foregoing would not result in a Material Adverse
Effect; (ii) maintain and operate its business in substantially the manner in which it is presently
conducted and operated, except as otherwise expressly permitted under this Agreement;
(iii) comply in all material respects with all applicable laws, rules, regulations and orders of any
Governmental Authority, whether now in effect or hereafter enacted, if failure to comply with
such requirements would result in a Material Adverse Effect; and (iv) at all times maintain and
preserve all property material to the conduct of its business and keep such property in good
repair, working order and condition and from time to time make, or cause to be made, all needful
and proper repairs, renewals, additions, improvements and replacements thereto necessary in
order that the business carried on in connection therewith may be properly conducted at all
times; ry!g!e!l, however, that the Borrower or any Significant Subsidiary may cause the
discontinuance of the operation or a reduction in the capacity of any of its facilities, or any
element or unit thereof, including real and personal properties, facilities, machinery and
equipment, (A) if in the judgment of the Borrower or such Significant Subsidiary, it is no longer
advisable to operate the same, or to operate the same at its former capacity, and such
discontinuance or reduction would not result in a Material Adverse Effect, or (B) if the Borrower
or a Significant Subsidiary intends to sell and dispose of its interest in the same in accordance
with the terms of this Agreement and within a reasonable time shall endeavor to effectuate the
same.
Section 5.02 Insurance.
(a) The Borrower shall, and shall cause each Significant Subsidiary to,
(i) maintain insurance, to such extent and against such risks, as is customary with companies in
the same or similar businesses and owning similar properties in the same general area in which it
operates and (ii) maintain such other insurance as may be required by law. All insurance required
by this Section 5.02 shall be maintained with financially sound and reputable insurers or through
self-insurance; rylded, however, that the portion of such insurance constituting self-insurance
shall be comparable to that usually maintained by companies engaged in the same or similar
601944211v6
23
businesses and owning similar properties in the same general area in which the Borrower or such
Significant Subsidiary, as applicable, operates and the reserves maintained with respect to such
self-insured amounts are deemed adequate by its officer or officers responsible for insurance
matters.
Section 5.03 Taxes and Oblisations. The Borrower shall, and shall cause each
Significant Subsidiary to, pay and discharge promptly when due all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as all lawful claims for
labor, materials and supplies or otherwise which, if unpaid, might give rise to a Lien upon such
properties or any part thereof; ry4!91[, however, that such payment and discharge shall not be
required with respect to any such tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings and the Borrower
shall, to the extent required by GAAP, have set aside on its books adequate reserves with respect
thereto.
Section 5.04 Financial Statements. Reports. Etc. The Borrower shall furnish to the
Administrative Agent and each Lender:
(a) within 105 days after the end of each fiscal year of the Borrower,
consolidated and consolidating balance sheets and related statements of income and statements
of cash flow, showing the financial condition of the Borrower and its consolidated Subsidiaries
as of the close of such fiscalyear and the results of their operations during such year, all audited
by Deloitte & Touche LLP or other independent public accountants of recognized national
standing acceptable to the Required Lenders and accompanied by an opinion of such accountants
(which shall not be qualified in any material respect) to the effect that such consolidated
financial statements fairly present the financial condition and results of operations of the
Borrower on a consolidated basis (except as noted therein) in accordance with GAAP
consistently applied; pfev_idgd, however, that the Borrower shall be deemed to have satisfied the
requirement to furnish such financial statements and opinion if and to the extent that the
Borrower has, within the period specified above, (i) filed documents meeting the requirements
set forth above with the Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission, and (ii) posted such documents on
the Borrower's home page on the worldwide web (at the date of this Agreement, located at
hup//www.avistacorp.com) (such filing and posting being referred to as "Electronic Delivery");
(b) within 50 days after the end of each of the first three fiscal quarters of
each fiscal year of the Borrower, consolidated and, to the extent otherwise available,
consolidating balance sheets and related statements of income and statements of cash flow,
showing the financial condition of the Borrower and its consolidated Subsidiaries as of the close
of such fiscal quarter and the results of their operations during such fiscal quarter and the then
elapsed portion of the fiscal year, all certified by a Financial Officer of the Borrower as fairly
presenting the financial condition and results of operations of the Borrower on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end audit
adjustments; provided, however, that the Borrower shall be deemed to have satisfied the
601944211v6
24
requirement to furnish such financial statements and certification if and to the extent that the
Borrower has, within the period specified above, made Electronic Delivery thereof;
(c) concurrently with any delivery of financial statements under (a) or (b)
above, (i) a certificate of the relevant accounting firm opining on or certifling such statements or
of a Financial Officer of the Borrower (which certificate, when furnished by an accounting firm,
may be limited to accounting matters and disclaim responsibility for legal interpretations)
certifying that, to the knowledge of the accounting firm or the Financial Officer, as the case may
be, no Event of Default or Default has occurred or, if an Event of Default or Default has
occurred, specifying the nature and extent thereofand any corrective action taken or proposed to
be taken with respect thereto, and (ii) a certificate of a Financial Officer of the Borrower setting
forth in reasonable detail such calculations as are required to establish whether the Borrower was
in compliance with Section 6.05 on the date of such financialstatements;
(d) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by it with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any of or all the functions
of said Commission, or with any national securities exchange, or distributed to its shareholders,
as the case may be; provided, however, that the Borrower shall be deemed to have satisfied the
requirement to furnish such reports, statements and other materials if and to the extent that the
Borrower has, within the period specified above, made Electronic Delivery thereof; and
(e) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower or any Significant
Subsidiary, or compliance with the terms of any Loan Document, as the Administrative Agent or
any Lender may reasonably request.
Section 5.05 Litigation and Other Notices. The Borrower shall furnish to the
Administrative Agent and each Lender prompt notice of the following:
(a) any Event of Default or Default, specifying the nature and extent thereof
and the corrective action (if any) proposed to be taken with respect thereto;
(b) the filing or commencement of, or any written threat or notice of intention
of any person to file or commence, any action, suit or proceeding, whether at law or in equity or
by or before any Governmental Authority, against the Borrower or any Subsidiary which could
reasonably be anticipated to result in a Material Adverse Effect; and
(c) any development that has resulted in, or could reasonably be anticipated to
result in, a Material Adverse Effect.
Section 5.06 ERISA. The Borrower shall, and shall cause each Significant Subsidiary
to, maintain all employee benefit plans (as defined in ERISA Section 3(3)) sponsored by the
Borrower or an ERISA Affiliate or to which the Borrower or an ERISA Affiliate is required to
make contributions, in all material respects, in compliance with the applicable provisions of
ERISA, and the Borrower shall furnish to the Administrative Agent and each Lender (a) as soon
601944211v6
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as possible, and in any event within 30 days after any Responsible Officer of the Borrower or
any ERISA Affiliate either knows or has reason to know that any Reportable Event has occurred
that alone or together with any other Reportable Event could reasonably be expected to result in
liability of the Borrower to the PBGC in an aggregate amount exceeding $25,000,000, a
statement of a Financial Officer of the Borrower setting forth details as to such Reportable Event
and the action proposed to be taken with respect thereto, together with a copy of the notice, if
any, of such Reportable Event given to the PBGC, (b) as soon as possible, and in any event
within 30 days after any Responsible Officer of the Borrower or any ERISA Affiliate either
knows or has reason to know that the value of the assets of any Plan is less than 80% of the
"funding target" (as defined in Code Section 430(dX1) of such Plan as of the most recent annual
valuation date applicable thereto, a statement of a Financial Officer of the Borrower setting forth
details as to such event, (c) promptly after receipt thereof, a copy of any notice the Borrower or
any ERISA Affiliate may receive from the PBGC relating to the intention of the PBGC to
terminate any Plan or Plans (other than a Plan maintained by an ERISA Affiliate which is
considered an ENSA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code) or to appoint a trustee to administer any Plan or Plans and (d) within l0 days after the due
date for filing with the PBGC pursuant to Section 430(k) of the Code of a notice of failure to
make a required installment or other payment with respect to a Plan, a statement of a Financial
Officer of the Borrower setting forth details as to such failure and the action proposed to be taken
with respect thereto, together with a copy of such notice given to the PBGC.
