Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE WASHINGTON WATER POWER COMPANY
(Exact name of registrant as specified in its charter)
WASHINGTON 91-0462470
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1411 East Mission Avenue
Spokane, Washington 99202
(509) 489-0500
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
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J.E. ELIASSEN, Senior Vice President J. ANTHONY TERRELL
& Chief Financial Officer Reid & Priest LLP
The Washington Water Power Company 40 West 57th Street
1411 East Mission Avenue New York, New York 10019
Spokane, Washington 99202 (212) 603-2000
(509) 489-0500
(Name and address, including zip code, and telephone number,
including area code, of agents for service)
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It is respectfully requested that the Commission
send copies of all notices, orders and communications to:
John E. Baumgardner, Jr.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the registration statement becomes
effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act of 1933,
please check the following box and list the Securities Act of 1933
registration statement number of the earlier effective registration
statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, check the following box and
list the Securities Act of 1933 registration statement number of the
earlier effective registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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TITLE
OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE
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The Washington
Water Power
Company Debt
Securities ..... $250,000,000 100% $250,000,000 $75,757.58
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(1) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457.
The registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until this Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a), may
determine.
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INFORMATION CONTAINED IN THIS PROSPECTUS IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS
BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO
THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN
WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER 5, 1997
PROSPECTUS
$250,000,000
THE WASHINGTON WATER POWER COMPANY
DEBT SECURITIES
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The Washington Water Power Company (the "Company"), a Washington
corporation, intends from time to time to issue up to $250,000,000
aggregate principal amount of its Debt Securities, in one or more
series, on terms to be determined at the time or times of sale.
The terms of the Debt Securities in respect of which this
Prospectus is being delivered, including where applicable the series
designation, the principal amount of the series, the maturity date or
dates, the rate or rates and times of payment of interest, the initial
public offering price, the provisions for redemption, if any, and
other provisions, are set forth in one or more Prospectus Supplements
(each a "Prospectus Supplement"), together with the terms of offering
such Debt Securities. The Debt Securities may be sold by the Company
through underwriters or dealers, directly or through agents for
offering pursuant to the terms fixed at the time of sale. See "Plan of
Distribution" herein.
This Prospectus may not be used to consummate sales of securities
unless accompanied by a Prospectus Supplement.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is ________ __, 1997
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AVAILABLE INFORMATION
This Prospectus constitutes a part of a Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") filed by the Company with the Securities and
Exchange Commission (the "SEC" or the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"), with
respect to the securities offered hereby. This Prospectus does not
contain all of the information set forth in such Registration
Statement, certain parts of which are omitted in accordance with the
rules and regulations of the SEC, although it does include a summary
of the material terms of the Indenture (as defined herein). Reference
is made to such Registration Statement and to the exhibits relating
thereto for further information with respect to the Company and the
securities offered hereby. Any statements contained herein concerning
the provisions of any document filed as an exhibit to the Registration
Statement or otherwise filed with the SEC or incorporated by reference
herein are not necessarily complete, and, in each instance, reference
is made to the copy of such document so filed for a more complete
description of the matter involved. Each such statement is qualified
in its entirety by such reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith files reports, proxy statements and other
information with the SEC. Information, as of particular dates,
concerning the Company's directors and officers, their remuneration,
the principal holders of the Company's securities, and any material
interest of such persons in transactions with the Company is disclosed
in proxy statements distributed to shareholders of the Company and
filed with the SEC. These reports, proxy statements and other
information can be inspected and copied at the public reference
facilities of the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; 7 World Trade Center, 13th Floor, New York,
New York 10048; and 500 West Madison Street, 14th Floor, Chicago,
Illinois 60601; and copies of such material can be obtained from the
Public Reference Section of the SEC, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The SEC
maintains a Web site that contains reports, proxy and information
statements and other information regarding reporting companies under
the Exchange Act, including the Company, at http://www.sec.gov. The
Company's Common Stock is listed on the New York and Pacific Stock
Exchanges, and reports, proxy statements and other information
concerning the Company can be inspected at the offices of such
exchanges located at the New York Stock Exchange, 20 Broad Street, New
York, New York 10005, and the Pacific Stock Exchange, 301 Pine Street,
San Francisco, California 94104, respectively.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates herein by reference, and as of
any time hereafter prior to the termination of the offering made by
this Prospectus the Company shall be deemed to have incorporated
herein by reference, (1) the Company's latest Annual Report on Form
10-K (the "Latest Annual Report") filed by the Company with the SEC
pursuant to the Exchange Act, and (2) all other reports and documents
filed by the Company with the SEC pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the filing of the Latest
Annual Report, and all of such documents shall be deemed to be a part
hereof from the respective dates of filing thereof. The documents
incorporated herein by reference are sometimes hereinafter called the
"Incorporated Documents." Any statement contained in an Incorporated
Document shall be deemed to be modified or superseded for all purposes
to the extent that a statement in this Prospectus or in any
subsequently filed Incorporated Document modifies or replaces such
statement. The Incorporated Documents incorporated herein by reference
as of the date of this Prospectus are the Annual Report on Form 10-K
for the year ended December 31, 1996, the Quarterly Reports on Form
10-Q for the quarters ended March 31, June 30 and September 30, 1997,
and the Current Report on Form 8-K dated June 25, 1997.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH
PERSON TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE
WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF
THE INCORPORATED DOCUMENTS, OTHER THAN EXHIBITS THERETO (UNLESS SUCH
EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH
INCORPORATED DOCUMENTS). REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED
TO: TREASURER, BY MAIL AT THE WASHINGTON WATER POWER COMPANY, POST
OFFICE BOX 3727, SPOKANE, WASHINGTON 99220, OR BY TELEPHONE AT
509-489-0500.
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THE WASHINGTON WATER POWER COMPANY
The Company, which was incorporated in the State of Washington in
1889, primarily operates in the electric and natural gas utility
business. As of January 1, 1997, the Company provides electricity and
natural gas in a 26,000 square mile area in eastern Washington and
northern Idaho with a population of approximately 825,000. The Company
also provides natural gas service in northeast and southwest Oregon
and the South Lake Tahoe region of California with a population of
approximately 495,000. The Company has its principal offices at 1411
East Mission Avenue, Spokane, Washington 99202. Its telephone number
is 509-489-0500.
The Company operates as a regional utility providing electric and
natural gas sales and services and as a national entity providing both
energy and non-energy products and services. The regional utility
portion of the Company consists of two lines of business which are
subject to state and federal price regulation -- (1) Energy Delivery
and (2) Generation and Resources. The national businesses are
conducted under Avista Corp. ("Avista Corp."), which is the parent
company to all of the Company's material subsidiaries.
The Energy Delivery line of business includes transmission and
distribution services for retail electric operations, all natural gas
operations, and other energy products and services. Usage by retail
customers varies from year to year primarily as a result of weather
conditions, customer growth, the economy in the Company's service
area, conservation efforts, appliance efficiency and other technology.
The Generation and Resources line of business includes the
generation and production of electric energy, and short and long-term
electric and natural gas commodity trading and wholesale sales
primarily to other utilities in the western United States. Energy
trading involves short-term sales and purchases of energy, such as
next hour, next day and monthly blocks of energy; wholesale marketing
includes sales and purchases under long-term contracts with one-year
and longer terms. Revenues from the sale of energy to other utilities
and the cost of electric power purchases vary from year to year
depending on the electric wholesale power market, which is affected by
several factors, including the availability of water for hydroelectric
generation, the availability of base load plants in the region and the
demand for power in other areas of the country. Other factors
affecting the wholesale power market include an increasing number of
power brokers and marketers and competition from low cost generation
being developed by independent power producers.
Avista Corp. owns the Company's National Energy Trading and
Marketing and non-energy businesses. The National Energy Trading and
Marketing businesses are conducted by Avista Energy and Avista
Advantage. Avista Energy focuses on commodity trading, energy
marketing and other related businesses on a national basis. Avista
Advantage provides a variety of energy-related products and services
to commercial and industrial customers on a national basis. Its
primary product lines include consolidated billing and resource
accounting. The non-energy business is conducted primarily by Pentzer,
which is the parent company to the majority of the Company's
non-energy businesses.
At December 31, 1996, the Company's employees included 1,453
people in its utility operations and 1,240 people in its
majority-owned non-utility businesses. The Company's corporate
headquarters are in Spokane, Washington, which serves as the Inland
Northwest's center for manufacturing, transportation, health care,
education, communication, agricultural and service businesses.
USE OF PROCEEDS
The Company intends to use the net proceeds from the issuance and
sale of the Debt Securities for any or all of the following purposes:
(i) to fund a portion of the Company's construction, facility
improvement and maintenance programs, (ii) to retire or exchange one
or more outstanding series of its preferred stock, bonds or notes,
(iii) to reimburse the Company's treasury for funds previously
expended for these purposes and (iv) for other general corporate
purposes.
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DESCRIPTION OF THE DEBT SECURITIES
GENERAL
The Debt Securities may be issued from time to time in one or
more series under an Indenture, dated as of ____________ 1, 1997 (the
"Original Indenture"), between the Company and The Chase Manhattan
Bank, as trustee (the "Trustee"), the Original Indenture, as amended
and supplemented from time to time, being hereinafter referred to as
the "Indenture." The terms of the Debt Securities will include those
stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act. The following summary does not
purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by reference to, the
Indenture, which is filed as an exhibit to the Registration Statement
of which this Prospectus forms a part, and the Trust Indenture Act.
Capitalized terms used under this heading which are not otherwise
defined in this Prospectus shall have the meanings ascribed thereto in
the Indenture. Whenever particular provisions or defined terms in the
Indenture are referred to herein, such provisions or defined terms are
incorporated by reference herein.
The Indenture provides that, in addition to the Debt Securities,
additional debt securities may be issued thereunder, without
limitation as to aggregate principal amount. The Debt Securities and
all other debt securities issued under the Indenture are collectively
referred to herein as the "Indenture Securities." Each series of
Indenture Securities will be unsecured and will rank pari passu with
all other series of Indenture Securities, except as otherwise provided
in the Indenture, and with all other unsecured and unsubordinated
indebtedness of the Company. Except as otherwise described in the
applicable Prospectus Supplement, the Indenture does not limit the
incurrence or issuance of other secured or unsecured debt of the
Company, whether under the Indenture, any other indenture that the
Company may enter into in the future or otherwise. See Prospectus
Supplement relating to any offering of Debt Securities.
The applicable Prospectus Supplement or Prospectus Supplements
will describe the following terms of the Debt Securities: (1) the
title of the Debt Securities; (2) any limit upon the aggregate
principal amount of the Debt Securities; (3) the date or dates on
which the principal of the Debt Securities is payable or the method of
determination thereof and the right, if any, to extend such date or
dates; (4) the rate or rates at which the Debt Securities shall bear
interest, if any, or the method by which such rate or rates, if any,
shall be determined, the date or dates from which any such interest
will accrue, the Interest Payment Dates on which any such interest
shall be payable, the right, if any, of the Company to defer or extend
an Interest Payment Date, and the Regular Record Date for any interest
payable on any Interest Payment Date and the person or persons to whom
interest on such Debt Securities shall be payable on any Interest
Payment Date, if other than the persons in whose names such Debt
Securities are registered at the close of business on the Regular
Record Date for such interest; (5) the place or places where, subject
to the terms of the Indenture as described below under "Payment and
Paying Agents," the principal of and premium, if any, and interest, if
any, on the Debt Securities will be payable and where, subject to the
terms of the Indenture as described below under "- Registration and
Transfer," the Debt Securities may be presented for registration of
transfer or exchange and the place or places where notices and demands
to or upon the Company in respect of the Debt Securities and the
Indenture may be served; the Security Registrar and Paying Agents for
such Debt Securities; and, if such is the case, that the principal of
such Debt Securities shall be payable without presentation or
surrender thereof; (6) any period or periods within, or date or dates
on, which, the price or prices at which and the terms and conditions
upon which Debt Securities may be redeemed, in whole or in part, at
the option of the Company; (7) the obligation or obligations, if any,
of the Company to redeem or purchase any of the Debt Securities
pursuant to any sinking fund or other mandatory redemption provisions
or at the option of the holder thereof, and the period or periods
within, or date or dates on, which, the price or prices at which, and
the terms and conditions upon which the Debt Securities shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation, and applicable exceptions to the requirements of a notice
of redemption in the case of mandatory redemption or redemption at the
option of the holder; (8) the denominations in which any Debt
Securities shall be issuable if other than denominations of $1,000 and
any integral multiple thereof; (9) if the Debt Securities are to be
issued in global form, the identity of the depositary thereof; and
(10) any other terms of the Debt Securities.
PAYMENT AND PAYING AGENTS
Except as may be provided in the applicable Prospectus
Supplement, interest, if any, on each Debt Security payable on each
Interest Payment Date will be paid to the person in whose name such
Debt Security is registered as of the close of business on the regular
record date relating to such Interest Payment Date (each such period
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of interest accrual being hereinafter called a "Scheduled Interest
Period"); provided, however, that interest payable at maturity
(whether at stated maturity, upon redemption or otherwise, hereinafter
"Maturity") will be paid to the person to whom principal is paid.
However, if there has been a default in the payment of interest on any
Debt Security, such defaulted interest may be payable to the holder of
such Debt Security as of the close of business on a date selected by
the Trustee which is not more than 30 days and not less than 10 days
prior to the date proposed by the Company for payment of such
defaulted interest or in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Debt
Security may be listed, if the Trustee deems such manner of payment
practicable.
Unless otherwise specified in the applicable Prospectus
Supplement, the principal of and premium, if any, and interest, if
any, on the Debt Securities at Maturity will be payable upon
presentation of the Debt Securities at the corporate trust office of
The Chase Manhattan Bank in New York, New York, as Paying Agent for
the Company. The Company may change the Place of Payment on the Debt
Securities, may appoint one or more additional Paying Agents
(including the Company) and may remove any Paying Agent, all at its
discretion.
REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable Prospectus
Supplement, the transfer of Debt Securities may be registered, and
Debt Securities may be exchanged for other Debt Securities of the same
series and tranche, of authorized denominations and of like tenor and
aggregate principal amount, at the corporate trust office of The Chase
Manhattan Bank in New York, New York, as Security Registrar for the
Debt Securities. The Company may change the place for registration of
transfer and exchange of the Debt Securities and may designate one or
more additional places for such registration and exchange, all at its
discretion. Except as otherwise provided in the applicable Prospectus
Supplement, no service charge will be made for any transfer or
exchange of the Debt Securities, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or
exchange of the Debt Securities. The Company will not be required to
execute or to provide for the registration of transfer of or the
exchange of (a) any Debt Security during a period of 15 days prior to
giving any notice of redemption or (b) any Debt Security selected for
redemption in whole or in part, except the unredeemed portion of any
Debt Security being redeemed in part.
REDEMPTION
Any terms for the optional or mandatory redemption of Debt
Securities will be set forth in the applicable Prospectus Supplement.
Except as shall otherwise be provided in the applicable Prospectus
Supplement with respect to Debt Securities redeemable at the option of
the holder, Debt Securities will be redeemable only upon notice by
mail not less than 30 nor more than 60 days prior to the date fixed
for redemption, and, if less than all the Debt Securities of a series,
or any tranche thereof, are to be redeemed, the particular Debt
Securities to be redeemed will be selected by such method as shall be
provided for such series or tranche, or in the absence of any such
provision, by such method of random selection as the Security
Registrar deems fair and appropriate.
Any notice of redemption at the option of the Company may state
that such redemption will be conditional upon receipt by the Paying
Agent or Agents, on or prior to the dates fixed for such redemption,
of money sufficient to pay the principal of and premium, if any, and
interest, if any, on such Debt Securities and that if such money has
not been so received, such notice will be of no force or effect and
the Company will not be required to redeem such Debt Securities.