Section 5.07 Maintaining Records: Access to Properties and Inspections. The Borrower
shall, and shall cause each Significant Subsidiary to, (a) maintain all financial records in
accordance with GAAP and (b) permit any representatives designated by the Administrative
Agent or any Lender to visit and inspect its financial records and properties at reasonable times
and as often as requested and to make extracts from and copies of such financial records, and
permit any representatives designated by the Administrative Agent or any Lender to discuss its
affairs, finances and condition with its chief financial officer, or other person designated by the
chief fi nancial offi cer, and independent accountants therefor.
Section 5.08 Use of Proceeds. The Borrower shall use the proceeds of the Loans only
for the purposes set forth in the preamble to this Agreement.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender that, so long as the principal of or
interest on any Loan, any Fees or any other amounts payable under any Loan Document shall be
unpaid:
Section 6.01 Liens. The Borrower shall not create, incur, assume or permitto exist any
Lien on any property or assets (including stock or other securities of any person, including any
Subsidiary) now owned or hereafter acquired by it or on any income or revenues or rights in
respect ofany thereof, except:
60194421lv6
26
(a) Liens on property or assets of the Borrower created by the documents,
instruments or agreements existing on the date hereof and which are listed as exhibits to the
Borrower's Annual Report on Form lO-K for the fiscal year ended December 31,2012, to the
extent that such Liens secure only obligations arising under such existing documents, agreements
or instruments and the amount of Indebtedness secured thereby does not exceed the amount
thereof as of the date hereof as set forth on Schedule 6.0 I ;
(b) any Lien existing on any property or asset prior to the acquisition thereof
by the Borrower; provided that (i) such Lien is not created in contemplation of or in connection
with such acquisition and (ii) such Lien does not apply to any other property or assets of the
Borrower;
(c) the Lien of the First Mortgage and the Lien of any collateral trust
mortgage or similar instrument which would be intended to eventually replace (in one
transaction or a series of transactions) the First Mortgage (as amended, modified or
supplemented from time to time, "Collateral Trust Mortgagd') on properties or assets of the
Borrower to secure bonds, notes and other obligations of the Borrower but only to the extent
such Liens, collectively, secure Indebtedness, whether now existing or hereafter created, in an
aggregate amount no greater than the aggregate amount of first mortgage bonds permitted to be
issued under the First Mortgage;
(d) Liens not prohibited under the First Mortgage or the Collateral Trust
Mortgage (whether or not such Liens cover properties or assets subject to the Lien of the First
Mortgage or the Collateral Trust Mortgage);
(e) Liens for taxes, assessments or governmental charges not yet due or which
are being contested in compliance with Section 5.03;
(0 carriers', warehousemen's, mechanic's, materialmen's, repairmen's or
other like Liens arising in the ordinary course of business and securing obligations that are not
due or which are being contested in compliance with Section 5.03;
(g) pledges and deposits made in the ordinary course of business in
compliance with workmen's compensation, unemployment insurance and other social security
laws or regulations;
(h) Liens incurred or created in connection with or to secure the performance
ofbids, tenders, trade contracts (other than for Indebtedness), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(i) zoning restrictions, easements, rights-of-way, restrictions on use of real
property and other similar encumbrances incurred in the ordinary course of business which, in
the aggregate, are not substantial in amount and do not materially detract from the value of the
property subject thereto or interfere with the ordinary conduct of the business of the Borrower or
any of its Subsidiaries;
601944211v6
27
C) Liens (i) which secure obligations not assumed by the Borrower and on
account of which the Borrower has not paid and does not expect to pay interest directly or
indirectly and (ii) which exist upon real estate or rights in or relating to real estate in respect of
which the Borrower has a right-of-way or other easement for purposes of substations or
transmission or distribution facilities;
(k) rights reserved to or vested in any federal, state or local governmental
body or agency by the terms of any right, power, franchise, grant, license, contract or permit, or
by any provision of law, to recapture or to purchase, or designate a purchase of or order the sale
of, any property of the Borrower or to terminate any such right, power, franchise, grant, license,
contract or permit before the expiration thereof;
(l) Liens ofjudgments covered by insurance, or upon appeal and covered by
bond, or to the extent not so covered not exceeding at one time $40,000,000 in aggregate
amount;
(m) any Liens, moneys sufficient for the discharge of which shall have been
deposited in trust with the trustee or mortgagee under the instrument evidencing such Lien, with
irrevocable authority of such trustee or mortgagee to apply such moneys to the discharge of such
Lien to the extent required for such purpose;
(n) rights reserved to or vested in any federal, state or local governmental
body or agency or other public authority to control or regulate the business or property of the
Borrower;
(o) any obligations or duties affecting the property of the Borrower to any
federal, state or local governmental body or agency or other public authority with respect to any
authorization, permit, consent or license of such body, agency or authority, given in connection
with the purchase, construction, equipping, testing and operation of the Borrower's utility
property;
(p) with respect to any property which the Borrower may hereafter acquire,
any exceptions or reservations therefrom existing at the time of such acquisition or any terms,
conditions, agreements, covenants, exceptions and reservations expressed or provided in the
deeds or other instruments, respectively, under and by virtue of which the Borrower shall
hereafter acquire such property, none of which terms, conditions, agreements, covenants,
exceptions and reservations materially impairs the use of such property for the purposes for
which it is acquired by the Borrower;
(q) leases and subleases entered into in the ordinary course ofbusiness;
G) banker's Liens and other Liens in the nature of a right of setoff;
(s) renewals, replacements, amendments, modifications, supplements,
refinancings or extensions of Liens set forth in clauses (a)-(d) above to the extent that the
601944211v6
28
principal amount of Indebtedness secured by such Lien immediately prior thereto is not
increased and such Lien is not extended to other property;
(t) security deposits or amounts paid into trust funds for the reclamation of
mining properties;
(u) restrictions on transfer or use of properties and assets, first rights of
refusal, and rights to acquire properties and assets granted to others;
(v) non-consensual equitable Liens on the Borrower's tenant-in-common or
other interest injoint projects;
(w) Liens on the Borrower's tenant-in-common or other interest in joint
projects incurred by the project sponsor without the express consent of the Borrower to such
incurrence;
(x)
this Agreement; and
cash collateral in favor of the Administrative Agent as contemplated by
Liens on receivables and related properties or interests therein.(v)
Section 6.02 Sale-Leaseback Transactions. The Borrower shall not enter into any Sale-
Leaseback if as a result thereof the aggregate outstanding principal amount of Attributable Debt
outstanding in connection with all Sale-Leasebacks entered into after the date hereof would
exceed 5%o of the total tangible assets of the Borrower as of the date of the financial statements
most recently delivered under Section 5.04(a) or (b) at such time.
Section 6.03 Mergers. Consolidations and Acquisitions. The Borrower shall not, and
shall not permit any Significant Subsidiary (without the consent of the Required Lenders, not to
be unreasonably withheld) to, merge with or into or consolidate with any other person, or
purchase, lease or otherwise acquire (in one transaction or a series of transactions) all or
substantially all of the assets of any other person (whether directly by purchase, lease or other
acquisition of all or substantially all of the assets of such person or indirectly by purchase or
other acquisition of all or substantially all of the capital stock of such other person) other than
acquisitions in the ordinary course of the Borrower's or such Significant Subsidiary's business,
except that, if at the time thereof and immediately after giving effect thereto no Event of Default
or Default shall have occurred and be continuing, (a) the Borrower or any Significant Subsidiary
may merge with or into or consolidate with the Borrower or any Subsidiary, provided that, in any
transaction involving the Borrower, the Borrower is the surviving person, (b) the Borrower or
any Significant Subsidiary may purchase, lease or otherwise acquire from any Subsidiary all or
substantially all of its assets, (c) the Borrower may merge with or into or consolidate with any
other person so long as (i) in the case where the business of such other person, or an Affiliate of
such other person, entirely or primarily consists of an electric or gas utility business, (A) if the
Borrower is the surviving person, then, immediately after such merger or consolidation, the
Senior Debt Rating assigned to the applicable Indebtedness of the Borrower by two nationally
recognized credit-rating agencies shall be equal to or higher than Lowest Investment Grade and
601944211v6
29
(B) if the Borrower is not the surviving person, (l) the surviving person shall assume in writing
the obligations of the Borrower under this Agreement and any other Loan Documents and
(2) immediately after such merger or consolidation, the ratings assigned to the most senior
secured public Indebtedness of the surviving person by two nationally recognized credit rating
agencies shall be equal to or higher than the ratings comparable to the Second Lowest
Investment Grade, and (ii) in the case where such other person's business does not entirely or
primarily consist of an electric or gas utility business, (A) the assets of such person at the time of
such consolidation or merger do not exceed l0%o of the total assets of the Borrower and its
Subsidiaries after giving effect to such merger or consolidation, computed and consolidated in
accordance with GAAP consistently applied, and (B) if the Borrower is not the surviving person,
the surviving person shall assume in writing the obligations of the Borrower under this
Agreement and the other Loan Documents, (d) the Borrower may purchase, lease or otherwise
acquire all or substantially all of the assets of any other person (including by purchase or other
acquisition of all or substantially all of the capital stock of such person) so long as (i) the assets
being purchased, leased or acquired (or the assets of the person whose capital stock is being
acquired) entirely or primarily consist of electric or gas utility assets or (ii) in the case where the
assets being purchased, leased or acquired (or the assets of the person whose capital stock is
being acquired) do not entirely or primarily consist of electric or gas utility assets, the assets
being purchased, leased or acquired (or the Borrower's proportionate share of the assets of the
person whose capital stock is being acquired) do not exceed lUYo of the total assets of the
Borrower and its Subsidiaries, after giving effect to such purchase, lease or acquisition,
computed and consolidated in accordance with GAAP consistently applied, (e) any Significant
Subsidiary may merge with or into or consolidate with any other person so long as the assets of
such person at the time of such merger or consolidation do not exceed l0% of the total assets of
the Borrower and its Subsidiaries after giving effect to such merger or consolidation, computed
and consolidated in accordance with GAAP consistently applied, and (f) any Significant
Subsidiary may purchase, lease or otherwise acquire all or substantially all of the assets of any
other person (including by purchase or other acquisition of all or substantially all of the capital
stock ofsuch person) so long as the assets being purchased, leased or acquired (or the Significant
Subsidiary's proportionate share of the assets of the person whose capital stock is being
acquired) do not exceed l0% of the total assets of the Borrower and its Subsidiaries after giving
effect to such purchase, lease or acquisition, computed and consolidated in accordance with
GAAP consistently applied; provided, however, that notwithstanding anything in this
Section 6.03 to the contrary, this Section 6.03 shall not be deemed to prohibit any merger,
consolidation or acquisition involving a Significant Subsidiary (and not also the Borrower) if,
after giving effect to the consummation of such transaction, such Significant Subsidiary shall
have or be deemed to have a ratio of total long-term Indebtedness to total stockholders' equity
equal to or less than 1.857 to 1.0.
Section 6.04 Disposition of Assets. The Borrower shall not, and shall not permit any
Significant Subsidiary (without the consent of the Required Lenders, not to be unreasonably
withheld) to, sell, lease, transfer, assign or otherwise dispose of any assets or any interest therein
(whether now owned or hereafter acquired), except (a) dispositions of obsolete or retired
property not used or useful in its business, (b) grants of Liens by the Borrower permitted under
Section 6.01 and grants of Liens by Significant Subsidiaries, (c) disposition by the Borrower of
its interest in the Washington Public Power Supply System Nuclear Project No. 3 in accordance
601944211v6
30
with the settlement agreement among the Borrower, the Washington Public Power Supply
System and Bonneville Power Administration, as the same may be amended, modified or
supplemented from time to time, (d) disposition by the Borrower of all or any portion of its
transmission assets in one or more RTO Transactions, (e) disposition by the Borrower of its
interests in the Colstrip Project and related assets, (f) disposition of receivables and related
properties or interests therein, (g) other dispositions of assets (not otherwise permitted by clauses
(a)-(0 of this Section) made in the ordinary course of business not exceeding in any fiscal year
5%o of the assets of the Borrower and its Subsidiaries as of the end of the prior fiscal year,
computed and consolidated in accordance with GAAP consistently applied, and (h) other
dispositions of assets (not otherwise permitted by clauses (a)-(f) of this Section) not exceeding in
any fiscal year lUYo of the assets of the Borrower and its Subsidiaries as of the end of the prior
fiscal year, computed and consolidated in accordance with GAAP consistently applied; provided,
however, that notwithstanding anything in this Section 6.04 to the contrary, this Section 6.04
shall not be deemed to prohibit any disposition by a Significant Subsidiary if, after giving effect
to the consummation of such transaction, such Significant Subsidiary shall have or be deemed to
have a ratio of total long-term Indebtedness to total stockholders' equity equal to or less than
1.857 to 1.0.
Section 6.05 Consolidated Total Debt to Consolidated Total Capitalization Ratio. The
Borrower shall not permit the ratio of Consolidated Total Debt to Consolidated Total
Capitalization to be, at any time, greater than 0.65 to L00.
Section 6.06 Public Utility Regulatory Borrowing Limits. The Borrower shall not incur
actual borrowings or commitments or issued and outstanding debt of the Borrower in excess of
the amount authorized by statute or by orders of public utility commissions, as in effect from
time to time.