MODIFICATION OF INDENTURE
Without the consent of any holders of Indenture Securities, the
Company and the Trustee may enter into one or more supplemental
indentures for any of the following purposes:
(a) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the
Company in the Indenture and in the Indenture Securities; or
(b) to add one or more covenants of the Company or other
provisions for the benefit of all holders of Indenture Securities or
for the benefit of the holders of, or to remain in effect only so long
as there shall be outstanding, Indenture Securities of one or more
specified series, or one or more tranches thereof, or to surrender any
right or power conferred upon the Company by the Indenture; or
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(c) to change or eliminate any provision of the Indenture or to
add any new provision to the Indenture, provided that if such change,
elimination or addition adversely affects the interests of the holders
of the Indenture Securities of any series or tranche in any material
respect, such change, elimination or addition will become effective
with respect to such series or tranche only when no Indenture Security
of such series or tranche remains outstanding; or
(d) to provide collateral security for the Indenture Securities
or any series thereof; or
(e) to establish the form or terms of the Indenture Securities of
any series or tranche as permitted by the Indenture; or
(f) to provide for the authentication and delivery of bearer
securities and coupons appertaining thereto representing interest, if
any, thereon and for the procedures for the registration, exchange and
replacement thereof and for the giving of notice to, and the
solicitation of the vote or consent of, the holders thereof, and for
any and all other matters incidental thereto; or
(g) to evidence and provide for the acceptance of appointment by
a successor trustee with respect to the Indenture Securities of one or
more series; or
(h) to provide for the procedures required to permit the
utilization of a non-certificated system of registration for all, or
any series or tranche of, the Indenture Securities; or
(i) to change any place or places where (1) the principal of and
premium, if any, and interest, if any, on all or any series of
Indenture Securities, or any tranche thereof, will be payable, (2) all
or any series of Indenture Securities, or any tranche thereof, may be
surrendered for registration of transfer, (3) all or any series of
Indenture Securities, or any tranche thereof, may be surrendered for
exchange and (4) notices and demands to or upon the Company in respect
of all or any series of Indenture Securities, or any tranche thereof,
and the Indenture may be served; or
(j) to cure any ambiguity, to correct or supplement any provision
therein which may be defective or inconsistent with any other
provision therein, or to make any other changes to the provisions
thereof or to add other provisions with respect to matters and
questions arising under the Indenture, so long as such other changes
or additions do not adversely affect the interests of the holders of
Indenture Securities of any series or tranche in any material respect.
Without limiting the generality of the foregoing, if the Trust
Indenture Act is amended after the date of the Original Indenture in
such a way as to require changes to the Indenture or the incorporation
therein of additional provisions or so as to permit changes to, or the
elimination of, provisions which, at the date of the Original
Indenture or at any time thereafter, were required by the Trust
Indenture Act to be contained in the Indenture, the Indenture will be
deemed to have been amended so as to conform to such amendment or to
effect such changes or elimination, and the Company and the Trustee
may, without the consent of any holders of Indenture Securities, enter
into one or more supplemental indentures to evidence or effect such
amendment.
Except as provided above, the consent of the holders of a
majority in aggregate principal amount of the Indenture Securities of
all series then outstanding, considered as one class, is required for
the purpose of adding any provisions to, or changing in any manner, or
eliminating any of the provisions of, the Indenture pursuant to one or
more supplemental indentures; provided, however, that if less than all
of the series of Indenture Securities outstanding are directly
affected by a proposed supplemental indenture, then the consent only
of the holders of a majority in aggregate principal amount of
outstanding Indenture Securities of all series so directly affected,
considered as one class, will be required; and provided, further, that
if the Indenture Securities of any series have been issued in more
than one tranche and if the proposed supplemental indenture directly
affects the rights of the holders of one or more, but less than all,
of such tranches, then the consent only of the holders of a majority
in aggregate principal amount of the outstanding Indenture Securities
of all tranches so directly affected, considered as one class, will be
required; and provided, further, that no such amendment or
modification may (a) change the Stated Maturity of the principal of,
or any installment of principal of or interest on, any Indenture
Security other than pursuant to the terms thereof, or reduce the
principal amount thereof or the rate of interest thereon (or the
amount of any installment of interest thereon) or change the method of
calculating such rate or reduce any premium payable upon the
redemption thereof, or reduce the amount of the principal of any
Discount Security that would be due and payable upon a declaration of
acceleration of Maturity or change the coin or currency (or other
property) in which any Indenture Security or any premium or the
interest thereon is payable, or impair the right to institute suit for
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the enforcement of any such payment on or after the Stated Maturity of
any Indenture Security (or, in the case of redemption, on or after the
redemption date) without, in any such case, the consent of the holder
of such Indenture Security, (b) reduce the percentage in principal
amount of the outstanding Indenture Securities of any series, or any
tranche thereof, the consent of the holders of which is required for
any such supplemental indenture, or the consent of the holders of
which is required for any waiver of compliance with any provision of
the Indenture or of any default thereunder and its consequences, or
reduce the requirements for quorum or voting, without, in any such
case, the consent of the holder of each outstanding Indenture Security
of such series or tranche, or (c) modify certain of the provisions of
the Indenture relating to supplemental indentures, waivers of certain
covenants and waivers of past defaults with respect to the Indenture
Securities of any series, or any tranche thereof, without the consent
of the holder of each outstanding Indenture Security of such series or
tranche.
A supplemental indenture which changes or eliminates any covenant
or other provision of the Indenture which has expressly been included
solely for the benefit of the holders of, or which is to remain in
effect only so long as there shall be outstanding, Indenture
Securities of one or more specified series, or one or more tranches
thereof, or modifies the rights of the holders of Indenture Securities
of such series or tranches with respect to such covenant or other
provision, will be deemed not to affect the rights under the Indenture
of the holders of the Indenture Securities of any other series or
tranche.
EVENTS OF DEFAULT
The Indenture provides that any one or more of the following
described events with respect to a series of Indenture Securities that
has occurred and is continuing constitutes an "Event of Default" with
respect to such series of Indenture Securities:
(a) failure for 60 days to pay any interest on such series
of Indenture Securities, when due and payable; provided, however,
that no such failure shall constitute an Event of Default if the
Company shall have made a valid extension of the interest payment
period with respect to such series of Indenture Securities if so
provided with respect to such series; or
(b) failure to pay any principal or premium, if any, on such
series of Indenture Securities within 3 business days after its
maturity; provided, however, that no such failure shall
constitute an Event of Default if the Company shall have made a
valid extension of the maturity of such series of Indenture
Securities, if so provided with respect to such series; or
(c) failure to perform, or breach of, any covenant or
warranty of the Company contained in the Indenture for 90 days
after written notice to the Company from the Trustee or to the
Company and the Trustee by the holders of at least 25% in
principal amount of such series of outstanding Indenture
Securities as provided in the Indenture unless the Trustee, or
the Trustee and the holders of a principal amount of Securities
of such series not less than the principal amount of Indenture
Securities the holders of which gave such notice, as the case may
be, agree in writing to an extension of such period prior to its
expiration; provided, however, that the Trustee, or the Trustee
and the holders of such principal amount of Indenture Securities
of such series, as the case may be, will be deemed to have agreed
to an extension of such period if corrective action is initiated
by the Company within such period and is being diligently
pursued; or
(d) default under any bond, debenture, note or other
evidence of indebtedness of the Company for borrowed money
(including Indenture Securities of other series) or under any
mortgage, indenture, or other instrument to evidence any
indebtedness of the Company for borrowed money, which default (1)
shall constitute a failure to make any payment in excess of
$5,000,000 of the principal of, or interest on, such indebtedness
or (2) shall have resulted in such indebtedness in an amount in
excess of $10,000,000 becoming or being declared due and payable
prior to the date it would otherwise have become due and payable,
without such payment having been made, such indebtedness having
been discharged, or such acceleration having been rescinded or
annulled, within a period of 90 days after written notice to the
Company by the Trustee or to the Company and the Trustee by the
holders of at least 25% in principal amount of the Securities of
such series outstanding under the Indenture, as provided in the
Indenture; or
(e) certain events in bankruptcy, insolvency or
reorganization of the Company.
7
<PAGE>
REMEDIES
If an Event of Default applicable to the Indenture Securities of
any series occurs and is continuing, then either the Trustee or the
holders of not less than 33% in aggregate principal amount of the
outstanding Indenture Securities of such series may declare the
principal of all of the Indenture Securities of such series and
interest accrued thereon to be due and payable immediately by written
notice to the Company (and to the Trustee if given by the holders of
Indenture Securities); provided, however, that if an Event of Default
occurs and is continuing with respect to more than one series of
Indenture Securities, the Trustee or the holders of not less than 33%
in aggregate principal amount of the outstanding Indenture Securities
of all such series, considered as one class, may make such declaration
of acceleration and not the holders of the Indenture Securities of any
one such series.
At any time after such a declaration of acceleration with respect
to the Indenture Securities of any series has been made, but before a
judgment or decree for payment of the money due has been obtained,
such declaration and its consequences will, without further act, be
deemed to have been rescinded and annulled, if
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(1) all overdue interest, if any, on all Indenture
Securities of such series;
(2) the principal of and premium, if any, on any
Indenture Securities of such series which have become due
otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in
such Indenture Securities;
(3) interest upon overdue interest at the rate or rates
prescribed therefor in such Indenture Securities, to the
extent that payment of such interest is lawful; and
(4) all amounts due to the Trustee under the Indenture;
and
(b) all Events of Default with respect to Indenture
Securities of such series, other than the non-payment of the
principal of the Indenture Securities of such series which has
become due solely by such declaration of acceleration, have been
cured or waived as provided in the Indenture.
If an Event of Default with respect to the Indenture Securities
of any series occurs and is continuing, the holders of a majority in
principal amount of the outstanding Indenture Securities of such
series will have the right to direct the time, method and place of
conducting any proceedings for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee; provided,
however, that if an Event of Default occurs and is continuing with
respect to more than one series of Indenture Securities, the holders
of a majority in aggregate principal amount of the outstanding
Indenture Securities of all such series, considered as one class, will
have the right to make such direction, and not the holders of the
Indenture Securities of any one of such series; and provided, further,
that (a) such direction does not conflict with any rule of law or with
the Indenture, and could not involve the Trustee in personal liability
in circumstances where indemnity would not, in the Trustee's sole
discretion, be adequate and (b) the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such
direction.
The Indenture provides that no holder of any Indenture Security
will have any right to institute any proceeding, judicial or
otherwise, with respect to the Indenture or for the appointment of a
receiver or for any other remedy thereunder unless (a) such holder has
previously given to the Trustee written notice of a continuing Event
of Default with respect to the Indenture Securities of any one or more
series; (b) the holders of a majority in aggregate principal amount of
the outstanding Indenture Securities of all series in respect of which
such Event of Default has occurred, considered as one class, have made
written request to the Trustee to institute proceedings in respect of
such Event of Default and have offered the Trustee reasonable
indemnity against costs and liabilities to be incurred in complying
with such request; and (c) for 60 days after receipt of such notice,
the Trustee has failed to institute any such proceeding and no
direction inconsistent with such request has been given to the Trustee
during such 60 day period by the holders of a majority in aggregate
principal amount of Indenture Securities then outstanding.
Furthermore, no holder of Indenture Securities of any series will be
entitled to institute any such action if and to the extent that such
action would disturb or prejudice the rights of other holders of
Indenture Securities of such series. Notwithstanding that the right of
a holder to institute a proceeding with respect to the Indenture is
8
<PAGE>
subject to certain conditions precedent, each holder of an Indenture
Security will have the right, which is absolute and unconditional, to
receive payment of the principal of and premium, if any, and interest,
if any, on such Indenture Security when due and to institute suit for
the enforcement of any such payment, and such rights may not be
impaired or affected without the consent of such holder. The Indenture
provides that the Trustee give the holders notice of any default under
the Indenture to the extent required by the Trust Indenture Act,
unless such default shall have been cured or waived, except that no
such notice to holders of a default of the character described in
clause (c) under "- Events of Default" may be given until at least 75
days after the occurrence thereof. For purposes of the preceding
sentence, the term "default" means any event which is, or after notice
or lapse of time, or both, would become, an Event of Default. The
Trust Indenture Act currently permits the Trustee to withhold notices
of default (except for certain payment defaults) if the Trustee in
good faith determines the withholding of such notice to be in the
interests of the holders.
The Company is required to file annually with the Trustee a
certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the Indenture.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Company shall not consolidate
with or merge into any other Person, or convey or otherwise transfer,
or lease, all of its properties, as or substantially as an entirety,
to any Person, unless the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance
or other transfer, or which leases (for a term extending beyond the
last Stated Maturity of the Indenture Securities then outstanding),
all of the properties of the Company, as or substantially as an
entirety, shall be a Person organized and existing under the laws of
the United States, any State or Territory thereof or the District of
Columbia or under the laws of Canada or any Province thereof and shall
expressly assume the due and punctual payment of the principal of and
premium, if any, and interest, if any, on all the Indenture Securities
then outstanding and the performance and observance of every covenant
and condition of the Indenture to be performed or observed by the
Company. In the case of the conveyance or other transfer, or lease, of
all of the properties of the Company, as or substantially as an
entirety, to any person as contemplated above, the Company would be
released and discharged from all obligations under the Indenture and
on all Indenture Securities then outstanding unless the Company elects
to waive such release and discharge. Upon any such consolidation or
merger or any such conveyance, transfer or lease of properties of the
Company, the successor, transferee or lessee shall succeed to, and be
substituted for, and may exercise every power and right of, the
Company under the Indenture. For purposes of the Indenture, the
conveyance, other transfer, or lease by the Company of all of its
facilities (a) for the generation of electric energy, (b) for the
transmission of electric energy or (c) for the distribution of
electric energy and/or natural gas, in each case considered alone, or
all of its facilities described in clauses (a) and (b), considered
together, or all of its facilities described in clauses (b) and (c),
considered together, shall in no event be deemed to constitute a
conveyance or other transfer of all the properties of the Company, as
or substantially as an entirety, unless, immediately following such
conveyance, transfer or lease, the Company shall own no unleased
properties in the other such categories of property not so conveyed or
otherwise transferred or leased.
If the Company shall convey or otherwise transfer any part of its
properties which does not constitute the entirety, or substantially
the entirety, thereof to another Person meeting the requirements set
forth in the preceding paragraph, and if (a) such transferee shall
expressly assume the due and punctual payment of the principal of and
premium, if any, and interest, if any, on all Indenture Securities
then outstanding and the performance and observance of every covenant
and condition of the Indenture to be performed or observed by the
Company, and (b) there shall be delivered to the Trustee an
independent expert's certificate (i) describing the property so
conveyed or transferred and identifying the same as facilities for the
generation, transmission or distribution of electric energy or for the
storage, transportation or distribution of natural gas and (ii)
stating that the aggregate principal amount of the Indenture
Securities then outstanding does not exceed 70% of the fair value of
such property, then the Company shall be released and discharged from
all obligations and covenants under the Indenture and on all Indenture
Securities then outstanding unless the Company elects to waive such
release and discharge. In such event, the transferee shall succeed to,
and be substituted for, and may exercise every right and power of, the
Company under the Indenture.
SATISFACTION AND DISCHARGE
Any Indenture Securities, or any portion of the principal amount
thereof, will be deemed to have been paid for purposes of the
Indenture and, at the Company's election, the entire indebtedness of
the Company in respect thereof will be deemed to have been satisfied
9
<PAGE>
and discharged, if there shall have been irrevocably deposited with
the Trustee or any Paying Agent (other than the Company), in trust:
(a) money in an amount which will be sufficient, or (b) in the case of
a deposit made prior to the maturity of such Indenture Securities,
Eligible Obligations, which do not contain provisions permitting the
redemption or other prepayment thereof at the option of the issuer
thereof, the principal of and the interest on which when due, without
any regard to reinvestment thereof, will provide moneys which,
together with the money, if any, deposited with or held by the Trustee
or such Paying Agent, will be sufficient, or (c) a combination of (a)
and (b) which will be sufficient, to pay when due the principal of and
premium, if any, and interest, if any, due and to become due on such
Indenture Securities. For this purpose, Eligible Obligations include
direct obligations of, or obligations unconditionally guaranteed by,
the United States entitled to the benefit of the full faith and credit
thereof and certificates, depositary receipts or other instruments
which evidence a direct ownership interest in such obligations or in
any specific interest or principal payments due in respect thereof and
such other obligations or instruments as shall be specified in an
accompanying Prospectus Supplement.