ARTICLE VII
EVENTS OF DEFAULT
In case of the happening (and during the continuance) of any of the following events
("Events of Default"):
(a) any representation or warranty made or deemed made in or in connection
with any Loan Document or the borrowing of the Loans, or any representation or warranty
contained in any certificate or other document fumished in connection with or pursuant to any
Loan Document, shall prove to have been false or misleading in any material respect when so
made or deemed made;
(b) default shall be made in the payment of any principal of any Loan when
and as the same shall become due and payable, whether at a date fixed for prepayment thereof or
on the Maturity Date or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on any Loan or any
Fee or other amount (other than an amount referred to in (b) above) due under any Loan
601944211v6
3l
Document, when and as the same shall become due and payable, and such default shall continue
unremedied for a period of five Business Days;
(d) default shall be made in the due observance or performance by the
Borrower of any covenant, condition or agreement contained in Section 5.01(a), 5.05, 5.07(b) or
5.08 or in Article Vl;
(e) default shall be made in the due observance or performance by the
Borrower of any covenant, condition or agreement (other than those specified in (b), (c) or (d)
above) contained in any Loan Document, and such default shall continue unremedied for a
period of 30 days after notice thereof from the Administrative Agent or any Lender to the
Borrower;
(0 the Borrower or any Significant Subsidiary shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any Indebtedness when the
aggregate unpaid principal amount is in excess of $40,000,000, when and as the same shall
become due and payable (after expiration of any applicable grace period), or (ii) fail to observe
or perform any other term, covenant, condition or agreement (after expiration of any applicable
grace period) contained in any agreement or instrument evidencing or governing any such
Indebtedness if the effect of any failure referred to in this clause (ii) is to cause, or to permit the
holder or holders of such Indebtedness or a trustee on its or their behalf (with or without the
giving of notice, the lapse of time or both) to cause, such Indebtedness to become due prior to its
stated maturity;
(g) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in respect of the Borrower or
any Significant Subsidiary, or of a substantial part of the property or assets of the Borrower or a
Significant Subsidiary, under Title I I of the United States Code, as now constituted or hereafter
amended, or any other Federal or state bankruptcy, insolvency, receivership or similar law,
(ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Significant Subsidiary or for a substantial part of the property or assets
of the Borrower or a Significant Subsidiary or (iii) the winding-up or liquidation of the Borrower
or any Significant Subsidiary; and such proceeding or petition shall continue undismissed, or an
order or decree approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of 60 or more days;
(h) the Borrower or any Significant Subsidiary shall (i) voluntarily commence
any proceeding or file any petition seeking relief under Title l1 of the United States Code, as
now constituted or hereafter amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of,, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in (g) above,
(iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Significant Subsidiary or for a substantial
part of the property or assets of the Borrower or any Significant Subsidiary, (iv) file an answer
admitting the material allegations of a petition filed against it in any such proceeding, (v) make a
general assignment forthe benefit of creditors, (vi)become unable, admit in writing its inability
601944211v6
32
or fail generally to pay its debts as they become due or (vii) take any action for the purpose of
effecting any of the foregoing;
(i) a final judgment or judgments shall be rendered against the Borrower, any
Significant Subsidiary or any combination thereof for the payment of money with respect to
which an aggregate amount in excess of $40,000,000 is not covered by insurance, and the same
shall remain undischarged for a period of 30 consecutive days during which execution shall not
be effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon
assets or properties of the Borrower or any Significant Subsidiary to enforce any such judgment;
0) a Reportable Event or Reportable Events, and/or a failure to make a
required installment or other payment (giving rise to a Lien in favor of the affected Plan or Plans
under Section 430(kxl) of the Code), shall have occurred with respect to any Plan or Plans that
together could reasonably be expected to result in liability of the Borrower to the PBGC or to
any Plan or Plans in an aggregate amount exceeding $25,000,000, or the value of the assets of
any Plan is less thanS0o/o of the "fundingtarget" (as defined in Code Section 430(dxl)) of such
Plan as of the most recent annual valuation date applicable thereto, and within 30 days afterthe
reporting of any such Reportable Event to the Administrative Agent or after the receipt by the
Administrative Agent of a statement required pursuant to Section 5.06, the Administrative Agent
shall have notified the Borrower in writing that (i) the Required Lenders have made a
determination that, on the basis of such Reportable Event or Reportable Events, such failure to
make a required installment or other payment or the fact that the value of the assets of a Plan is
less than 80% of the "funding target" (as defined in Code Section 430(dxl)) of such Plan as of
the most recent annual valuation date applicable thereto, there are reasonable grounds (A) for the
termination of any such Plan by the PBGC, (B) for the appointment by the appropriate United
States District Court of a trustee to administer any such Plan or (C) for the imposition of a Lien
in favor of any such Plan, and (ii) as a result thereof an Event of Default exists hereunder; or a
trustee shall be appointed by a United States District Court to administer any such Plan; or the
PBGC shall institute proceedings to terminate any such Plan;
(k) any Loan Document, at any time after its execution and delivery and for
any reason, shall cease to be in full force and effect, or is declared by a court of competent
jurisdiction to be null and void, invalid or unenforceable in any respect, or the Borrower denies
that it has any or further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any Loan Document;
(l) a Change in Control shall occur;
(m) the Lien purported to be created in any substantial portion of the property
of the Borrower purported to be made subject thereto pursuant to the First Mortgage shall at any
time fail to be a valid, perfected, first-priority Lien (subject to Liens permitted to exist by the
terms of the First Mortgage) securing the obligations of the Borrower under the First Mortgage
(including the obligations of the First Mortgage Bond), and such failure shall constitute or have
resulted in a "Completed Default" under the First Mortgage; or
601944211v6
JJ
(n) (i) the mortgage title insurance policy referred to in Section 4.01(d)(ix) or
any other mortgage title insurance policy purported to be issued for the benefit of the trustee
under the First Mortgage, at any time after its issuance and for any reason, shall cease to be in
full force and effect or is declared by a court of competent jurisdiction to be null and void,
invalid or unenforceable in any respect, or (ii) the issuer of such policy denies that it has any or
further liability or obligation under such policy, or purports to revoke, terminate or rescind such
policy;
then, and in every such event (other than an event with respect to the Borrower described in
paragraph (g) or (h) above), and at any time thereafter during the continuance of such event, the
Administrative Agent, at the request of the Required Lenders, shall, by notice to the Borrower,
take any or all of the following actions, at the same or different times: (i) declare the Loans then
outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall become forthwith due and payable, without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived by the Borrower,
anything contained herein or in any other Loan Document to the contrary notwithstanding, and
(ii) deliver to the Borrower notice demanding redemption of the First Mortgage Bond; and in any
event with respect to the Borrower described in paragraph (g) or (h) above, the principal of the
Loans then outstanding, together with accrued interest thereon and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall automatically become
due and payable, without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or in any other
Loan Document to the contrary notwithstanding.
ARTICLE VIII
RELEASE OF COLLATERAL
Section 8.01 Release upon Termination and Repayment. The Administrative Agent
shall surrender to, or upon the order of, the Borrower all First Mortgage Bonds then held by it
pursuant hereto at the first time at which all amounts owing under this Agreement shall have
been paid in full.
ARTICLE IX
THE ADMTNISTRATIVE AGENT
Section 9.01 Appointment and Powers. In order to expedite the various transactions
contemplated by the Loan Documents, Union Bank is hereby appointed to act as Administrative
Agent on behalf of the Lenders. Each of the Lenders hereby irrevocably authorizes and directs
the Administrative Agent to take such action on behalf of such Lender under the terms and
provisions of the Loan Documents, and to exercise such powers thereunder as are specifically
delegated to or required of the Administrative Agent by the terms and provisions thereof,
together with such powers as are reasonably incidental thereto. The Administrative Agent is
hereby expressly authorized on behalf of the Lenders, without hereby limiting any implied
authority, (a) to receive on behalf of each of the Lenders any payment of principal of or interest
601944211v6
34
on the Loans outstanding hereunder and all other amounts accrued under the Loan Documents
paid to the Administrative Agent, and to distribute to each Lender its proper share of all
payments so received as soon as practicable; (b)to give notice promptly on behalf of each of the
Lenders to the Borrower of any Event of Default of which the Administrative Agent has actual
knowledge acquired in connection with its agency hereunder; and (c) to distribute promptly to
each Lender copies of all notices, agreements and other material as provided for in the Loan
Documents as received by the Administrative Agent.
Section 9.02 Limitation on Liability. Neither the Administrative Agent nor any of its
directors, officers, employees or agents shall be liable to any Lender as such for any action taken
or omitted by any of them under the Loan Documents except for its, his or her own gross
negligence or willful misconduct, or be responsible for any statement, waffanty or representation
therein or the contents of any document delivered in connection therewith or be required to
ascertain or to make any inquiry conceming the performance or observance by the Borrower of
any of the terms, conditions, covenants or agreements of the Loan Documents. The
Administrative Agent shall not be responsible to the Lenders for the due execution, genuineness,
validity, enforceability or effectiveness of the Loan Documents or any other instrument to which
reference is made therein. The Administrative Agent shall in all cases be fully protected in
acting, or refraining from acting, in accordance with written instructions signed by the Required
Lenders, and, except as otherwise specifically provided herein, such instructions and any action
taken or failure to act pursuant thereto shall be binding on all of the Lenders. The Administrative
Agent shall, in the absence of knowledge to the contrary, be entitled to rely on any paper or
document believed by it in good faith to be genuine and correct and to have been signed or sent
by the proper person or persons. Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall have any responsibility to the Borrower on account of the
failure or delay in performance or breach by any Lender of any of its obligations under the Loan
Documents or to any Lender on account of the failure of or delay in performance or breach by
any other Lender or the Borrower of any of their respective obligations thereunder or in
connection therewith. The Administrative Agent may execute any of its duties under the Loan
Documents by or through agents or attorneys selected by it using reasonable care and shall be
entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or attorneys
selected and authorized to act by it with reasonable care unless the damage complained of
directly results from an act or failure to act on the part of the Administrative Agent which
constitutes gross negligence or willful misconduct. Delegation to an attorney for the
Administrative Agent shall not release the Administrative Agent from its obligation to perform
or cause to be performed the delegated duty. The Administrative Agent shall be entitled to advice
of legal counsel selected by it with respect to all matters arising under the Loan Documents and
shall not be liable for any action taken or suffered in good faith by it in accordance with the
advice ofsuch counsel.