The Indenture will be deemed to have been satisfied and
discharged when no Indenture Securities remain outstanding thereunder
and the Company has paid or caused to be paid all other sums payable
by the Company under the Indenture.
INFORMATION CONCERNING THE TRUSTEE
The Trustee will have, and will be subject to, all the duties and
responsibilities specified with respect to an indenture trustee under
the Trust Indenture Act. Subject to such provisions, the Trustee will
be under no obligation to exercise any of the powers vested in it by
the Indenture at the request of any holder of Indenture Securities,
unless offered reasonable indemnity by such holder against the costs,
expenses and liabilities which might be incurred thereby. The Trustee
will not be required to expend or risk its own funds or otherwise
incur personal financial liability in the performance of its duties if
the Trustee reasonably believes that repayment or adequate indemnity
is not reasonably assured to it.
The Trustee may resign at any time with respect to the Indenture
Securities of one or more series by giving written notice thereof to
the Company or may be removed at any time with respect to the
Indenture Securities of one or more series by Act of the Holders of a
majority in principal amount of the outstanding Indenture Securities
of such series delivered to the Trustee and the Company. No
resignation or removal of the Trustee and no appointment of a
successor trustee will become effective until the acceptance of
appointment by a successor trustee in accordance with the requirements
of the Indenture. So long as no Event of Default or event which, after
notice or lapse of time, or both, would become an Event of Default has
occurred and is continuing, if the Company has delivered to the
Trustee with respect to one or more series a resolution of its Board
of Directors appointing a successor trustee with respect to that or
those series and such successor has accepted such appointment in
accordance with the terms of the Indenture, the Trustee with respect
to that or those series will be deemed to have resigned and the
successor will be deemed to have been appointed as trustee in
accordance with the Indenture.
EVIDENCE TO BE FURNISHED TO THE TRUSTEE
Compliance with the Indenture provisions is evidenced by written
statements of Company officers or persons selected or paid by the
Company. In certain cases, opinions of counsel and certifications of
an engineer, appraiser or other expert (who in some cases must be
independent) must be furnished. In addition, the Indenture requires
that the Company give the Trustee, not less than annually, a brief
statement as to the Company's compliance with the conditions and
covenants under the Indenture.
GOVERNING LAW
The Indenture and the Indenture Securities will be governed by
and construed in accordance with the laws of the State of New York,
except to the extent that the Trust Indenture of 1939, as amended,
shall be applicable.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities in any of four ways: (i)
directly to a limited number of institutional purchasers or to a
single purchaser, (ii) through agents, (iii) through underwriters or
10
<PAGE>
(iv) through dealers. The applicable Prospectus Supplement relating to
each series of Debt Securities will set forth the terms of the
offering of such Debt Securities, including the name or names of any
such agents, underwriters or dealers, the purchase price of such Debt
Securities and the net proceeds to the Company from such sale, any
underwriting discounts and other items constituting underwriters'
compensation, the initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers. Any initial
public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
If underwriters are used in any sale of Debt Securities, such
Debt Securities will be acquired by such underwriters for their own
account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale.
Unless otherwise set forth in the Prospectus Supplement relating to a
series of Debt Securities, the obligations of any underwriter or
underwriters to purchase such Debt Securities will be subject to
certain conditions precedent, and such underwriter or underwriters
will be obligated to purchase all of such Debt Securities if any are
purchased, except that, in certain cases involving a default by one or
more underwriters, less than all of such Debt Securities may be
purchased.
If an agent of the Company is used in any sale of a series of
Debt Securities, any commissions payable by the Company to such agent
will be set forth in the applicable Prospectus Supplement relating to
such Debt Securities. Unless otherwise indicated in the applicable
Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
Any underwriters, dealers or agents participating in the
distribution of the Debt Securities may be deemed to be underwriters,
and any discounts or commissions received by them on the sale or
resale of Debt Securities may be deemed to be underwriting discounts
and commissions, under the Securities Act. Agents, underwriters and
dealers may be entitled under agreements entered into with the Company
to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act.
Unless otherwise provided in the applicable Prospectus Supplement
relating to a series of Debt Securities, the Company does not intend
to apply for the listing of the Notes on a national securities
exchange, but has been advised by the agents that the agents intend to
make a market in the Notes, as permitted by applicable laws and
regulations. The agents are not obligated to do so, however, and the
agents may discontinue making a market at any time without notice. No
assurance can be given as to the liquidity of any trading market for
the Notes.
The agents and/or certain of their affiliates may engage in
transactions with and perform services for the Company and certain of
its affiliates in the ordinary course of business.
LEGAL MATTERS
Certain matters of New York law and of federal securities laws
relating to the validity of the Debt Securities and certain matters
relating thereto will be passed upon for the Company by Reid & Priest
LLP, New York, New York, counsel to the Company. Certain matters of
Washington corporate law and of public utility regulatory approvals
under Washington, Idaho, Montana, Oregon and California law relating
to the authorization of the Debt Securities will be passed upon for
the Company by Paine, Hamblen, Coffin, Brooke & Miller LLP, Spokane,
Washington, general counsel for the Company. The validity of the Debt
Securities will be passed upon for the underwriters by Sullivan &
Cromwell, New York, New York. In giving their opinions Reid & Priest
LLP and Sullivan & Cromwell may assume the conclusions of Washington,
California, Idaho, Montana and Oregon law set forth in the opinion of
Paine, Hamblen, Coffin, Brooke & Miller LLP.
EXPERTS
The financial statements and the related financial statement
schedules incorporated in this Prospectus by reference from the
Company's Latest Annual Report on Form 10-K have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
11
<PAGE>
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION (ESTIMATED).
Filing fee -- Securities and Exchange Commission ....... $ 75,757.58
Fees of state regulatory authorities ................... 8,000.00
Legal counsel fees ..................................... 200,000.00
Trustee's fees ......................................... 25,000.00
Auditors' fees ......................................... 30,000.00
Fees of rating agencies ................................ 160,000.00
Blue Sky counsel and filing fees ....................... 10,000.00
Printing, including Form S-3, prospectus, exhibits, etc 10,000.00
Miscellaneous expenses ................................. 1,242.42
--------------
Total Estimated Expenses ............................ $ 520,000.00
==============
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Seventh of the Company's Restated Articles of
Incorporation ("Articles") provides, in part, as follows:
"The Corporation shall, to the full extent permitted by
applicable law, as from time to time in effect, indemnify any person
made a party to, or otherwise involved in, any proceeding by reason of
the fact that he or she is or was a director of the Corporation
against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by him or her in connection with any such
proceeding. The Corporation shall pay any reasonable expenses incurred
by a director in connection with any such proceeding in advance of the
final determination thereof upon receipt from such director of such
undertakings for repayment as may be required by applicable law and a
written affirmation by such director that he or she has met the
standard of conduct necessary for indemnification, but without any
prior determination, which would otherwise be required by Washington
law, that such standard of conduct has been met. The Corporation may
enter into agreements with each director obligating the Corporation to
make such indemnification and advances of expenses as are contemplated
herein. Notwithstanding the foregoing, the Corporation shall not make
any indemnification or advance which is prohibited by applicable law.
The rights to indemnity and advancement of expenses granted herein
shall continue as to any person who has ceased to be a director and
shall inure to the benefit of the heirs, executors and administrators
of such a person."
The Company has entered into indemnification agreements with each
director as contemplated in Article Seventh of the Articles.
Reference is made to Revised Code of Washington 23B.08.510, which
sets forth the extent to which indemnification is permitted under the
laws of the State of Washington.
Article IX of the Company's Bylaws contains an indemnification
provision similar to that contained in the Articles and, in addition,
provides in part as follows:
"SECTION 2. LIABILITY INSURANCE. The Corporation shall have the
power to purchase and maintain insurance on behalf of any person who
is, or was a director, officer, employee, or agent of the Corporation
or is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust, other enterprise, or employee benefit plan against any
liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such
liability under the laws of the State of Washington."
II-1
<PAGE>
Insurance is maintained on a regular basis (and not specifically
in connection with this offering) against liabilities arising on the
part of directors and officers out of their performance in such
capacities or arising on the part of the Company out of its foregoing
indemnification provisions, subject to certain exclusions and to the
policy limits.
ITEM 16. EXHIBITS.
Reference is made to the Exhibit Index on p. II-5 hereof.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in this
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") that are incorporated by reference
in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant
to Section 13(a) or 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference
in this registration statement shall be deemed to be a new
registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(5) That, for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon rule
430A and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as of the
time it was declared effective.
II-2
<PAGE>
(6) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(7) To provide to the underwriter at the closing specified in the
underwriting agreements, certificates in such denominations and
registered in such names as required by the underwriter to permit
prompt delivery to each purchaser.
(8) That, insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant have been advised that in the
opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted against either of the registrant by such
director, officer or controlling person in connection with the
securities being registered, such registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
POWER OF ATTORNEY
The Registrant hereby appoints each Agent for Service named in
this Registration Statement as its attorney-in- fact to sign in their
name and behalf, and to file with the Commission any and all
amendments, including post- effective amendments, to this Registration
Statement, and each director and/or officer of the Registrant whose
signature appears below hereby appoints each such Agent for Service as
his attorney-in-fact with like authority to sign in his name and
behalf, in any and all capacities stated below, and to file with the
Commission, any and all such amendments.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Spokane and
State of Washington on the 4th day of November, 1997.
THE WASHINGTON WATER POWER COMPANY
By /s/ Paul A. Redmond
---------------------------------
Paul A. Redmond
Chairman of the Board and Chief
Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
Signature Title Date
--------- ----- ----
/s/ PAUL A. REDMOND Principal Executive November 4, 1997
- ----------------------------- Officer and Director
Paul A. Redmond
(Chairman of the Board and
Chief Executive Officer)
/s/ J.E. ELIASSEN Principal Financial and November 4, 1997
- ----------------------------- Accounting Officer
J.E. Eliassen
(Senior Vice President
and Chief Financial Officer)
/s/ W. LESTER BRYAN Director November 4, 1997
- -----------------------------
W. Lester Bryan
(President and Chief
Operating Officer)
/s/ DAVID A. CLACK Director November 4, 1997
- -----------------------------
David A. Clack
/s/ DUANE B. HAGADONE Director November 4, 1997
- -----------------------------
Duane B. Hagadone
/s/ SARAH M.R. JEWEL Director November 4, 1997
- -----------------------------
Sarah M.R. Jewel
/s/ JOHN F. KELLY Director November 4, 1997
- -----------------------------
John F. Kelly
/s/ EUGENE W. MEYER Director November 4, 1997
- -----------------------------
Eugene W. Meyer
/s/ BOBBY SCHMIDT Director November 4, 1997
- -----------------------------
Bobby Schmidt
/s/ LARRY A. STANLEY Director November 4, 1997
- -----------------------------
Larry A. Stanley
/s/ R. JOHN TAYLOR Director November 4, 1997
- -----------------------------
R. John Taylor
II-4
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
*1(a) Form of Underwriting Agreement for offering of Debt
Securities.
1(b) Form of Distribution Agreement for offering of Medium-Term
Notes.
4(a) Form of Indenture between The Washington Water Power Company
and The Chase Manhattan Bank, as Trustee.
4(b) Form of Officer's Certificate to be used in connection with
an underwritten public offering of Debt Securities.
4(c) Form of Officer's Certificate to be used in connection with
the issuance of Medium-Term Notes.
5(a) Opinion and Consent of Paine, Hamblen, Coffin, Brooke &
Miller LLP.
5(b) Opinion and Consent of Reid & Priest LLP.
23(a) Consent of Deloitte & Touche LLP.
23(b) Consents of Paine, Hamblen, Coffin, Brooke & Miller LLP and
Reid & Priest LLP are contained in Exhibits 5(a) and 5(b),
respectively.
24 Power of Attorney (included on page II-4 hereof).
25(a) Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Chase Manhattan Bank, as Trustee
under the Indenture.
- -----------------
* To be filed subsequently as an exhibit to a Current Report on Form 8-K.
II-5
The Washington Water Power Company
$250,000,000
Medium-Term Notes, Series C
Distribution Agreement
_____ __, 1997
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Merrill Lynch, Pierce, Fenner & Incorporated
World Financial Center
250 Vesey Street
New York, New York 10281
Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
The Washington Water Power Company, a Washington corporation
(the "Company"), proposes to issue and sell from time to time its
Medium-Term Notes, Series C (the "Securities") in an aggregate
principal amount up to $250,000,000 and agrees with each of you
(individually, an "Agent", and collectively, the "Agents") as set
forth in this Agreement.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell Securities directly on
its own behalf, the Company hereby (i) appoints each Agent as an agent
of the Company for the purpose of soliciting and receiving offers to
purchase Securities from the Company pursuant to Section 2(a) hereof
and (ii) agrees that, except as otherwise contemplated herein,
whenever it determines to sell Securities directly to any Agent as
principal, it will enter into a separate agreement, substantially in
the form of Annex I hereto (each a "Terms Agreement"), relating to
such sale in accordance with Section 2(b) hereof.
The Securities will be issued as a series under the
Company's Indenture, dated as of _______ __, 1997, to The Chase
Manhattan Bank, as trustee (the "Trustee") as it will be supplemented
by an Officer's Certificate dated ______ __, 1997 (said Indenture, as
so supplemented and as it may be amended and further supplemented
being hereinafter referred to as the "Indenture"). The Securities
shall have the maturity ranges, interest rates, if any, redemption
provisions and other terms set forth in the Prospectus referred to
below as it may be amended or supplemented from time to time. The
Securities will be issued, and the terms and rights thereof
established, from time to time by the Company in accordance with the
Indenture.
1. The Company represents and warrants to, and agrees with,
each Agent that:
(a) The Company has carefully prepared in conformity with
the requirements of the Securities Act of 1933, as amended (the
"Act"), and the applicable rules and regulations of the
Securities and Exchange Commission (the "Commission") (i) a
registration statement on Form S-3 (File No. 333-______) (the
"Registration Statement") for the registration of $250,000,000 in
aggregate principal amount of its Debt Securities. The
Registration Statement has become effective and no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose has been initiated
or threatened by the Commission. No Debt Securities registered
under the Registration Statement have been issued. A prospectus
supplement setting forth the terms of the Securities and of their
sale and distribution (the "Prospectus Supplement") has been or
will be so prepared and will be filed pursuant to Rule 424 under
the Act. The Registration Statement (including exhibits, but
excluding the Statement of Eligibility on Form T-1) in the form
in which it became effective, and as amended to the date hereof,
is herein referred to as the "Registration Statement"; the
prospectus included as a part of the Registration Statement, as
such prospectus may have been amended to the date hereof, is
hereinafter referred to as the "Basic Prospectus"; and the Basic
Prospectus, as supplemented by the Prospectus Supplement, is
herein referred to as the "Prospectus"; provided, however, that
(i) any reference herein to the terms "Registration Statement",
"Basic Prospectus" or "Prospectus" shall be deemed to refer to
and include the documents incorporated therein by reference
pursuant to Item 12 of Form S-3 under the Act, (ii) any reference
to any amendment or supplement to the Prospectus shall be deemed
to refer to and include any documents filed after the date of the
Prospectus pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and so incorporated by reference, (iii) any reference to the
Prospectus as amended or supplemented shall be deemed to refer to
and include the Prospectus as amended or supplemented (including
by any supplement to the Prospectus that sets forth only the
terms of a particular tranche of the Securities (a "Pricing
Supplement") filed in accordance with Section 4(a) hereof) in
relation to the Securities sold pursuant to this Agreement, in
the form filed with the Commission pursuant to Rule 424(b) under
the Act and in accordance with Section 4(a) hereof, including any
documents incorporated by reference therein as of the date of
such filing) and (iv) no prospectus supplement to the Basic
Prospectus which relates to securities of the Company other than
the Securities shall be deemed to be a part of the Basic
Prospectus or the Prospectus;
(b) The Registration Statement when it became effective
complied, and the Prospectus and any amendments or supplements
thereto will comply, in all material respects with the applicable
provisions of the Act and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the applicable rules and
regulations of the Commission thereunder and do not and will not,
as of the applicable effective date in the case of the
Registration Statement and any amendment thereto, and as of the
applicable date referred to in Section 4(g) hereof and as of the
applicable filing date in the case of the Prospectus and any
supplement thereto, contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or
omitted from any such document in reliance upon and in conformity
with information furnished in writing to the Company by any Agent
specifically for use in the preparation thereof;
(c) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, complied in all material respects
with the requirements of the Act or the Exchange Act, and the
applicable rules and regulations of the Commission thereunder,
and none of such documents included an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; and any further documents so filed and incorporated
by reference in the Prospectus, or any amendment or supplement
thereto, when such documents become effective or are filed with
the Commission, as the case may be, will comply in all material
respects with the applicable requirements of the Act or the
Exchange Act, and the applicable rules and regulations of the
Commission thereunder, and will not contain an untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or
omitted from any such document in reliance upon and in conformity
with information furnished in writing to the Company by any Agent
specifically for use in the preparation thereof;
(d) Except as set forth in or contemplated by the Prospectus
as amended or supplemented, (i) since the date as of which
information is given in the Prospectus as amended or supplemented
there has not been any material adverse change in the condition
of the Company and its subsidiaries as a whole, financial or
otherwise, (ii) since the date of the Prospectus as amended or
supplemented there has not been any transaction entered into by
the Company or any subsidiary thereof which is material to the
Company and its subsidiaries as a whole other than transactions
in the ordinary course of business and (iii) neither the Company
nor any of its subsidiaries has any contingent obligation which
is material to the Company and its subsidiaries as a whole;
(e) The Securities have been duly authorized, and when
issued and delivered pursuant to this Agreement and any Terms
Agreement, and duly authenticated by the Trustee pursuant to the
Indenture, will have been duly executed, authenticated, issued
and delivered and will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by
the Indenture; the Indenture has been duly authorized and
qualified under the Trust Indenture Act and constitutes a valid
and legally binding instrument; the Indenture is, and the
Securities, when authenticated, issued and delivered as
aforesaid, will be, enforceable in accordance with their
respective terms, except to the extent that enforcement thereof
may be limited by any applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other laws
affecting creditors' rights generally, by general principles of
equity (whether asserted in an action in equity or at law) and by
rules of law governing specific performance, injunctive relief,
foreclosure, receivership and other equitable remedies; and the
Indenture and the Securities of any particular tranche will conform
in all material respects to the descriptions thereof contained in
the Prospectus as amended or supplemented to relate to the Securities
of such tranche;
(f) The issue and sale of the Securities, the compliance by
the Company with all of the provisions of the Securities, the
Indenture, this Agreement and any Terms Agreement, and the
consummation by the Company of the transactions herein and
therein contemplated will not result in a breach or violation of
any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is a party or by
which the Company is bound or to which any of the property or
assets of the Company is subject, nor will such action result in
any violation of the provisions of any statute or the Restated
Articles of Incorporation, as amended, or the Bylaws, as amended,
of the Company or, to the best of the Company's knowledge,
information or belief, any order, rule or regulation of any court
or any federal or state regulatory authority or other
governmental agency or body having jurisdiction over the Company
or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with
any court or governmental agency or body is required for the
solicitation of offers to purchase Securities and the issue and
sale of the Securities or the consummation by the Company of the
other transactions contemplated by this Agreement, any Terms
Agreement or the Indenture, except such as have been, or will
have been prior to the Commencement Date (as defined in Section 3
hereof), obtained under the Act or the Trust Indenture Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue
Sky laws in connection with the solicitation by such Agent of
offers to purchase Securities from the Company and with purchases
of Securities by such Agent as principal, as the case may be, and
such consents, approvals, authorizations, filings or
registrations as may be required by the Washington Utilities and
Transportation Commission, the California Public Utilities
Commission, the Idaho Public Utilities Commission and the Public
Utility Commission of Oregon, in each case in the manner
contemplated hereby;
(g) Except as set forth in or contemplated by the
Prospectus, as amended or supplemented, there are no legal or
governmental proceedings pending to which the Company or any of
its subsidiaries is a party or to which any property of the
Company or any of its subsidiaries is subject, which, if
determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse
effect on the consolidated financial position, stockholders'
equity or results of operations of the Company and its
subsidiaries, and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others; and
(h) Immediately after any sale of Securities by the Company
hereunder or under any Terms Agreement, the aggregate amount of
Securities which shall have been issued and sold by the Company
hereunder or under any Terms Agreement that shall have been
issued and sold pursuant to the Registration Statement will not
exceed the amount of Securities registered under the Registration
Statement.
2. (a) On the basis of the representations and warranties,
and subject to the terms and conditions herein set forth, each of the
Agents hereby severally and not jointly agrees, as agent of the
Company, to use its reasonable best efforts to solicit and receive
offers to purchase the Securities from the Company upon the terms and
conditions set forth in the Prospectus as amended or supplemented from
time to time. So long as this Agreement shall remain in effect with
respect to any Agent, the Company shall not, without the consent of
such Agent, which consent shall not unreasonably be withheld, solicit
or accept offers to purchase, or sell, any debt securities with a
maturity at the time of original issuance of nine months to 40 years
except pursuant to this Agreement or any Terms Agreement, or except
pursuant to a private placement not constituting a public offering
under the Act or except in connection with a firm commitment
underwriting pursuant to an underwriting agreement that does not
provide for a continuous offering of medium-term debt securities.
However, the Company reserves the right to sell, and may solicit and
accept offers to purchase, Securities directly on its own behalf, and,
in the case of any such sale not resulting from a solicitation made by
any Agent, no commission will be payable with respect to such sale.
These provisions shall not limit Section 4(f) hereof or any similar
provisions included in any Terms Agreement.
Procedural details relating to the issue and delivery of
Securities, the solicitation of offers to purchase Securities and the
payment in each case therefor shall be as set forth in the
Administrative Procedure attached hereto as Annex II as it may be
amended from time to time by written agreement between the Agents and
the Company (the "Administrative Procedure"). The provisions of the
Administrative Procedure shall apply to all transactions contemplated
hereunder other than those made pursuant to a Terms Agreement. Each
Agent and the Company agree to perform the respective duties and
obligations specifically provided to be performed by each of them in
the Administrative Procedure. The Company will furnish to the Trustee
a copy of the Administrative Procedure as from time to time in effect.
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time after the Commencement Date
(as defined in Section 3), for any period of time or permanently, the
solicitation of offers to purchase the Securities. As soon as
practicable, but in any event not later than one business day in New
York City, after receipt of notice from the Company, the Agents will
suspend solicitation of offers to purchase Securities from the Company
until such time as the Company has advised the Agents that such
solicitation may be resumed.
The Company agrees to pay each Agent a commission, at the
time of settlement of any sale of a Security by the Company as a
result of a solicitation made by such Agent, in an amount equal to the
following applicable percentage of the principal amount of such
Security sold:
Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities sold)
------------------- -------------------
From 9 months to less than 1 year 0.125%
From 1 year to less than 18 months 0.150%
From 18 months to less than 2 years 0.200%
From 2 years to less than 3 years 0.250%
From 3 years to less than 4 years 0.350%
From 4 years to less than 5 years 0.450%
From 5 years to less than 6 years 0.500%
From 6 years to less than 7 years 0.550%
From 7 years to less than 10 years 0.600%
From 10 years to less than 15 years 0.625%
From 15 years to less than 20 years 0.700%
From 20 years to less than 30 years 0.750%
From 30 years to 40 years 0.875%
(b) Each sale of Securities to any Agent as principal shall
be made in accordance with the terms of this Agreement and (unless the
Company and such Agent shall otherwise agree in writing or orally) a
Terms Agreement which will provide for the sale of such Securities to,
and the purchase thereof by, such Agent; it being understood that
(unless the Company and such Agent shall otherwise agree in writing)
any such oral agreement relating to the sale of Securities to such
Agent as principal (i) shall be deemed to incorporate all the terms
and conditions set forth in the form of Terms Agreement attached
hereto as Annex I and (ii) shall be promptly confirmed in writing. A
Terms Agreement may also specify certain provisions relating to the
reoffering of such Securities by such Agent. The commitment of any
Agent to purchase Securities as principal, whether pursuant to any
Terms Agreement or otherwise, shall be deemed to have been made on the
basis of the representations and warranties of the Company herein
contained and shall be subject to the terms and conditions herein set
forth. Each Terms Agreement shall specify the principal amount of
Securities to be purchased by any Agent pursuant thereto, the price to
be paid to the Company for such Securities, any provisions relating to
rights of, and default by, underwriters acting together with such
Agent in the reoffering of the Securities and the time and date and
place of delivery of and payment for such Securities. Such Terms
Agreement shall also specify any requirements for opinions of counsel,
accountants' letters and officers' certificates pursuant to Section 4
hereof.
For each sale of Securities to an Agent as principal that is
not made pursuant to a Terms Agreement, the procedural details
relating to the issue and delivery of such Securities and payment
therefor shall be as set forth in the Administrative Procedure and the
Company agrees to pay such Agent a commission (or grant an equivalent
discount) as provided in Section 2(a) hereof and in accordance with
the schedule set forth therein.
Each time and date of delivery of and payment for Securities
to be purchased by an Agent as principal, whether set forth in a Terms
Agreement or in accordance with the Administrative Procedure, is
referred to herein as a "Time of Delivery."
3. The documents required to be delivered pursuant to
Section 6 hereof on the Commencement Date (as defined below) shall be
delivered to the Agents at the offices of Reid & Priest LLP, 40 West
57th Street, New York, New York, at 11:00 a.m., New York City time, on
the date of this Agreement, which date and time of such delivery may
be postponed by agreement between the Agents and the Company but in no
event shall be later than the day prior to the date on which
solicitation of offers to purchase Securities is commenced or on which
any Terms Agreement is executed by the parties thereto (such time and
date being referred to herein as the "Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the
Registration Statement or the Prospectus (A) prior to the
Commencement Date to which any Agent shall reasonably disapprove
by notice to the Company promptly after reasonable notice thereof
or (B) after the date of any Terms Agreement or other agreement
by an Agent to purchase Securities as principal and prior to the
related Time of Delivery which shall be reasonably disapproved by
notice to the Company by any Agent party to such Terms Agreement
or so purchasing as principal promptly after reasonable notice
thereof; (ii) to prepare, with respect to any Securities to be
sold through or to such Agent pursuant to this Agreement, a
Pricing Supplement with respect to such Securities in a form
previously approved by such Agent and to file such Pricing
Supplement pursuant to Rule 424(b)(3) under the Act not later
than the close of business of the Commission on the third
business day following the date on which such Pricing Supplement
is first used; (iii) to make no amendment or supplement to the
Registration Statement or Prospectus, other than any Pricing
Supplement, at any time prior to having afforded each Agent a
reasonable opportunity to review and comment thereon; (iv) to
file in a timely manner all reports and any definitive proxy or
information statements required to be filed by the Company with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of the
Securities, and during such period to advise such Agent, promptly
after the Company received notices thereof, of the time when any
amendment to the Registration Statement has been filed or has
become effective or any supplement to the Prospectus or any
amended Prospectus (other than any Pricing Supplement that
relates to Securities not purchased through or by such Agent) has
been filed with the Commission, of the issuance by the Commission
of any stop order or of any order preventing or suspending the
use of any prospectus relating to the Securities, of the
suspension of the qualification of the Securities for offering or
sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the
Commission for the amendment or supplement of the Registration
Statement or Prospectus or for additional information; (v) in the
event of the issuance of any such stop order or of any such order
preventing or suspending the use of any such prospectus or
suspending any such qualification, to use promptly every
reasonable effort to obtain its withdrawal; and (vi) to notify
the Agents promptly of any change in the rating assigned by any
nationally recognized statistical rating organization to any debt
securities of the Company (including the Securities) of the
Company, or the public announcement by any nationally recognized
statistical rating organization that it has under surveillance or
review, with possible negative implications, its rating of the
Securities or any such debt securities, or the withdrawal by any
nationally recognized statistical rating organization of its
rating of the Securities or any such debt securities.