Section 9.03 Other Transactions with Borrower. Etc. The Administrative Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any kind of business
with the Borrower or any Affiliate thereof as if it were not the Administrative Agent. The person
serving as the Administrative Agent shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the Administrative
601944211v6
35
Agent, and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated or unless
the context otherwise requires, include the person serving as the Administrative Agent when
acting in its individual capacity.
Section 9.04 Reimbursement: Indemnification. Each Lender agrees (a) to reimburse the
Administrative Agent in the amount of such Lender's Pro Rata Share of any expenses incurred
for the benefit of the Lenders by the Administrative Agent, including reasonable counsel fees
and compensation of agents and employees paid for services rendered on behalf of the Lenders,
to the extent not reimbursed by the Borrower and (b) to indemnify and hold harmless the
Administrative Agent and any of its directors, officers, employees or agents, on demand, in the
amount of its Pro Rata Share, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against it in its capacity as
the Administrative Agent or any of them in any way relating to or arising out of the Loan
Documents or any action taken or omitted by it or any of them under the Loan Documents, to the
extent not reimbursed by the Borrower; plevided, however, that no Lender shall be liable to the
Administrative Agent for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or
willful misconduct of the Administrative Agent or any of its directors, officers, employees or
agents.
Section 9.05 Absence of Reliance. Each of the Lenders acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other Lender and
based on such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each of the Lenders also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the time, continue to
make its own decisions in taking or not taking action under or based upon the Loan Documents,
any related agreement or any document furnished thereunder.
Section 9.06 Resignation of Administrative Aeent. The Administrative Agent may at
any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such
notice of resignation, the Required Lenders may, with the consent of the Borrower (which
consent shall not be unreasonably withheld and shall not be required during an Event of Default),
appoint a successor Administrative Agent. If no successor Administrative Agent shall have been
so appointed by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and after consultation with the Lenders and
the Borrower, appoint a successor Administrative Agent. Upon the acceptance by any person of
its appointment as a successor Administrative Agent, such person shall thereupon succeed to and
become vested with all the rights, powers, privileges, duties and obligations of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations as Administrative Agent under the Loan Documents. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of this Article IX
shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Administrative Agent.
601944211tt6
36
Section 9.07 Removal of Lender. If a Lender fails to give its consent to any
amendment, waiver or action for which consent of all of the Lenders was required and to which
the Required Lenders consented, such Lender shall, upon notice from the Borrower, execute and
deliver to the Administrative Agent one or more Assignments and Assumptions assigning all of
that Lender's interests, rights and obligations under the Loan Documents to one or more Eligible
Assignees designated by the Borrower, subject to (a) compliance with the provisions of Section
10.04 and (b) payment in full of all principal, interest and fees owing to such Lender through the
date of assignment (including any amounts payable pursuant to Sections 2.03(b) and 2.08;
ry4!9d, however, that the failure of any such Lender to execute and deliver to the
Administrative Agent such Assignment(s) and Assumption(s) shall not render such
assignment(s) invalid, and the Administrative Agent shall record such assignment(s) in the
Register. The Administrative Agent shall distribute an amended Schedule 2.01 (which shall
thereafter be incorporated into this Agreement) to reflect any new Pro Rata Shares.
ARTICLE X
MISCELLANEOUS
Section 10.01 Notices. Notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed or sent by telecopy,
graphic scanning or other telegraphic communications equipment of the sending party, as
follows:
(a)if to the Borrower, to:
Avista Corporation
l4l I East Mission Avenue (99202)
P.O.Box3727
Spokane, Washington 99220
Attention: Senior Vice President and Chief Financial Officer
Telecopy: 509-495-4361
if to the Administrative Agent for credit maffers, to:
Union Bank, N.A.
445 South Figueroa Street, 15ft Floor
Los Angeles, California 90071
Attention: Power & Utilities
Telecopy : 213 -23 6-409 6
and if to the Administrative Agent for operational matters, to:
(b)
601944211v6
37
Union Bank, N.A.
Commercial Loan Operations
1980 Saturn Street
Monterey Park, Califomia 917 54
Attention: Commercial Loan Operations Supervisor
Telephone: [phone] (Rhonda Brooks)
Telecopy: 800-892-485 7
E-mai I : #[e-mail]
(c) if to any Lender, to it at its address (or telecopy number) set forth in
Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender shall have
become a party hereto.
All notices and other communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given on the date of receipt if
delivered by hand or ovemight courier service or sent by telecopy or other telegraphic
communications equipment of the sender, or on the date five Business Days after dispatch by
certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed)
to such party as provided in this Section 10.01 or in accordance with the latest unrevoked
direction from such party given in accordance with this Section 10.01 .
Section 10.02 Survival of Agreement. All covenants, agreements, representations and
warranties, including any indemnities and reimbursement obligations, made by the Borrower in
the Loan Documents and in the certificates or other instruments prepared or delivered in
connection therewith or pursuant thereto shall be considered to have been relied upon by the
Lenders and shall survive the making of any Loans by the Lenders and the execution and
delivery to the Lenders of any Notes evidencing such Loans, regardless of any investigation
made by the Lenders, or on their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid.
Section 10.03 Binding Effect. This Agreement shall become effective when it shall have
been executed by the Borrower and the Administrative Agent and when the Administrative
Agent shall have received copies hereof which, when taken together, bear the signatures of each
Lender, and this Agreement shall thereafter be binding upon and inure to the benefit of the
Borrower, the Administrative Agent, each Lender and their respective successors and permitted
assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall
be deemed to include the successors and permitted assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrower, the Administrative Agent or any
Lender that are contained in this Agreement shall bind and inure to the benefit of each such
person's successors and permitted assigns.
601944211v6
38
Section 10.04 Successors and Assigns.
(a) Subject to Section 6.03, the Borrower may not assign or delegate any of its
rights or duties under any of the Loan Documents without the prior written consent of each of the
Lenders.
(b) Each Lender (including the Administrative Agent when acting as a
Lender) may assign to one or more Eligible Assignees all or a portion of its interests, rights and
obligations under the Loan Documents (including all or a portion of the Loan at the time owing
to it); ry!!99[, @€w[, that (i) except in the case of an assignment to a Lender or an Affiliate
of a Lender, the Borrower and the Administrative Agent must give their prior written consent to
such assignment (which consents shall not be unreasonably withheld), provided that the consent
of the Borrower shall not be required if an Event of Default shall exist, (ii) no assignee of any
Lender shall be entitled to receive any greater payment or protection under Section 2.07 or 2.12
than such Lender would have been entitled to receive with respect to the rights assigned or
otherwise transferred unless such assignment or transfer shall have been made at a time when the
circumstances giving rise to such greater payment did not exist, (iii) each such assignment shall
be of a constant, and not a varying, percentage of all the assigning Lender's rights and
obligations under this Agreement, (iv) the amount of the Loan of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Assumption with respect to
such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 (or,
if less, the total amount of such Lender's Loan), (v) the parties to each such assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption and a
processing and recordation fee of $3,500 and (vi) the assignee, if it shall not be a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire. Upon acceptance and
recording pursuant to paragraph (d) of this Section 10.04, from and after the effective date
specified in each Assignment and Assumption, which effective date shall be at least five
Business Days after the execution thereof, (A) the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Assumption, have the rights
and obligations of a Lender underthe Loan Documents and (B)the assigning Lenderthereunder
shall, to the extent of the interest assigned by such Assignment and Assumption, be released
from its obligations under the Loan Documents (and, in the case of an Assignment and
Assumption covering all or the remaining portion of an assigning Lender's rights and obligations
under the Loan Documents, such Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.07,2.08,2.12 and 10.05).