(b) Promptly from time to time to take such action as such
Agent may reasonably request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions
as may be approved by the Company and to comply with such laws so
as to permit the continuance of sales and dealings therein for as
long as may be necessary to complete the distribution or sale of
the Securities; provided, however, that in connection therewith
the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in
any jurisdiction, or to comply with any other requirement
reasonably deemed by the Company to be unduly burdensome;
(c) To furnish such Agent with copies of the Registration
Statement and each amendment thereto, and with copies of the
Prospectus as each time amended or supplemented, other than any
Pricing Supplement (except as provided in the Administrative
Procedure), in the form in which it is filed with the Commission
pursuant to Rule 424 under the Act, in such quantities as such
Agent may reasonably request from time to time, and with copies
of the documents incorporated by reference therein; and, if the
delivery of a prospectus is required at any time in connection
with the offering or sale of the Securities (including Securities
purchased from the Company by such Agent as principal) and if at
such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary at such time to amend or supplement
the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply
with the Act, the Exchange Act or the Trust Indenture Act, to
notify such agent and request such Agent, in its capacity as
agent of the Company, to suspend solicitation of offers to
purchase Securities from the Company (and, if so notified, such
Agent shall cease such solicitations as soon as practicable, but
in any event not later than one business day later); and if the
Company shall decide to amend or supplement the Registration
Statement or the Prospectus as then amended or supplemented, to
so advise such Agent promptly by telephone (with confirmation in
writing) and to prepare and cause to be filed promptly with the
Commission an amendment or supplement to the Registration
Statement or the Prospectus as then amended or supplemented or to
file any document under the Exchange Act that will correct such
statement or omission or effect such compliance; provided,
however, that, should such event relate solely to activities of
any Agent, then such Agent shall assume the expense of preparing
and furnishing any such amendment or supplement; and provided,
further, that if at such time such Agent continues to own
Securities purchased from the Company by such Agent as principal
or such Agent is otherwise required to deliver a prospectus in
respect of transactions in the Securities, the Company shall
promptly prepare and file with the Commission such an amendment
or supplement. For the purposes of this subsection (c), the
Company shall be entitled to assume that a Prospectus shall no
longer be required to be delivered under the Act from and after
the date six months from the date of the purchase thereof by an
Agent as principal, unless it shall have received notice from
such Agent to the contrary;
(d) To make generally available to its security-holders as
soon as practicable, but in any event not later than eighteen
months after (i) the effective date of the Registration
Statement, (ii) the effective date of each post-effective
amendment to the Registration Statement, and (iii) the date of
each filing by the Company with the Commission of an Annual
Report on Form 10-K that is incorporated by reference in the
Registration Statement, an earning statement of the Company and
its subsidiaries (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company,
Rule 158);
(e) For the period ending five years from the date any
Securities are sold by the Company pursuant to an offer solicited
by such Agent, to furnish to such Agent copies of all reports or
other communications (financial or other) furnished to
stockholders, and deliver to such Agent (i) as soon as they are
available, copies of any reports and financial statements
furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the
Company is listed and (ii) such additional information concerning
the business and financial condition of the Company as such Agent
may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally or to the
Commission);
(f) That, from the date of any Terms Agreement with such
Agent or other agreement by such Agent to purchase Securities as
principal and continuing to and including the earlier of (i) the
termination of the trading restrictions for the Securities
purchased thereunder, as notified to the Company by such Agent
and (ii) the related Time of Delivery, it will not offer, sell,
contract to sell or otherwise dispose of any debt securities of
the Company in a public offering which both mature more than nine
months after such Time of Delivery and are substantially similar
to the Securities, without the prior written consent of such
Agent;
(g) That each acceptance by the Company of an offer to
purchase Securities hereunder (including any purchase by such
Agent as principal not pursuant to a Terms Agreement), and each
execution and delivery by the Company of a Terms Agreement with
such Agent, shall be deemed to be an affirmation to such Agent
that the representations and warranties of the Company contained
in or made pursuant to this Agreement are true and correct as of
the date of such acceptance or of such Terms Agreement, as the
case may be, as though made at and as of such date, and an
undertaking that such representations and warranties will be true
and correct as of the settlement date for the Securities relating
to such acceptance or as of the Time of Delivery relating to such
sale, as the case may be, as though made at and as of such date
(except that such representations and warranties shall be deemed
to relate to the Registration Statement and the Prospectus as
amended and supplemented relating to such Securities);
(h) That reasonably in advance of each time the Registration
Statement or the Prospectus shall be amended or supplemented
(other than by a Pricing Supplement) and each time a document
filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus, and each time the Company sells
Securities to such Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of an
opinion or opinions by Sullivan & Cromwell, of New York, New
York, counsel to the Agents, as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall
furnish to such counsel such papers and information as they may
reasonably request to enable them to furnish to such Agent such
opinion or opinions referred to in Section 6(c) hereof;
(i) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a
Pricing Supplement), each time a document filed under the Act or
the Exchange Act is incorporated by reference into the Prospectus
(except for a Current Report on Form 8-K that is filed solely for
the purpose of filing exhibits pursuant to Item 601 of Regulation
S-K, unless the Agent shall otherwise reasonably request), and
each time the Company sells Securities to such Agent as principal
pursuant to a Terms Agreement and such Terms Agreement specifies
the delivery of an opinion under this Section 4(i) as a condition
to the purchase of Securities pursuant to such Terms Agreement,
the Company shall furnish or cause to be furnished forthwith to
such Agent a written opinion of Paine, Hamblen, Coffin, Brooke &
Miller LLP, of Spokane, Washington, General Counsel for the
Company, or other counsel for the Company satisfactory to such
Agent, dated the date of such amendment, supplement,
incorporation or Time of Delivery relating to such sale, as the
case may be, in form satisfactory to such Agent, to the effect
that such Agent may rely on the opinion of such counsel referred
to in Section 6(d) hereof which was last furnished to such Agent
to the same extent as though it were dated the date of such
letter authorizing reliance (except that the statements in such
last opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such
date) or, in lieu of such opinion, an opinion of the same tenor
as the opinion of such counsel referred to in Section 6(d) hereof
but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date;
(j) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a
Pricing Supplement), each time a document filed under the Act or
the Exchange Act is incorporated by reference into the Prospectus
(except for a Current Report on Form 8-K that is filed solely for
the purpose of filing exhibits pursuant to Item 601 of Regulation
S-K, unless any Agent shall reasonably request), and each time
the Company sells Securities to such Agent as principal pursuant
to a Terms Agreement and such Terms Agreement specifies the
delivery of an opinion under this Section 4(j) as a condition to
the purchase of Securities pursuant to such Terms Agreement, the
Company shall furnish or cause to be furnished forthwith to such
Agent a written opinion of Reid & Priest LLP, of New York, New
York, counsel for the Company, or other counsel for the Company
satisfactory to such Agent, dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to such
sale, as the case may be, in form satisfactory to such Agent, to
the effect that such Agent may rely on the opinion of such
counsel referred to in Section 6(e) hereof which was last
furnished to such Agent to the same extent as though it were
dated the date of such letter authorizing reliance (except that
the statements in such last opinion shall be deemed to relate to
the Registration Statement and the Prospectus as amended and
supplemented to such date), or, in lieu of such opinion, an
opinion of the same tenor as the opinion of such counsel referred
to in Section 6(e) hereof but modified to relate to the
Registration Statement and the Prospectus as amended and
supplemented to such date;
(k) That each time the Registration Statement or the
Prospectus shall be amended or supplemented, other than by a
Pricing Supplement, and each time that a document filed under the
Act or the Exchange Act is incorporated by reference into the
Prospectus, in either case to set forth financial information
included in or derived from the Company's consolidated financial
statements or accounting records, and each time the Company sells
Securities to such Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of a
letter under this Section 4(k) as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall
cause the independent certified public accountants who have
certified the financial statements of the Company and its
subsidiaries included or incorporated by reference in the
Registration Statement forthwith to furnish such Agent a letter,
dated the date of such amendment, supplement, incorporation or
Time of Delivery relating to such sale, as the case may be, in
form satisfactory to such Agent, of the same tenor as the letter
referred to in Section 6(f) hereof but modified to relate to the
Registration Statement and the Prospectus as amended or
supplemented to the date of such letter, with such changes as may
be necessary to reflect changes in the financial statements and
other information derived from the accounting records of the
Company, to the extent such financial statements and other
information are available as of a date not more than five
business days prior to the date of such letter; provided,
however, that, with respect to any financial information or other
matter, such letter may reconfirm as true and correct at such
date as though made at and as of such date, rather than repeat,
statements with respect to such financial information or other
matter made in the letter referred to in Section 6(f) hereof
which was last furnished to such Agent;
(l) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a
Pricing Supplement), each time a document filed under the Act or
the Exchange Act is incorporated by reference into the Prospectus
(except for a Current Report on Form 8-K that is filed solely for
the purpose of filing exhibits pursuant to Item 601 of Regulation
S-K, unless any Agent shall otherwise reasonably request), and
each time the Company sells Securities to such Agent as principal
and the applicable Terms Agreement specifies the delivery of a
certificate under this Section 4(1) as a condition to the
purchase of Securities pursuant to such Terms Agreement, the
Company shall furnish or cause to be furnished forthwith to such
Agent a certificate, dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to such
sale, as the case may be, in such form and executed by such
officers of the Company as shall be satisfactory to such Agent,
to the effect that the statements contained in the certificate
referred to in Section 6(i) hereof which was last furnished to
such Agent are true and correct at such date as though made at
and as of such date (except that such statements shall be deemed
to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date) or, in lieu of such
certificate, certificates of the same tenor as the certificates
referred to in said Section 6(i) but modified to relate to the
Registration Statement and the Prospectus as amended and
supplemented to such date;
(m) To offer to any person who has agreed to purchase
Securities as the result of an offer to purchase solicited by
such Agent the right to refuse to purchase and pay for such
Securities if, on the related settlement date fixed pursuant to
the Administrative Procedure, any condition set forth in Section
6(a), 6(g) or 6(h) hereof shall not have been satisfied (it being
understood that the judgment of such person with respect to the
impracticability or inadvisability of such purchase of Securities
shall be substituted, for purposes of this Section 4(m), for the
respective judgments referred to therein of an Agent with respect
to certain matters referred to in such Sections 6(a), 6(g) and
6(h), and that such Agent shall have no duty or obligation
whatsoever to exercise the judgment permitted under such Sections
6(a), 6(g) and 6(h) on behalf of any such person);
(n) That prior to the issue and sale of Securities, the
Company will have received all consents, approvals,
authorizations, orders, registrations and qualifications of or
with any court or any federal or state regulatory authority or
other governmental agency or body having jurisdiction over the
Company or any of its properties which are legally required for
the issuance by the Company of such Securities, except for
consents, approvals, authorizations, registrations or
qualifications which may be required under the state securities
or Blue Sky laws as to which no covenant is made except as
provided in Section 4(b) hereof.
5. The Company covenants and agrees with each Agent that the
Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and
all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus, the
Prospectus and any Pricing Supplements and all other amendments and
supplements thereto and the mailing and delivering of copies thereof
to such Agent; (ii) the fees, disbursements and expenses of counsel
for the Agents in connection with the establishment of the program
contemplated hereby, any opinions to be rendered by such counsel
hereunder and the transactions contemplated hereunder; (iii) the cost
of printing, preparing by word processor or reproducing this
Agreement, any Terms Agreement, any Indenture, any Blue Sky and Legal
Investment Memoranda and any other documents in connection with the
offering, purchase, sale and delivery of the Securities; (iv) all
expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section
4(b) hereof, including fees and disbursements of counsel for the
Agents in connection with such qualification and in connection with
the Blue Sky and legal investment surveys; (v) any fees charged by
securities rating services for rating the Securities; (vi) any filing
fees incident to any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Securities;
(vii) the cost of preparing the Securities; (viii) the fees and
expenses of any Trustee and any agent of any Trustee and any transfer
or paying agent of the Company and the fees and disbursements of
counsel for any Trustee or such agent in connection with any Indenture
and the Securities; (ix) any advertising expenses connected with the
solicitation of offers to purchase and the sale of Securities so long
as such advertising expenses have been approved by the Company; (x)
all other reasonable costs, and expenses incident to the performance
of the Agents' obligations hereunder which are not otherwise
specifically provided for in this Section; and (xi) all other costs
and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section.
Except as provided in Sections 8 and 9 hereof, each Agent shall pay
all other expenses it incurs, including any expenses that may be
incurred pursuant to Section 4(c) hereof.
6. The obligation of any Agent, as agent of the Company, at
any time ("Solicitation Time") to solicit offers to purchase the
Securities and the obligation of any Agent to purchase Securities as
principal, pursuant to any Terms Agreement or otherwise, shall in each
case be subject, in such Agent's discretion, to the condition that all
representations and warranties and other statements of the Company
herein (and, in the case of an obligation of an Agent under a Terms
Agreement, in or incorporated in such Terms Agreement by reference)
are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(1) hereof that is prior to
such Solicitation Time or Time of Delivery, as the case may be, and at
and as of such Solicitation Time or Time of Delivery, as the case may
be, the condition that prior to such Solicitation Time or Time of
Delivery, as the case may be, the Company shall have performed all of
its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) (i) With respect to any Securities sold at or prior to
such Solicitation Time or Time of Delivery, as the case may be,
the Prospectus as amended or supplemented (including the Pricing
Supplement) with respect to such Securities shall have been filed
or transmitted for filing with the Commission pursuant to Rule
424(b) under the Act within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 4(a) hereof; (ii) no stop order
suspending the effectiveness of the Registration Statement shall
have been issued and no proceeding for that purpose shall be
pending before, or to the knowledge of the Company or the Agent
contemplated by, the Commission; and (iii) all requests of the
Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have
been complied with to the reasonable satisfaction of such Agent;
(b) There shall have been issued and there shall be in full
force and effect, appropriate orders of the Washington Utilities
and Transportation Commission, the California Public Utilities
Commission, the Idaho Public Utilities Commission and the Public
Utility Commission of Oregon permitting the issuance and sale of
the Securities on the terms herein set forth or contemplated, and
containing no provision reasonably unacceptable to the Agents (it
being understood that no such order in effect on the date of this
Agreement contains any such unacceptable provision);
(c) Sullivan & Cromwell, counsel to the Agents, shall have
furnished to such Agent (i) such opinion or opinions, dated the
Commencement Date, with respect to the incorporation of the
Company, the validity of the Indenture, the Securities, the
Registration Statement, the Prospectus as amended or supplemented
and other related matters as such Agent may reasonably request,
and (ii) if and to the extent requested by such Agent, with
respect to each applicable date referred to in Section 4(h)
hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, an opinion or opinions, dated such
applicable date, to the effect that such Agent may rely on the
opinion or opinions which were last furnished to such Agent
pursuant to this Section 6(c) to the same extent as though it or
they were dated the date of such letter authorizing reliance
(except that the statements in such last opinion or opinions
shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date) or, in any
case, in lieu of such an opinion or opinions, an opinion or
opinions of the same tenor as the opinions or opinions referred
to in clause (i) but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to such
date; and in each case such counsel shall have received such
papers and information as they may reasonably request to enable
them to pass upon such matters. In rendering such opinion or
opinions, Sullivan & Cromwell may rely, as to the incorporation
of the Company and as to all other matters governed by
Washington, California, Idaho, Montana or Oregon law, upon the
opinion of Paine, Hamblen, Coffin, Brooke & Miller referred to
below;
(d) Paine, Hamblen, Coffin, Brooke & Miller LLP, General
Counsel for the Company, or other counsel for the Company
satisfactory to such Agent, shall have furnished to such Agent
their written opinions, dated the Commencement Date and each
applicable date referred to in Section 4(i) hereof that is on or
prior to such Solicitation Time or Time of Delivery, as the case
may be, in form and substance satisfactory to such Agent, to the
effect set forth in Annex III.
In rendering such opinion or opinions, Paine, Hamblen,
Coffin, Brooke & Miller may rely as to all matters governed by
New York law and Federal laws relating to the issuance and sale
of securities upon the opinion of Reid & Priest LLP referred to
below;
(e) Reid & Priest LLP, counsel for the Company, or other
counsel for the Company satisfactory to such Agent, shall have
furnished to such Agent their written opinions, dated the
Commencement Date and each applicable date referred to in Section
4(j) hereof that is on or prior to such Solicitation Time or Time
of Delivery, as the case may be, in form and substance
satisfactory to such Agent, to the effect set forth in Annex IV.
In rendering such opinion or opinions, Reid & Priest LLP may
rely, as to the incorporation of the Company and as to all other
matters governed by Washington, California, Idaho, Montana or
Oregon law, upon the opinion of Paine, Hamblen, Coffin, Brooke &
Miller referred to above;
(f) Not later than 11:00 a.m., New York City time, on the
Commencement Date and on each applicable date referred to in
Section 4(k) hereof that is on or prior to such Solicitation Time
or Time of Delivery, as the case may be, the independent
certified public accountants who have certified the financial
statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement shall
have furnished to such Agent a letter, dated the Commencement
Date or such applicable date, as the case may be, in form and
substance satisfactory to such Agent, to the effect set forth in
Annex V hereto;
(g) Except as set forth in or contemplated by the
Prospectus, as amended or supplemented, (A) since the respective
dates as of which information is given in the Prospectus, as
amended or supplemented, there has not been any material adverse
change in the condition of the Company and its subsidiaries as a
whole, financial or otherwise, (B) since such dates there has not
been any transaction entered into by the Company or any
subsidiary thereof which is material to the Company and its
subsidiaries as a whole other than transactions in the ordinary
course of business, and (C) neither the Company nor any of its
subsidiaries has any contingent obligation which is material to
the Company and its subsidiaries as a whole, and the effect of
which, in any such case, is in the reasonable judgment of such
Agent, so material and adverse as to make it impracticable or
inadvisable to proceed with the solicitation by such Agent of
offers to purchase Securities from the Company or the purchase by
such Agent of Securities from the Company as principal, as the
case may be, on the terms and in the manner contemplated in the
Prospectus as amended or supplemented;
(h) There shall not have occurred any of the following: (i)
a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) trading of any
securities of the Company shall have been suspended or limited on
any securities exchange or in any over-the-counter market; (iii)
a general moratorium on commercial banking activities in New York
declared by either Federal or New York State authorities; (iv)
the outbreak of major hostilities or the material escalation of
existing hostilities so as to result in major hostilities, or the
declaration by the United States of a national emergency or war,
or other national or international calamity or crisis; or (v) any
downgrading in the rating accorded the Company's debt securities
by any "nationally recognized statistical rating organization"
(as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Act) or the placing by any such organization
of the Company's outstanding debt securities or preferred stock
on what is commonly termed a "watch list" for possible
downgrading; provided, however, that in the case of any event
described in clause (iv) or clause (v) above, the effect of such
event, in the reasonable judgment of such Agent, shall make it
impracticable or inadvisable to proceed with the solicitation of
offers to purchase Securities, the purchase of Securities from
the Company as principal, pursuant to the applicable Terms
Agreement or otherwise, or the enforcement of contracts for the
sale of Securities, as the case may be, on the terms and in the
manner contemplated in the Prospectus as amended or supplemented;
and
(i) The Company shall have furnished or caused to be
furnished to such Agent certificates of officers of the Company
dated the Commencement Date and each applicable date referred to
in Section 4(1) hereof that is on or prior to such Solicitation
Time or Time of Delivery, as the case may be, in such form and
executed by such officers of the Company as shall be satisfactory
to such Agent, as to the accuracy of the representations and
warranties of the Company herein at and as of the Commencement
Date or such applicable date, as the case may be, as to the
performance by the Company in all material respects of all of its
obligations hereunder to be performed at or prior to the
Commencement Date or such applicable date, as the case may be, as
to the matters set forth in subsections (a) and (g) of this
Section 6, and as to such other matters as such Agent may
reasonably request.
7. The obligation of the Company to sell and deliver
Securities, pursuant to any Terms Agreement or otherwise, shall in
each case be subject to the following conditions:
(a) On the Settlement Date for the Securities or Time of
Delivery, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall be pending
before, or to the knowledge of the Company or the Agent
contemplated by, the Commission.
(b) At or before the Settlement Date or Time of Delivery, as
the case may be, there shall have been issued, and there shall be
in full force and effect, appropriate orders of the Washington
Utilities and Transportation Commission, the California Public
Utilities Commission, the Idaho Public Utilities Commission and
the Public Utility Commission of Oregon permitting the issuance
and sale of the Securities on the terms herein set forth or
contemplated, and containing no provision reasonably unacceptable
to the Company (it being understood that no such order in effect
on the date of this Agreement contains any such unacceptable
provision).
If any of the conditions specified above in this Section
shall not have been fulfilled, the Terms Agreement may be terminated
by the Company without liability on the part of any party to any other
party, except for the obligation of the Company to pay certain
expenses to the extent provided for in Sections 6(h) and 6(i) hereof
and except for any liability under Section 8 hereof.
8. (a) The Company will indemnify and hold harmless each
Agent against any losses, claims, damages or liabilities, joint or
several, to which such Agent may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement, the
Prospectus, the Prospectus as amended or supplemented or any other
prospectus relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading;
and will reimburse such Agent for any legal or other expenses
reasonably incurred by it in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement, the Prospectus, the Prospectus as amended or
supplemented or any other prospectus relating to the Securities, or
any such amendment or supplement, in reliance upon and in conformity
with written information furnished to the Company by such Agent
specifically for use in the preparation thereof; and provided,
further, that, the indemnity agreement contained in this
subsection (a) shall not inure to the benefit of any Agent on account
of any such losses, claims, damages or liabilities (or actions in respect
thereof) arising from the sale of the Securities by or through such Agent
to any person if a copy of the Prospectus as it then may be amended or
supplemented (exclusive of the Incorporated Documents) shall not have
been given or sent to such person by such Agent with or prior to the
written confirmation of the sale involved to the extent that (i) the
Prospectus as so amended or supplemented would have cured the defect
in such document giving rise to such losses, claims, damages or
liabilities, (ii) sufficient quantities of the Prospectus as so amended
or supplemented were timely made available to such Agent and (iii) such
Agent shall not have reasonably objected to such amendment or supplement
pursuant to Section 4(a) hereof.
(b) Each Agent will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the
Company may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Prospectus, the Prospectus
as amended or supplemented or any other prospectus relating to the
Securities, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement, the Prospectus, the Prospectus
as amended or supplemented or any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance upon and
in conformity with written information furnished to the Company by
such Agent specifically for use in the preparation thereof; and will
reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending
any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under such subsection
for any legal expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation.
In any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual
or potential differing interests between them.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and each Agent on the other from the
offering of the Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates and the relative
fault of the Company on the one hand and the Agent on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the
Company on the one hand and each Agent on the other shall be deemed to
be in the same proportion as the total net proceeds from the sale of
Securities (before deducting expenses) received by the Company bear to
the total commissions or discounts received by such Agent in respect
thereof. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading relates to information supplied by
the Company on the one hand or by any Agent on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and each Agent agree that it would not be just and equitable
if contribution pursuant to this subsection (d) were determined by per
capita allocation (even if all Agents were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as
a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall,
except as limited by subsection (c) above, be deemed to include any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subsection (d), an Agent
shall not be required to contribute any amount in excess of the amount
by which the total public offering price at which the Securities
purchased by or through it were sold exceeds the amount of any damages
which such Agent has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
obligations of each of the Agents under this subsection (d) to
contribute are several in proportion to the respective purchases made
by it or through it to which such loss, claim, damage or liability (or
action in respect thereof) relates and are not joint.
(e) The obligations of the Company under this Section 8
shall be in addition to any liability which the Company may otherwise
have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Agent within the meaning of the Act;
and the obligations of each Agent under this Section 8 shall be in
addition to any liability which such Agent may otherwise have and
shall extend, upon the same terms and conditions, to each director of
the Company, to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the
Company within the meaning of the Act.
9. (a) Each Agent, in soliciting offers to purchase Securities
from the Company and in performing the other obligations of such Agent
hereunder (other than in respect of any purchase by an Agent as
principal pursuant to a Terms Agreement or otherwise), is acting
solely as agent for the Company and not as principal. Each Agent will
make reasonable efforts to assist the Company in obtaining performance
by each purchaser whose offer to purchase Securities from the Company
was solicited by such Agent and has been accepted by the Company, but
such Agent shall not have any liability to the Company in the event
such purchase is not consummated for any reason.
(b) If the Company shall default on its obligation to deliver
Securities to a purchaser whose offer it has accepted, the Company
shall (i) hold each Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such
offer any commission to which it would be entitled in connection with
such sale.
10. The respective indemnities, agreements, representations,
warranties and other statements by any Agent and the Company set forth
in or made pursuant to this Agreement shall remain in full force and
effect regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Agent or any controlling
person of any Agent or the Company, or any officer or director or any
controlling person of the Company, and shall survive each delivery of
and payment for any of the Securities.
11. The provisions of this Agreement relating to the solicitation
of offers to purchase securities from the Company may be suspended or
terminated at any time by the Company as to any Agent or by any Agent
as to such Agent upon the giving of written notice of such suspension
or termination to such Agent or the Company, as the case may be. In
the event of such suspension or termination with respect to any Agent,
(x) this Agreement shall remain in full force and effect with respect
to any Agent as to which such suspension or termination has not
occurred, (y) this Agreement shall remain in full force and effect
with respect to the rights and obligations of any party which have
previously accrued or which relate to Securities which are already
issued, agreed to be issued or the subject of a pending offer at the
time of such suspension or termination and (z) in any event, this
Agreement shall remain in full force and effect insofar as the fourth
paragraph of Section 2(a), Section 4(d), Section 4(e), Section 5,
Section 8, Section 9 and Section 10 hereof are concerned.
12. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and
advices hereunder shall be in writing, or by telephone if promptly
confirmed in writing, and if to Morgan Stanley & Co. Incorporated
shall be sufficient in all respects when delivered or sent by
facsimile transmission or registered mail to 1585 Broadway, 2nd Floor,
New York, New York 10036, Facsimile Transmission No. (212) 761-0780,
Attention: Manager - Continuously Offered Products, Telephone No.
(212) 761- 2000, with a copy to 1585 Broadway, 34th Floor, New York,
New York 10036, Facsimile Transmission No. (212) 761-0260, Attention:
Peter Cooper, Investment Banking Information Center, Telephone No.
(212) 761-8385, and if to Merrill Lynch, Pierce, Fenner & Smith
Incorporated shall be sufficient in all respects when delivered or
sent by facsimile transmission or registered mail to 250 Vesey Street,
New York, New York 10281, Facsimile Transmission No. (212) 449-____,
Attention: _____________, Telephone No. (212) 449-____, and if to
Smith Barney Inc. shall be sufficient in all respects when delivered
or sent by facsimile transmission or registered mail to 388 Greenwich
Street, New York, New York, 10013, Facsimile Transmission No. (212)
___-____, Attention: ______________, Telephone No. (212) ___-____, and
if to the Company shall be sufficient in all respects when delivered
or sent by facsimile transmission or registered mail to 1411 East
Mission Avenue, Spokane, Washington 99202, Attention: Treasurer,
Facsimile Transmission No. (509) 482-4879, Telephone No. (509)
489-0500.
13. This Agreement and any Terms Agreement shall be binding
upon, and inure solely to the benefit of, each Agent and the Company,
and to the extent provided in Section 8, Section 9 and Section 10
hereof, the officers and directors of the Company and any person who
controls any Agent or the Company, and their respective personal
representatives, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or any
Terms Agreement. No purchaser of any of the Securities through or from
any Agent hereunder shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day
when the office of the Commission in Washington, D.C. is open for
business.
15. THIS AGREEMENT AND ANY TERMS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
16. This Agreement and any Terms Agreement may be executed by any
one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be an original, but all of such
respective counterparts shall together constitute one and the same
instrument.
<PAGE>
If the foregoing is in accordance with your understanding, please
sign and return to us four counterparts hereof, whereupon this letter
and the acceptance by each of you thereof shall constitute a binding
agreement between the Company and each of you in accordance with its
terms.
Very truly yours,
THE WASHINGTON WATER POWER COMPANY
By:_______________________________
Title:
Accepted in New York, New York
as of the date hereof:
MORGAN STANLEY & CO. INCORPORATED
By:_______________________________
Title:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By:_______________________________
Title:
SMITH BARNEY INC.
By:_______________________________
Title:
<PAGE>
ANNEX I
The Washington Water Power Company
Medium-Term Notes, Series C
Terms Agreement
---------------
__________________, 19__
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
250 Vesey Street
New York, New York 10281
Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
The Washington Water Power Company (the "Company") proposes,
subject to the terms and conditions stated herein and in the
Distribution Agreement, dated _____ __, 1997 (the "Distribution
Agreement"), between the Company on the one hand and Morgan Stanley &
Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Smith Barney Inc. (the "Agents") on the other, to issue and sell
to [Morgan Stanley & Co. Incorporated] [Merrill Lynch, Pierce, Fenner
& Smith Incorporated] [Smith Barney Inc.] the securities specified in
the Schedule hereto (the "Purchased Securities"). Each of the
provisions of the Distribution Agreement not specifically related to
the solicitation by the Agents, as agents of the Company, of offers to
purchase Securities is incorporated herein by reference in its
entirety, and shall be deemed to be part of this Terms Agreement to
the same extent as if such provisions had been set forth in full
herein. Nothing contained herein or in the Distribution Agreement
shall make any party hereto an agent of the Company or make such party
subject to the provisions therein relating to the solicitation of
offers to purchase securities from the Company, solely by virtue of
its execution of this Terms Agreement. Each of the representations and
warranties set forth therein shall be deemed to have been made at and
as of the date of this Terms Agreement, except that each
representation and warranty in Section 1 of the Distribution Agreement
which makes reference to the Prospectus shall be deemed to be a
representation and warranty as of the date of the Distribution
Agreement in relation to the Prospectus (as therein defined), and also
a representation and warranty as of the date of this Terms Agreement
in relation to the Prospectus as amended and supplemented to relate to
the Purchased Securities.
An amendment to the Registration Statement, or a supplement
to the Prospectus, as the case may be, relating to the Purchased
Securities, in the form heretofore delivered to you is now proposed to
be filed with the Commission.
Subject to the terms and conditions set forth herein and in
the Distribution Agreement incorporated herein by reference, the
Company agrees to issue and sell to [Merrill Lynch, Pierce, Fenner &
Smith Incorporated] [Morgan Stanley & Co. Incorporated] [Smith Barney
Inc.] and [Merrill Lynch, Pierce, Fenner & Smith Incorporated] [Morgan
Stanley & Co. Incorporated] [Smith Barney Inc.] agree[s] to purchase
from the Company the Purchased Securities, at the time and place, in
the principal amount and at the purchase price set forth in the
Schedule hereto.
If the foregoing is in accordance with your understanding,
please sign and return to us three counterparts hereof, and upon
acceptance hereof by you this letter and such acceptance hereof,
including those provisions of the Distribution Agreement incorporated
herein by reference, shall constitute a binding agreement between you
and the Company.
THE WASHINGTON WATER POWER COMPANY
By:____________________________
Accepted in New York, New York,
as of the date hereof:
[MORGAN STANLEY & CO. INCORPORATED
By:________________________________
Title:]
[MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By:________________________________
Title:]
[SMITH BARNEY INC.
By:________________________________
Title:]
<PAGE>
Schedule to Annex I
Title of Purchased Securities:
- ------------------------------
Medium-Term Notes, Series C
Aggregate Principal Amount:
- ---------------------------
$
[Price to Public:]
Purchase Price by: [Morgan Stanley & Co. Incorporated] [Merrill Lynch,
Pierce, Fenner & Smith Incorporated] [Smith Barney Inc.]
% of the principal amount of the Purchased Securities [,
plus accrued interest from to ] [and accrued amortization, if any,
from to ]
Method of and Specified Funds for Payment of Purchase Price:
- ------------------------------------------------------------
[By certified or official bank check or checks, payable to
the order to the Company, in [New York Clearing House] [immediately
available] funds]
[By wire transfer to a bank account specified by the Company
in [next day] [immediately available] funds]
Time of Delivery:
- -----------------
Closing Location:
- -----------------
Maturity:
- ---------
Interest Rate:
- --------------
%
Interest Payment Dates:
- -----------------------
[months and dates]
Documents to Delivered:
- -----------------------
The following documents referred to in the Distribution
Agreement shall be delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agents
referred to in Section 4(h).]
[(2) The opinion of counsel to the Company referred to
in Section 4(i).]
[(3) The opinion of counsel to the Company referred to
in Section 4(j).]
[(4) The accountants' letter referred to in Section
4(k).]
[(5) The officers' certificate referred to in Section
4(1).]
Other provisions (including Syndicate Provisions, if applicable):
- -----------------------------------------------------------------
<PAGE>
ANNEX II
The Washington Water Power Company
Administrative Procedure
------------------------
This Administrative Procedure relates to the Securities
defined in the Distribution Agreement, dated _____ __, 1997 (the
"Distribution Agreement"), between The Washington Water Power Company
(the "Company") and Morgan Stanley & Co. Incorporated, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Smith Barney Inc. (the
"Agents"), to which this Administrative Procedure is attached as Annex
II. Defined terms used herein and not defined herein shall have the
meanings given such terms in the Distribution Agreement, the
Prospectus (as defined therein), as amended or supplemented, or the
Indenture referred to below.
The procedures to be followed with respect to the settlement
of sales of Securities directly by the Company to purchasers solicited
by an Agent, as agent, are set forth below. The terms and settlement
details related to a purchase of Securities by an Agent, as principal,
from the Company will be set forth in a Terms Agreement pursuant to
the Distribution Agreement, unless the Company and such Agent
otherwise agree as provided in Section 2(b) of the Distribution
Agreement, in which case the procedures to be followed in respect of
the settlement of such sale will be as set forth below. An Agent, in
relation to a purchase of a Security by a purchaser solicited by such
Agent, is referred to herein as the "Selling Agent" and, in relation
to a purchase of a Security by such Agent as principal other than
pursuant to a Terms Agreement, as the "Purchasing Agent."
The Securities will be issued under the Company's Indenture,
dated as of ____ _, 1997, to The Chase Manhattan Bank, as trustee (the
"Trustee") as it will be supplemented by an Officer's Certificate
dated _______ __, 1997 (such Indenture, as so supplemented and as it
may be amended and further supplemented, being hereinafter referred to
as the "Indenture"). The Chase Manhattan Bank ("Chase") will act as
paying agent for the payment of principal and of premium, if any, and
interest on the Securities, and will perform in various capacities
unless otherwise specified by the Company or agreed by the parties,
the other duties specified herein.
The Company will advise each Agent in writing of those
persons with whom such Agent is to communicate regarding offers to
purchase Securities and the related settlement details.
Each tranche of the Securities will be represented entirely
by either a Global Security (as defined below) delivered to Chase, as
agent for The Depository Trust Company ("DTC"), and recorded in the
book-entry system maintained by DTC (a "Book-Entry Security") or by a
certificate(s) issued as a registered Security or Securities delivered
to the holder(s) thereof or a person(s) designated by such holder(s)
(a "Certificated Security"). An owner of a Book-Entry Security will
not be entitled to receive a certificate representing such a Security
except under the limited circumstances described in the Prospectus. An
owner of a Certificated Security will not be entitled to become in
lieu thereof the owner of a Book-Entry Security.