(c) The Administrative Agent shall maintain a copy of each Assignment and
Assumption delivered to it, including the recordation of the names and addresses of the Lenders
and the principal amount of the Loan owing to each Lender pursuant to the terms hereof from
time to time (the *Registef'). The Administrative Agent and the Lenders may treat each person
whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of the Loan Documents. The Register shall be available for inspection by the Borrower
and any Lender at any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an Eligible Assignee, an Administrative Questionnaire
6019442'llv6
39
completed in respect of the Eligible Assignee (unless the Eligible Assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph (b) above and, to
the extent required, the written consent of the Borrower and the Administrative Agent to such
assignment, the Administrative Agent shall (i) accept such Assignment and Assumption,
(ii) record the information contained therein in the Register and (iii) give prompt notice thereof
to the Borrower. Upon the request of the assignee, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent a new Note or Notes to the order of such
assignee in a principal amount equal to the applicable Loan assumed by it pursuant to such
Assignment and Assumption and, if the assigning Lender has retained a Loan, upon the request
of the assigning Lender, the Borrower shall execute and deliver a new Note to the order of such
assigning Lender in a principal amount equal to the applicable Loan retained by it. Canceled
Notes shall be returned to the Borrower.
(e) Each Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities in all or a portion
of its rights and obligations under the Loan Documents (including all or a portion of the Loan
owing to it and any Notes held by it); provided, however, that (i) such Lender's obligations under
the Loan Documents shall remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii) the participating banks or
other entities shall be entitled to the benefit of the fee and cost protection provisions contained in
Sections 2.03(b), 2.07, 2.08 and 2.12 to the same extent as if they were Lenders (ry[!99[, that
the amount of such benefit shall be limited to the amount in respect of the interest sold to which
the seller of such participation would have been entitled had it not sold such interest) and (iv) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and obligations under the
Loan Documents, and such Lender shall retain the sole right to enforce the obligations of the
Borrower relating to the Loans and to approve any amendment, modification or waiver of any
provision of the Loan Documents (other than amendments, modifications or waivers
(A) decreasing the amount of principal of or the rate at which interest is payable on any Loans,
(B) extending any scheduled date for the payment of principal of or interest on any Loans or
(C) releasing the First Mortgage Bond or releasing all or substantially all of the collateral
therefor, in each such case except pursuant to Article VIII).
(0 Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section 10.04, disclose to
the assignee or participant or proposed assignee or participant any information relating to the
Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any
such disclosure of information designated by the Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement whereby such assignee
or participant shall agree (subject to customary exceptions) to preserve the confidentiality of
such confidential information.
(g) Notwithstanding anything to the contrary contained herein, any Lender (a
"Granting Lendef') may grant to a special-purpose funding vehicle (an ",SPC') the option to
fund all or any part of the Loan that such Granting Lender would otherwise be obligated to fund
pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by
60194421 lv6
40
any SPC to fund any Loan, and (ii) if an SPC elects notto exercise such option orotherwise fails
to fund all or any part of such Loan, the Granting Lender shall be obligated to fund such Loan
pursuant to the terms hereof. The funding of a Loan by an SPC hereunder shall fulfill the
obligation of the Granting Lender to fund such Loan to the same extent as if such Loan were
funded by such Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for
any indemnity or payment under the Loan Documents for which a Lender would otherwise be
liable for so long as, and to the extent, the Granting Lender provides such indemnity or makes
such payment. Notwithstanding anything to the contrary contained in this Agreement, any SPC
may disclose on a confidential basis any non-public information relating to its funding of Loans
to any rating agency, commercial paper dealer or provider of any surety or guarantee to such
SPC. This paragraph may not be amended without the prior written consent of each Granting
Lender, all or any part of whose Loan is being funded by an SPC at the time of such amendment.
(h) Any Lender may at any time assign for security purposes all or any
portion of its rights under the Loan Documents to a Federal Reserve Bank; provided that no such
assignment shall release a Lender from any of its obligations thereunder.
Section 10.05 Expenses: Indemnity. Damage Waiver.
(a) The Borrower agrees to pay all reasonable out-of-pocket expenses
(including the reasonable fees, charges and disbursements of internal or external legal counsel)
(i) incurred by the Administrative Agent in connection with the preparation of the Loan
Documents, in connection with any amendments, modifications or waivers of the provisions
thereof (whether or not the transactions thereby contemplated shall be consummated) or in
connection with the use of DXSyndicate, Intralinks or any similar service in relation to this
Agreement or (ii) incurred by the Administrative Agent or any Lender in connection with the
enforcement or protection of its rights in connection with any Loan Document or any Loan.
(b) The Borrower agrees that it shall indemnify the Administrative Agent and
the Lenders against, and hold them harmless from, any documentary taxes, assessments or
charges made by any Governmental Authority by reason of the execution and delivery of this
Agreement or any of the other Loan Documents.
(c) The Borrower agrees to indemnify the Administrative Agent and each
Lender and each oftheir respective directors, officers, employees and agents (each such person
being called an o'Indemnitee") against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including reasonable counsel fees,
charges and disbursements, incurred by or asserted against any Indemnitee arising out of, in any
way connected with, or as a result of, (i) the execution or delivery of this Agreement or any other
Loan Document or any agreement or instrument contemplated thereby, the performance by the
parties thereto of their respective obligations thereunder or the consummation of the Transactions
and the other transactions contemplated thereby, (ii) the use of the proceeds of the Loans or
(iii) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or
not any Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
601944211v6
41
expenses are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.
(d) To the fullest extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with or as a result of this Agreement, any other Loan Document or
any agreement or instrument contemplated hereby, the transactions contemplated hereby or
thereby, any Loan or the use of the proceeds thereof; provided that such waiver shall not, as to
any Indemnitee, apply to special, indirect or consequential damages to the extent resulting from,
or punitive damages awarded on account of, conduct by such Indemnitee that is determined by a
court of competent jurisdiction by final and nonappealable judgment to have constituted gross
negligence or willful misconduct by such Indemnitee.
(e) The provisions of this Section 10.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the consummation of
the transactions contemplated hereby, the repayment of any of the Loans, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent or any Lender. All amounts due
under this Section 10.05 shall be payable on written demand therefor.
Section 10.06 Right of Setoff. If an Event of Default shall have occurred and be
continuing and the Loans shall have been accelerated as set forth in Article VII, each of the
Lenders is hereby authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender (or person
Controlling such Lender) to or for the credit or the account of the Borrower against any of and all
the obligations of the Borrower now or hereafter existing under this Agreement and the other
Loan Documents held by such Lender, irrespective of whether or not such Lender shall have
made any demand under this Agreement or any other Loan Document and although such
obligations of the Borrower are owed to a branch or office of such Lender different from the
branch or office holding such deposit or obligated on such indebtedness. The rights of each
Lender under this Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have. Any Lender shall promptly notify the Borrower after
exercising its rights under this Section.
Section 10.07 Applicable Law. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, OTHER THAN THE FIRST MORTGAGE BOND, THE FIRST MORTGAGE
AND THE SUPPLEMENTAL INDENTURE, SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Section 10.08 Waivers: Amendment.