Administrative procedures and specific terms of the offering
are explained below. Certificated Securities will be issued in
accordance with the administrative procedures set forth in Part I
hereof and Book-Entry Securities will be issued in accordance with the
administrative procedures set forth in Part II hereof. Administrative
responsibilities and record-keeping functions not performed by Chase
or DTC will be performed by the Company's Treasurer or its Assistant
Treasurer.
PART I: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
Posting Rates by Company:
- -------------------------
The Company and the Agents will discuss from time to time
the rates of interest per annum to be borne by and the maturity of
Certificated Securities that may be sold as a result of the
solicitation of offers by an Agent. The Company may establish interest
rates and maturities for an offering period ("posting") which shall,
at all times, be within the limitations set forth by the Company's
Board of Directors and in the orders of the Washington Utilities and
Transportation Commission ("WUTC"), the California Public Utilities
Commission ("CPUC"), the Idaho Public Utilities Commission ("IPUC")
and the Public Utility Commission of Oregon ("OPUC") applicable to the
issuance and sale of the Securities. If the Company decides to change
already posted rates, it will promptly advise the Agents to suspend
solicitation of offers until the new posted rates have been
established with the Agents.
Acceptance of Offers by Company:
- --------------------------------
Each Agent will promptly advise the Company by telephone or
other appropriate means of all reasonable offers to purchase
Certificated Securities, other than those rejected by such Agent. Each
Agent may, in its discretion reasonably exercised, reject any offer
received by it in whole or in part. Each Agent also may make offers to
the Company to purchase Certificated Securities as a Purchasing Agent.
The Company will have the sole right to accept offers to purchase
Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or
Purchasing Agent, as the case may be, of its acceptance or rejection
of an offer to purchase Certificated Securities. If the Company
accepts as offer to purchase Certificated Securities, it will confirm
such acceptance in writing to the Selling Agent or Purchasing Agent,
as the case may be, and Chase.
Communication of Sale Information to Company by Selling Agent:
- --------------------------------------------------------------
After the acceptance of an offer by the Company, the Selling
Agent or Purchasing Agent, as the case may be, will communicate the
following details of the terms of such offer (the "Sale Information")
to the Company by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means:
(1) Whether the Security is a Certificated Security or a
Book-Entry Security;
(2) Principal amount of Certificated Securities to be
purchased;
(3) Interest rate, interest payment dates, including
without limitation all necessary information with
respect to Floating Rate Notes, and initial interest
payment date;
(4) Stated Maturity Date;
(5) Issue Price;
(6) Selling Agent's commission or Purchasing Agent's
discount or commission, as the case may be;
(7) Net proceeds to the Company;
(8) Settlement Date (Original Issue Date);
(9) If a redeemable Certificated Security, such of the
following as are applicable:
(a) Initial Redemption Date;
(b) Initial Redemption Price (% of par);
(c) Amount (% of par) that the Redemption Price shall
decline (but not below par) ("Reduction
Percentage") and the dates on which such
Redemption Price shall decline after the Initial
Redemption Date; and
(d) Redemption Limitation Date.
(10) Name, address and taxpayer identification number of the
registered owner;
(11) Denomination of certificates to be delivered at
Settlement; and
(12) All other information necessary to complete the form of
Security prior to its authentication and delivery.
Preparation of Pricing Supplement by Company:
- ---------------------------------------------
If the Company accepts an offer to purchase a Certificated
Security, it will prepare a Pricing Supplement. The Company will
arrange to have ten Pricing Supplements filed with the Commission not
later than the close of business of the Commission on the third
Business Day following the date on which such Pricing Supplement is
first used and will supply at least ten copies of such Pricing
Supplement to the Selling Agent or Purchasing Agent, as the case may
be. In addition, the Company will file as required copies of the
Pricing Supplement with the applicable state regulatory authorities
concurrently with the filing of the Pricing Supplement with the
Commission.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
- ----------------------------------------------------------------------
The Selling Agent will deliver to the purchaser of a
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such
purchaser or its agent the prospectus as amended or supplemented
(including the Pricing Supplement) relating to such Certificated
Security prior to or together with the earlier of the delivery to such
purchaser or its agent of (a) the confirmation of sale or (b) the
Certificated Security.
Date of Settlement:
- -------------------
The receipt by the Company of immediately available funds in
payment for a Certificated Security shall constitute "Settlement" with
respect to such Certificated Security. All orders accepted by the
Company will be settled on a date (the "Settlement Date") which is the
third Business Day after the date of acceptance of such offer, unless
the Company and the purchaser agree to Settlement (a) on any other
Business Day after the acceptance of such offer or (b) with respect to
an offer accepted by the Company prior to 10:00 a.m., New York City
time, on the date of such acceptance, provided that such day shall be
a Business Day.
Instruction from Company to Trustee for Preparation of Certificated
- -------------------------------------------------------------------
Securities:
- -----------
After receiving the Sale Information from the Selling Agent
or Purchasing Agent, as the case may be, the Company will communicate
such Sale Information to the Trustee by Company Order by facsimile
transmission or other acceptable written means.
The Company will instruct the Trustee by Company Order by
facsimile transmission or other acceptable written means to
authenticate and deliver the Certificated Securities no later than
2:15 p.m., New York City time, on the Settlement Date. Such
instruction will be given by the Company prior to 3:00 p.m., New York
City time, on the Business Day prior to the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer
to purchase Certificated Securities in which case such instruction
will be given by the Company to the Trustee by 11:00 a.m., New York
City time.
Preparation and Delivery of Securities by Trustee and Receipt of
- ----------------------------------------------------------------
Payment Therefor:
- -----------------
The Trustee will prepare each Certificated Security and
appropriate receipts that will serve as the documentary control of the
transaction.
In the case of a sale of Certificated Securities to a
purchaser solicited by an Agent, the Trustee will, by 2:15 p.m., New
York City time, on the Settlement Date, deliver the Certificated
Securities to the Selling Agent, at the address listed below, for the
benefit of the purchaser of such Certificated Securities against
delivery by the Selling Agent of a receipt therefor. On the Settlement
Date the Selling Agent will deliver payment for such Certificated
Securities in immediately available funds to the Company's account at
a bank designated by the Company and notified by the Company to the
Selling Agent at least three days prior to the Settlement Date in an
amount equal to the issue price of the Certificated Securities less
the Selling Agent's commission. Any monies received by an Agent from a
purchaser of Securities in payment of the purchase price of such
Securities from the time the Trustee delivers the Securities to the
Selling Agent to the time the Agent delivers payment for such
Securities to the Company's account, as provided above, shall be held
by such Agent, as agent of the Company.
In the case of a sale of Certificated Securities to a
Purchasing Agent, the Trustee will, by 2:15 p.m., New York City time,
on the Settlement Date, deliver the Certificated Securities to the
Purchasing Agent against delivery by the Purchasing Agent of a receipt
therefor. On the Settlement Date, the Purchasing Agent will deliver
payment for such Certificated Securities in immediately available
funds, or otherwise pursuant to the Terms Agreement, to the account of
the Company as designated in the preceding paragraph in an amount
equal to the issue price of the Certificated Securities less the
Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
- ------------------------------------------
If a purchaser (other than a Purchasing Agent) fails to make
payment to the Selling Agent for a Certificated Security, the Selling
Agent will promptly notify the Trustee and the Company thereof by
telephone (promptly confirmed in writing) or by facsimile transmission
or by other acceptable written means. The Selling Agent will
immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee,
the Company will return to the Selling Agent the amount previously
paid to the Company in respect of such Certificated Security. The
Company will, in addition, reimburse the Selling Agent on an equitable
basis for its loss of the use of funds during the period when they
were credited to the account of the Company; provided, however, that
the Selling Agent shall be entitled to no reimbursement hereunder if
funds are returned on the day on which such funds had been previously
credited to the account of the Company such that the Selling Agent is
afforded a reasonable opportunity to invest such funds at an overnight
rate on such day; and provided further that if the Selling Agent is
denied the use of such funds due to its failure to return the relevant
Certificated Security to the Trustee in a timely manner it shall only
be entitled to reimbursement hereunder in an amount equal to the
amount that would have been earned on such funds had such funds been
on deposit at an overnight rate during the period between their credit
to the account of the Company and their reimbursement to the Agent.
The Trustee will cancel the Certificated Security in respect
of which the failure occurred, make appropriate entries in its records
and, unless otherwise instructed by the Company, dispose of the
Certificated Security.
Delivery of the Certificated Securities:
- ----------------------------------------
Unless otherwise notified by any Agent to the Trustee, the
Trustee shall deliver the Certificated Securities in accordance with
the procedures set forth above to any Agent (as the case may be) at
the following addresses:
PART II: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY SECURITIES
In connection with the qualification of the Book-Entry
Securities for eligibility in the book-entry system maintained by DTC,
Chase will perform the custodial, document control and administrative
functions described below, in accordance with its respective
obligations under a Letter of Representations from the Company and
Chase to DTC, dated the date hereof, and a Medium-Term Note
Certificate Agreement between Chase and DTC, dated as of December 2,
1988 ("Certificate Agreement"), and its obligations as a participant
in DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
Posting Rates by Company:
- -------------------------
The Company and the Agents will discuss from time to time
the rates of interest per annum to be borne by and the maturity of
Book-Entry Securities that may be sold as a result of the solicitation
of offers by an Agent. The Company may establish interest rates and
maturities for an offering period ("posting") which shall, at all
times, be within the limitations set forth in the orders of the WUTC,
CPUC, IPUC and OPUC applicable to the issuance and sale of the
Securities. If the Company decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by Company:
- --------------------------------
Each Agent will promptly advise the Company by telephone or
other appropriate means of all reasonable offers to purchase
Book-Entry Securities, other than those rejected by such Agent. Each
Agent may, in its discretion reasonably exercised, reject any offer
received by it in whole or in part. Each Agent also may make offers to
the Company to purchase Book-Entry Securities as a Purchasing Agent.
The Company will have the sole right to accept offers to purchase
Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or
Purchasing Agent, as the case may be, of its acceptance or rejection
of an offer to purchase Book-Entry Securities. If the Company accepts
an offer to purchase Book-Entry Securities, it will confirm such
acceptance in writing to the Selling Agent or Purchasing Agent, as the
case may be, and Chase.
Communication of Book-Entry Information to the Company by Selling
- -----------------------------------------------------------------
Agent and Settlement Procedures:
- --------------------------------
A. After the acceptance of an offer by the Company, the
Selling Agent or Purchasing Agent, as the case may be, will
communicate promptly, but in no event later than the time set forth
below under "Settlement Procedure Timetable", the following details of
the terms of such offer (the "Book-Entry Information") to the Company
by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means:
(1) Whether the Security is a Certificated Security or a
Book-Entry Security;
(2) Principal amount of Book-Entry Securities to be
purchased;
(3) Interest rate, interest payment dates, including
without limitation all necessary information with
respect to Floating Rate Notes, and initial interest
payment date;
(4) Stated Maturity Date;
(5) Issue Price;
(6) Selling Agent's commission or Purchasing Agent's
discount or commission, as the case may be;
(7) Net proceeds to the Company;
(8) Settlement Date (Original Issue Date);
(9) If a redeemable Book-Entry Security, such of the
following as are applicable:
(a) Initial Redemption Date;
(b) Initial Redemption Price (% of par);
(c) Amount (% of par) that the Redemption Price shall
decline (but not below par) ("Reduction
Percentage") and the dates on which such
Redemption Price shall decline after the Initial
Redemption Date; and
(d) Redemption Limitation Date.
(10) Exact name in which the Book-Entry Security is to be
registered, if other than Cede & Co.;
(11) Denomination of certificates to be delivered at
Settlement; and
(12) All other information necessary to complete the form of
Security prior to its authentication and delivery.
B. The Company will advise Chase by Company Order in writing
or by facsimile or electronic transmission of the information set
forth in Settlement Procedure "A" above, and the name of such Agent.
Chase will assign a CUSIP number to the Global Security representing
such Book-Entry Security and will notify the Company by telephone of
such CUSIP number as soon as practicable.
C. Chase will enter a pending deposit message through DTC's
Participant Terminal System, providing the following settlement
information to DTC's Underwriting Department, such Agent and Standard
& Poor's Corporation:
(1) The applicable Book-Entry Information set forth in
Settlement Procedure A;
(2) Identification numbers of the participant accounts
maintained by DTC on behalf of Chase or the Agent,
as the case may be;
(3) Identification as a Book-Entry Security;
(4) Initial Interest Payment Date for such Book-Entry
Security and amount of interest payable on such
Interest Payment Date;
(5) CUSIP number of the Global Security representing
such Book-Entry Security; and
(6) Whether such Global Security will represent any
other Book-Entry Security (to the extent known at
such time).
D. The Trustee will complete and authenticate the Global
Security representing such Security, the form of which was previously
approved by the Company, the Agents and the Trustee.
E. DTC will credit such Book-Entry Security to Chase's
participant account at DTC.
F. Chase will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC to (i) debit such
Book-Entry Security to Chase's participant account and credit such
Book-Entry Security to such Agent's participant account and (ii) debit
such Agent's settlement account and credit Chase's settlement account
for an amount equal to the price of such Book-Entry Security less such
Agent's commission. The entry of such a deliver order shall constitute
a representation and warranty by Chase to DTC that (a) the Global
Security representing such Book-Entry Security has been issued and
authenticated and (b) Chase is holding such Global Security pursuant
to the Certificate Agreement.
G. Such Agent will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC (i) to debit such
Book-Entry Security to such Agent's participant account and credit
such Book-Entry Security to the participant accounts of the
Participants with respect to such Book-Entry Security and (ii) to
debit the settlement accounts of such Participants and credit the
settlement account of such Agent for an amount equal to the price of
such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures F and G will be settled in
accordance with SDFS operating procedures in effect on the Settlement
Date.
I. Upon confirmation of receipt of funds, Chase will
transfer to a bank account designated by the Company, in immediately
available funds, the amount transferred to Chase in accordance with
Settlement Procedure F.
J. Upon request, Chase will send to the Company a statement
setting forth the principal amount of Book-Entry Securities
outstanding as of that date under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry
Security to the purchaser either by transmitting to the Participants
with respect to such Book-Entry Security a confirmation order or
orders through DTC's institutional delivery system or by mailing a
written confirmation to such purchaser.
DTC will, upon request of the Company or Chase, promptly
furnish to the Company or Chase a list of the names and addresses of
the participants for whom DTC has credited Book-Entry Securities.
Preparation of Pricing Supplement by Company:
- ---------------------------------------------
If the Company accepts an offer to purchase a Book-Entry
Security, it will prepare a Pricing Supplement. The Company will
arrange to have the Pricing Supplements filed with the Commission not
later than the close of business of the Commission on the third
Business Day following the date on which such Pricing Supplement is
first used or will arrange for such Pricing Supplement to be
transmitted to the Commission by a means reasonably calculated to
result in filing by such time and will supply at least ten copies of
such Pricing Supplement to the Selling Agent or Purchasing Agent, as
the case may be. In addition, the Company will file as required copies
of the Pricing Supplement with the applicable state regulatory
authorities concurrently with the filing of the Pricing Supplement
with the Commission.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
- ----------------------------------------------------------------------
The Selling Agent will deliver to the purchaser of a
Book-Entry Security a written confirmation of the sale and delivery
and payment instructions. In addition, the Selling Agent will deliver
to such purchaser or its agent the Prospectus as amended or
supplemented (including the Pricing Supplement) relating to such
Book-Entry Security prior to or together with the earlier of the
delivery to such purchaser or its agent of (a) the confirmation of
sale or (b) the Book-Entry Security.