(a) No failure or delay of the Administrative Agent or any Lender in
exercising any power or right under the Loan Documents shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any abandonment or
601944211v6
42
discontinuance of steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of the Administrative
Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are
not exclusive of any rights or remedies which they would otherwise have. No waiver of any
provision of this Agreement or any other Loan Document or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar or other
circumstances.
(b) Neither any Loan Document nor any provision thereof may be waived,
amended or otherwise modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders; ry[lelL however, that no such
agreement shall (i) without the consent of the applicable Lender, (A) decrease the principal of or
the rate of interest on such Lender's Loan or (B) extend the date for any scheduled payment of
principal of or interest on such Lender's Loan or (ii) without the consent of each Lender, (A)
release the First Mortgage Bond or release all or substantially all of the collateral therefor, in
each such case except pursuant to Article VIII, or (B) amend or modify the provisions of
Section 2.09, the provisions of this Section, the definition of "Required Lenders" or any other
provision requiring the consent or agreement of each of the Lenders; provided further that no
such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative
Agent under the Loan Documents without the prior written consent of the Administrative Agent.
Each Lender and each holder of a Note shall be bound by any waiver, amendment or
modification authorized by this Section regardless of whether its Note shall have been marked to
make reference thereto, and any consent by any Lender or holder of a Note pursuant to this
Section shall bind any person subsequently acquiring a Note from it, whether or not such Note
shall have been so marked.
Section 10.09 Interest Rate Limitation. Notwithstanding anything herein or in any Notes
to the contrary, if at any time the applicable interest rate, together with all fees and charges
which are treated as interest under applicable law (collectively the "Charges"), as provided for
herein or in any other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender, shall exceed the maximum lawful rate (the
'oMaximum Rate") which may be contracted for, charged, taken, received or reserved by such
Lender in accordance with applicable law, the rate of interest payable under any Note held by
such Lender, together with all Charges payable to such Lender, shall be limited to the Maximum
Rate.
Section 10.10 Entire Asreement. Each Loan Document constitutes the entire contract
between or among the parties relative to the subject matter thereof, and any previous agreement
between or among the parties with respect to the subject matter thereof is superseded by such
Loan Document. Nothing in this Agreement or in the other Loan Documents, expressed or
implied, is intended to confer upon any party other than the parties hereto and thereto any rights,
remedies, obligations or liabilities under or by reason of this Agreement or the other Loan
Documents.
601944211v6
43
Section 10.11 Waiver of Jury Trial. Each party hereto hereby waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in respect of any litigation
directly or indirectly arising out of, under or in connection with this Agreement or any of the
other Loan Documents. Each party hereto (a) certifies that no representative, agent or attorney of
any other party has represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the
other parties hereto have been induced to enter into this Agreement and the other Loan
Documents, as applicable, by, among other things, the mutual waivers and certifications in this
Section l0.l l.
Section 10.12 Severabilitv. In the event any one or more of the provisions contained in
this Agreement or in any other Loan Document should be held invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.
Section 10.13 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when taken together shall
constitute but one contract, and shall become effective as provided in Section 10.03.
Section 10.14 Headings. Articleand Sectionheadings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and are not to affect
the construction of, or to be taken into consideration in interpreting, this Agreement.
Section l0.l 5 Jurisdiction: Consent to Service of Process.
(a) The Borrower hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or the other Loan
Documents, or for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that a finaljudgment in
any such action orproceeding shall be conclusive and may be enforced in otherjurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent or any Lender may otherwise have to bring any
action or proceeding relating to this Agreement or the other Loan Documents against the
Borrower or its properties in the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or relating to this
601944211v6
44
Agreement or the other Loan Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 10.01. Nothing in this Agreement will affect the right
of any party to this Agreement to serve process in any other manner permitted by law.
Section 10.16 USA Patriot Act Notification. Each Lender hereby notifies the Borrower
that, pursuant to the requirements of the Uniting and Strenghening America by Providing
Appropriate Tools Required to Interrupt and Obstruct Terrorism Act of 2001 (Title III of Pub. L.
107-56 (signed into law October 26,2001) (the"Act"), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identifo the Borrower in
accordance with the Act. The Borrower agrees to cooperate with each Lender and to provide
true, accurate and complete information to such Lender in response to any such request.
fSi gnature pa ge s fo llow.l
601944211,r6
45
WITNESS the due execution hereof as of the date frst above written.
AVISTA CORPORATION
r\
By, /4-.((,
Name: Mark T. Thies
Title: Senior Vice President. Chief Financial
Officer and Treasurcr
Tcrm Loan Agrccmurt
UNION BANK, N.A.. as Administrative Agent and
Lender
sv, ?artw'L -Lt#- -
Name: Pascal Uttinser
Title: Director
Tcrmloan Agrcorucnt
EXHIBIT A
IFORM OFI
NOTE
,20
FOR VALUE RECEIVED, the undersigned, AVISTA CORPORATION, a Washington
corporation (the "Borrobter"), hereby promises to pay to the order of
(the "Lender"), at the office of Union Bank, N.A., as administrative agent (the "Administrative
Agent"), at 445 South Figueroa Street, Los Angeles, California, on the Maturity Date, as defined
in the Term Loan Agreement dated as of August 14,2013 among the Borrower, the Lenders
listed in Schedule 2.01 thereto and Union Bank, N.A., as Administrative Agent (the "Loan
Agreement"), the aggregate unpaid principal amount of the Loan (as defined in the Loan
Agreement) of the Lender under the Loan Agreement, in lawful money of the United States of
America in immediately available funds, and to pay interest from the date hereof on the principal
amount hereof from time to time outstanding, in like funds, at said office, at the rate or rates per
annum and payable on the dates provided in the Loan Agreement.
The Borrower promises to pay interest, on demand, on any overdue principal and, to the
extent permitted by law, overdue interest from their due dates at the rate or rates provided in the
Loan Agreement.
The Borrower hereby waives diligence, presentment, demand, protest and notice of any
kind whatsoever. The nonexercise by the holder of any of its rights hereunder in any particular
instance shall not constitute a waiver thereof in that or any subsequent instance.
The Loan evidenced by this Note and all payments and prepayments of the principal
thereof and interest thereon and the date and maturity date thereof shall be endorsed by the
holder hereof on the schedule attached hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof, or otherwise recorded by such holder in
its internal records; plgviidgd, however, that the failure of the holder hereof to make such a
notation or any error in such a notation shall not affect the obligations of the Borrower under this
Note.
This Note is one of the Notes referred to in the Loan Agreement, which, among other
things, contains provisions for the acceleration of the maturity hereof upon the happening of
certain events, for optional and mandatory prepayment of the principal hereof prior to the
maturity hereof and for the amendment or waiver of certain provisions of the Loan Agreement,
60 I 948098v5
all upon the terms and conditions therein specified. This Note shall be construed in accordance
with and governed by the laws of the State of New York and any applicable laws of the United
States of America.
AVISTA CORPORATION
By:
Name:
Title:
Amount ofloan
Loan and Payments
Payments of
Principal and lnterest
Unpaid Principal
Balance ofNote
Name of Person
Making Notation
Maturity
Date
60 I 948098v5
EXHIBIT B
IFORM OFI
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the "Assignment and Assumption") is dated as of the
Effective Date set forth below and is entered into by and betweenflnsert nome of Assignor)(the
"Assignor") and llnsert name of Assignee) (the "Assignee"). Capitalized terms used but not
defined herein shall have the respective meanings given to them in the Term Loan Agreement
identified below (as amended, the "Loan Agreement"). The Standard Terms and Conditions set
forth in Annex I attached hereto are hereby agreed to and incorporated herein by reference and
made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor,
subject to and in accordance with the Standard Terms and Conditions and the Loan Agreement,
as of the Effective Date inserted by the Administrative Agent as contemplated below, (i) all of
the Assignor's rights and obligations in its capacity as a Lender under the Loan Agreement and
any other documents or instruments delivered pursuant thereto to the extent related to the
assigned amount and percentage interest identified below of the respective facilities identified
below and (ii) to the extent permitted to be assigned under applicable law, all claims, suits,
causes of action and any other rights of the Assignor (in its capacity as a Lender) against any
person, whether known or unknown, arising under or in connection with the Loan Agreement,
any other documents or instruments delivered pursuant thereto or the loan transactions governed
thereby or in any way based on or related to any of the foregoing, including, but not limited to,
contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in
equity, in each case related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as, the "Assigned Interesf'). Such sale and assignment are without
recourse to the Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
l. Assignor:
4.
2.
J.
5.Loan Agreement:
Assignee:
Borrower:
Administrative Agent: Union Bank, N.A.
1 lnclude if applicable.
601 948098v5
1an Affrtiate of 1t*r "r11'
Avista Corporation
Term Loan Agreement dated as of August 14, 2013 among Avista
Corporation, the Lenders listed in Schedule 2.01 thereto and Union
Bank, N.A., as Administrative Agent
Aggregate Amount of
Loans for all Lenders2
Amount of Loan
Assigned2
Percentage' Assigned of
Loans for all Lenders
$$%
$$%
$$Yo
6. Assigned Interest:
U. Trade Date:
Effective Date:
20)o
20- [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN
THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
INAME OF ASSTGNOR]
By:
Name:
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
Name:
Title:
[Consented to and]s Accepted:
LNION BANK, N.A., as Administrative Agent
By:
Name:
Title:
2 Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date
and the Effeclive Date.
t Set forth, to at least I decimals, as a percentage of the Loans of all Lenders thereunder.
a To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade
Date.
5 To be included if such consent is required by the terms of the Loan Agreement.
60 I 948098v5
[Consented to:
AVI STA CORPORATION
By:
Name:
Title:l'
601948098v5
ANNEX I
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
l. RepresentationsandWarranties.
l.l Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate
the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Loan Agreement or
any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other person obligated in
respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other person of any of their respective obligations under any
Loan Document.
1.2. Assiqnee. The Assignee (a) represents and warrants that (i) it is an Eligible
Assignee, (ii) it has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Loan Agreement, (iii) from and after the Effective
Date, it shall be bound by the provisions of the Loan Agreement as a Lender thereunder and, to
the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Loan Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 5.04 thereof, as applicable, and such other documents
and information as it has deemed appropriate to make its own credit analysis and decision to
enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Non-U.S. Person (as defined in
Section 2.12(9) of the Loan Agreement), attached to the Assignment and Assumption is any
documentation required to be delivered by it pursuant to the terms of the Loan Agreement, duly
completed and executed by the Assignee; (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the Loan Documents
are required to be performed by it as a Lender; and (c) effective on the Effective Date, appoints
and authorizes the Administrative Agent to take such action as Administrative Agent on its
behalf and to exercise such powers under the Loan Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are reasonably
incidental thereto.
60 I 948098v5
2. Payments. From and after the Effective Date, the Administrative Agent shall make all
payments in respect of the Assigned Interest (including payments of principal, interest, fees and
other amounts) to the Assignor for amounts which have accrued to but excluding the Effective
Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3. General Provisions. This Assignment and Assumption shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors and assigns. This Assignment
and Assumption may be executed in any number of counterparts, which together shall constitute
one instrument. Delivery of an executed counterpart of a signature page of this Assignment and
Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this
Assignment and Assumption. This Assignment and Assumption shall be governed by, and
construed in accordance with, the law of the State of New York.
601948098v5
EXHIBIT C
IFORM OFI
ADMINISTRATIVE QUESTIONNAIRE
ACCOUNT: Avista Corporation
FACILITY: Term Loan Facility
LEGAL NAME OF LENDER:
Operations Contact
(Draws/Repaymentsff unding Matters)
Credit Contact
(Compliance Matters and Financial Statements)
Wire Instructions:
Name
Title
Street Address
Citv. State andZio
Teleohone
Fax
E-Mail Address
Name
Title
Street Address
City, State andZip
Teleohone
Fax
E-Mail Address
60 I 948098v5
SCHEDULE2.OI
Names. Addresses and Loan Amounts of Initial Lenders
Lender Loan Amount
Union Bank, N.A.
445 South Figueroa Street
Los Angeles, CA 90071
Attention: Bryan Read
Telecopy : 21 3 -23 6-409 6
$90,000,000
TOTAL:$90,000,000
60 I 948098v5
SCHEDULE 3.I3
Sisnificant Subsidiaries
601948098v5
SCHEDULE a.0l(c)(ii)
Reouired Governmental Approvals
Washington
Order Establishing Compliance with RCW 80.08.040, Relating to Securities Issuance, entered
July 13,2011, in Docket No. U-llll76 of the Washington Utilities and Transportation
Commission.
Order Amending Commission's Order No. I Establishing Compliance with RCW 80.08.040,
Relating to Securities Issuance, entered August 24,2011, in Docket No. U-1lll76 of the
Washington Utilities and Transportation Commission.
Oregon
Order No. ll-334, entered August 26,2011, in file number UF 4269 from the Public Utility
Commission of Oregon.
Idaho
Order No. 32338, entered August 25,2011, in Case No. AVU-U-Il-01 of the ldaho Public
Utilities Commission.
Montana
Default Order No. 4535, entered July 2, 1979, in Docket No. 6690 of the Public Service
Commission of the State of Montana.
601 948098v5
SCHEDULE 6.0I
Existine Secured Indebtedness
First Mortgage Bonds Outstanding under Mortgage and Deed of Trust Dated as of June 7,1939,
as Modified by Supplemental Indentures Thereto
Aggregate principal amount of First Mortgage Bonds outstanding through and including the Fifty-fourth
Supplemental Indenture (but excluding the Fifty-fifth Supplemental Indenture) = $1,736,700,000.
SUPPLEMENTAL
INDENTUR.E
DATED AS OF SERIES
NO DF-SIGNATION
PRINCIPAL
AMOUNT
ISSUED
PRINCIPAL
AMOLTNT
OUTSTANDING
Twenty-Sixth April l, 1993 24 Secured Medium-Term
Notes, Series A
($250.000.000 authorized)
$250,000,000 $36,000,000
Thirtv-fourth November 1.2004 32 5.457o Series due 2019 s90.000.000 $90.000.000
Thifi-fifth December 1,2004 33 Collateral Series 2004A $88,850,000 $2s,000,000
Thirty-ninth November 1,2005 39 6.25% Series due 2035 $ I 00,000,000
s50 000 000
$ l 00,000,000
$50.000.000
Fortv-first Decernber l- 2005 4l 5.707o Series &te2O37 sl 50.000.000 s r s0.000_000
Fortv-second Aoril 1.2008 42 5.957o Series due 2018 $250"000.000 $250.000.000
Forty-sixth Sentember l - 2009 46 5. 1257' Series drc 2022 s2s0.000.000 s250.000_000
Fortv-eishth December 1.2010 48 Collateral Series 2010A $66.700.000 $66.700.000
Fortv-eishth December l,2010 49 Collateral Series 2010B $ I 7.000,000 $ I 7,000,000
Fortv-ninth December 1.2010 50 3.89% Series dtrc2020 $52.000.000 $52.000.000
Fortv-ninth December 1.2010 5l 5.55% Series due 2040 $35.000,000 $35,000,000
Fiftieth December 1.2010 52 1.68% Series due 2013 $50.000-000 $50.000.000
Fifty-first Februarv l,201 I 53 Collateral Series 201 lA $400.000.000 $400.000.000
Fiftv-third Decemberl.20ll 54 4.45% Series due 2041 $8s.000.000 $85.000.000
Fiftv-fourth November l,2012 55 4.23o/o Seies due 2047 $80.000.000 $80.000.000
60 I 948098v5