Date of Settlement:
- -------------------
The receipt by the Company of immediately available funds in
payment for a Book-Entry Security shall constitute "Settlement" with
respect to such Book-Entry Security. All orders accepted by the
Company will be settled on a date (the "Settlement Date") which is the
third Business Day after the date of acceptance of such offer, unless
the Company and the purchaser agree to settlement on any other
Business Day after the acceptance of such offer in each case pursuant
to the Settlement Procedures Timetable set forth below.
Settlement Procedures Timetable:
- --------------------------------
For orders of Book-Entry Securities solicited by a Selling
Agent and accepted by the Company for Settlement on the first Business
Day after the sale date, Settlement Procedures A through J set forth
above shall be completed as soon as possible but not later than the
respective times (New York City time) set forth below:
Settlement
Procedure Time
--------- ----
A-B 11 AM on the sale date
C 2 PM on the sale date
D 9 AM on the Settlement Date
E 10 AM on the Settlement Date
F 2 PM on the Settlement Date
G 4:45 PM on the Settlement Date
H-J 5 PM on the Settlement Date
If a sale is to be settled more than one Business Day after
the sale date, (i) Settlement Procedure A shall be completed by 5 PM
on the Business Day following the sale date or 11 AM on the Business
Day prior to the Settlement Date, whichever is earlier, and (ii)
Settlement Procedures B and C shall be completed as soon as
practicable but no later than 2 PM on the Business Day prior to the
Settlement Date.
Settlement Procedure H is subject to extension in accordance
with any extension of Fedwire closing deadlines and in other events
specified in SDFS operating procedure in effect on the Settlement
Date.
If Settlement of a Book-Entry Security is rescheduled or
canceled, the Company will instruct Chase to deliver to DTC a PTS
cancellation message to such effect by no later than 12 Noon and on
the Business Day immediately preceding the scheduled Settlement Date
and Chase will enter such order by 2 PM on such Business Day through
DTC's Participation Terminal System.
The Company will, as soon as practicable after the trade
date for a Global Security (but no later than the dates and times, if
any, specified in the Indenture), cause to be delivered to the Trustee
an executed original of the Company Order for such Global Security as
well as all other documents required to be delivered under the
Indenture in connection with the issuance of such Global Security,
unless already delivered.
Failure to Settle
- -----------------
If Chase has not entered an SDFS deliver order with respect
to a Book-Entry Security pursuant to Settlement Procedure F, the
Company may instruct Chase to deliver to DTC, through DTC's
Participant Terminal System, as soon as practicable, a withdrawal
message instructing DTC to debit such Book-Entry Security to Chase's
participant account. DTC will process the withdrawal message, provided
that Chase's participant account contains a principal amount of the
Global Security representing such Book-Entry Security that is at least
equal to the principal amount to be debited. If a withdrawal message
is processed with respect to all the Book-Entry Securities represented
by a Global Security, Chase will mark such Global Security "canceled",
make appropriate entries in Chase's records and send such canceled
Global Security to the Company. The CUSIP number assigned to such
Global Note shall, in accordance with CUSIP Service Bureau procedures,
be canceled and not immediately reassigned. If a withdrawal message is
processed with respect to less than the entire principal amount of the
Book-Entry Securities represented by a Global Security, Chase will
exchange such Global Security for two Global Securities, one of which
shall represent the Book-Entry Security or Securities for which a
withdrawal message has been processed and shall be canceled
immediately after issuance and the other of which shall represent the
Book-Entry Security previously represented by the surrendered Global
Security with respect to which a withdrawal message has not been
processed and shall bear the CUSIP number of the surrendered Global
Security.
If the purchase price for any Book-Entry Security is not
timely paid to the Participants with respect to such Book-Entry
Security by the beneficial purchaser thereof (or a person, including
an indirect participant in DTC, acting on behalf of such purchaser),
such Participants and, in turn, the Agent for such Book-Entry Security
may enter SDFS deliver orders through DTC's Participant Terminal
System debiting such Book-Entry Security to such Participant's account
and crediting such Book-Entry Security to such Agent's participant
account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to Chase's
participant account, and shall notify the Company and Chase thereof.
Thereafter, Chase will (i) immediately notify the Company of such
order, once Chase has confirmed that such Book-Entry Security has been
credited to its participant account, and the Company shall transfer to
such Agent funds available for immediate use in an amount equal to the
price of such Book-Entry Security which was previously credited to the
account of the Company in accordance with Settlement Procedure I, and
(ii) deliver the withdrawal message and take the related actions
described in the preceding paragraph. If such failure shall have
occurred for any reason other than default by the Agent in the
performance of its obligations hereunder or under the Distribution
Agreement, the Company will reimburse the Agent on an equitable basis
for its loss of the use of funds during the period when they were
credited to the account of the Company; provided, however, that the
Selling Agent shall be entitled to no reimbursement hereunder if funds
are returned on the day on which such funds had been previously
credited to the account of the Company such that the Selling Agent is
afforded a reasonable opportunity to invest such funds at an overnight
rate on such day; and provided further that if the Selling Agent is
denied the use of such funds due to its failure to return the relevant
Security to the Trustee in a timely manner it shall only be entitled
to reimbursement hereunder in an amount equal to the amount that would
have been earned on such funds had such funds been on deposit at an
overnight rate during the period between their credit to the account
of the Company and their reimbursement to the Agent.
Notwithstanding the foregoing, upon any failure to settle
with respect to a Book-Entry Security, DTC may take any actions in
accordance with its SDFS operating procedures then in effect. In the
event of a failure to settle with respect to one or more, but not all,
of the Book-Entry Securities to have been represented by a Global
Security, the Trustee will provide, in accordance with Settlement
Procedure D for the authentication and issuance of a Global Security
representing the other Book-Entry Securities to have been represented
by such Global Security and will make appropriate entries in its
records.
<PAGE>
ANNEX III
[FORM OF OPINION OF PAINE, HAMBLEN, COFFIN, BROOKE & MILLER]
-------- --, ----
Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Smith Barney Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
This opinion is being delivered to you pursuant to Section
___ of the Distribution Agreement, dated ______ __, 199_ (the
"Distribution Agreement"), between you as Agents and The Washington
Water Power Company, a Washington corporation (the "Company"),
relating to the issuance and sale from time to time by the Company of
up to $250,000,000 in aggregate principal amount of its Medium-Term
Notes, Series C (the "Notes"), to be issued under an Indenture, dated
as of _______ __, 199_, by and between the Company and The Chase
Manhattan Bank, as trustee (the "Trustee").
Capitalized terms used herein but not otherwise defined
herein shall have the meaning ascribed to them in the Distribution
Agreement. The Indenture (including the Officer's Certificate
establishing the terms of the Notes) and the Notes are sometimes
collectively referred to herein as the "Company Documents."
In connection with rendering this opinion, we have examined,
or are generally familiar with, the following: (a) the Restated
Articles of Incorporation, as amended, and the Bylaws, as amended, of
the Company; (b) the Distribution Agreement; (c) the Company
Documents; (d) a Certificate of Existence/Authorization issued by the
Secretary of State of Washington, a Certificate of Corporate Status
issued by the Secretary of State of Idaho, a Certificate of
Authorization issued by the Secretary of State of Montana, a
Certificate of Authorization issued by the Secretary of State of
Oregon, and a Certificate of Status of Foreign Corporation issued by
the Secretary of State of California, (e) the orders of the Washington
Utilities and Transportation Commission ("WUTC"), the California
Public Utilities Commission (the "CPUC"), the Idaho Public Utilities
Commission (the "IPUC") and the Public Utility Commission of Oregon
(the "OPUC"); (f) the registration statement (File No. 333-_____) (the
"Registration Statement") filed by the Company with the Securities and
Exchange Commission (the "SEC") for the registration under the
Securities Act of 1933, as amended (the "Act"), of $250,000,000 in
aggregate amount of the Company's debt securities and for
qualification under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), of the Indenture, which Registration
Statement, we are advised, became effective on _______ _, 199_; (g)
the final prospectus relating to the Notes and the prospectus
supplement dated ______ __, 199_, relating to such securities and
filed with the SEC pursuant to Rule 424 under the Act; and (h) the
documents incorporated by reference in the Registration Statement and
the Prospectus, consisting of the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996 (the "10-K"), the Company's
Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
1997, June 30, 1997 and September 30, 1997 (the "10-Q's"), and the
Company's Current Report on Form 8-K dated June 25, 1997 (the "8-K"),
in each case, together with all exhibits thereto (the "Incorporated
Documents"). We have also examined such other documents and satisfied
ourselves as to such other matters as we have deemed necessary in order
to render this opinion. We have not examined the certificates evidencing
the Notes, except a specimen thereof.
As to various questions of fact (but not as to the legal
conclusions contained therein) material to the opinions set forth
below, in rendering such opinions we have relied, with your
permission, upon certificates of public officials, certificates of
officers or other employees of the Company, representations contained
in the Distribution Agreement, the Company Documents and related
documents, and other oral or written assurances by officers or other
employees of the Company.
We are general counsel to the Company; general counsel to
the following subsidiaries: Avista Corp., Avista Laboratories, Inc.,
Avista Advantage, Inc., WP International, Inc., Washington Irrigation
and Development Company, and WP Finance Co.; and counsel to the
following subsidiary: Avista Energy, Inc. In such capacity, we
represent the Company and such subsidiaries to which we are general
counsel on various matters referred to us by them, but not on all
matters; and we represent Avista Energy, Inc. on certain specific
matters referred to us by it (primarily with respect to energy
purchase and sale transactions), but not on all matters and Avista
Energy, Inc. has substantial engagements with other counsel to
represent it on numerous matters. We do not serve as counsel to other
direct or indirect subsidiaries and affiliates of the Company and, as
to various questions relating to the activities of such subsidiaries
and affiliates, we further have relied upon certificates of officers
thereof.
We have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as
copies, and the due authorization, execution and delivery of all
documents by all parties thereto other than the Company.
We further assumed (a) that the interest rate, agent fee
and/or effective interest cost of each Note, when issued, will be within
the limitations with respect thereto imposed by the OPUC and by the
Company's Board of Directors, (b) that no floating rate Notes will be
issued until the Company's Board of Directors shall have authorized the
same, and (c) that Notes will be issued only during the period of
authorization specified by the OPUC.
As used in this opinion, the expression "to the best of our
knowledge" with reference to matters of fact means that, after an
examination of the documents made available to us by the Company and
after inquiries of officers or employees of the Company, we find no
reason to believe that the opinions expressed herein are factually
inaccurate; but beyond that, we have not made an independent factual
investigation for the purpose of rendering this opinion.
Based upon the foregoing, and subject to the qualifications
set forth herein, we are of the opinion that:
(1) (a) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State
of Washington, is duly qualified to do business and in good
standing as a foreign corporation under the laws of the States of
California, Idaho, Montana and Oregon, and has adequate corporate
powers and has all material required approvals and authorizations
to own, lease and operate its properties and to transact an
electric and/or gas public utility business in such States as
described in the Registration Statement, the Prospectus and the
Incorporated Documents. The Company has adequate corporate powers
to execute and deliver, and perform its obligations under, the
Distribution Agreement and the Company Documents.
(b) Each of the Company's following subsidiaries, Avista
Corp., Pentzer Corporation, Avista Energy, Inc., Avista
Advantage, Inc., and Washington Irrigation & Development Company,
is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Washington.
(2) The WUTC, CPUC, IPUC and OPUC have entered appropriate
orders authorizing the issuance and sale by the Company of the
Notes on the terms set forth or contemplated in such orders (the
"Commission Orders"); each of the Commission Orders, to the best
of our knowledge, remains in full force and effect on the date of
this opinion; and no further approval, authorization, consent or
other order of, or filing with, any governmental agency of the
States of Washington, California, Idaho, Montana and Oregon is
legally required for the authorization of the issuance and sale
by the Company of the Notes or in order for the Company Documents
to constitute valid and binding obligations of the Company.
(3) The Distribution Agreement and the Company Documents
(other than the Notes) have been duly authorized, executed and
delivered by the Company, and the Notes have been duly authorized
by the Company.
(4) The execution, delivery and performance by the Company
of its obligations under the Distribution Agreement and the
Company Documents, and the issuance and sale by the Company of
the Notes will not (A) breach or violate the Company's Restated
Articles of Incorporation, as amended, or Bylaws, as amended, or
(B) breach or violate, or constitute a default under, (i) any
order of any court or governmental agency of such States having
jurisdiction over the Company or any of its properties which is
material to the Company or (ii) any contract, indenture, mortgage,
agreement or other instrument for borrowed money to which the
Company is a party or to which any of its properties is subject
and which is listed as an Exhibit to the 10-K, except that we
express no opinion as to any such contract, indenture, mortgage,
agreement or other instrument which is addressed in the separate
opinion to you of Reid & Priest LLP.
(5) Except as described in the Registration Statement, the
Prospectus or the Incorporated Documents, to the best of our
knowledge, there are no legal or governmental proceedings, either
pending or overtly threatened in writing, which arise out of the
operations of the Company in the States of Washington,
California, Idaho, Montana or Oregon to which the Company is a
party or to which the Company or any of its properties are
subject and which are material to the Company, other than
ordinary, routine legal or governmental proceedings incidental to
the kind of business conducted by the Company.
(6) The descriptions of legal or governmental proceedings
contained in Item 1 (Note 3) of the 10-Q's and in Item 14 (Note
14) of the 10-K are fair and accurate descriptions thereof in all
material respects.
As noted above, we are general counsel to the Company and
certain of its subsidiaries and we represent them on various, but not
all, matters, and we are counsel to its subsidiary Avista Energy, Inc.
and we represent it on certain specific matters, but not all, matters.
Our involvement in the preparation of the Registration Statement, the
Prospectus and the Incorporated Documents was limited to generally
reviewing drafts thereof prepared by the Company or other counsel to
the Company and to participating in the conferences referred to below.
However, we have not been engaged to make the ultimate determination
of materiality for purposes of, or to determine the wording and degree
of disclosure contained in, the Registration Statement, the Prospectus
or the Incorporated Documents; we have not been engaged to advise the
Company with respect to compliance with securities laws; and we have
not otherwise acted as securities law counsel to the Company.
Accordingly, in such capacity during the course of the
preparation by the Company of the Registration Statement, the
Prospectus and the Incorporated Documents, we have participated in
conferences with certain officers and other employees of the Company,
with other counsel for the Company, with you and your counsel, and
with Deloitte & Touche LLP, the independent certified public
accountants who examined the financial statements included in the
Registration Statement, the Prospectus and the Incorporated Documents,
but we have made no independent verification of the accuracy or
completeness of the representations and statements made to us by the
Company or the information included by the Company in the Registration
Statement, the Prospectus or the Incorporated Documents, and we take
no responsibility therefor, except as set forth in paragraph (6) above
and insofar as such information relates to us.
The nature and extent of our engagement by the Company and our
participation in the above-mentioned conferences, as described above,
would not necessarily be adequate to bring to our attention all
matters which could be deemed material or to enable us to make a valid
assessment of the materiality of such matters as were brought to our
attention or of the wording and degree of disclosure contained in the
Registration Statement, the Prospectus or the Incorporated Documents.
However, during the course of our examination of the Registration
Statement, the Prospectus and the Incorporated Documents and our
participation in the above-mentioned conferences, nothing came to our
attention which gives us reason to believe that, when the Registration
Statement became effective, the Registration Statement, the Prospectus
and the Incorporated Documents contained an untrue statement of a
material fact or omitted to state a material fact necessary to make
the statements therein not misleading, or that, as of the date of this
opinion, the Prospectus, as then amended or supplemented, and the
Incorporated Documents contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that we do not express
any belief as to any financial statements or other financial or
statistical information, data or computations contained in the
Registration Statement, the Prospectus or the Incorporated Documents,
as to any statements contained in the Statements of Eligibility (Form
T-1) under the Trust Indenture Act with respect to the Trustee, or as
to any portions of the Registration Statement or the Prospectus other
than the sections entitled "The Washington Water Power Company" and
"Use of Proceeds" and Part II of the Registration Statement.
The opinions expressed above are limited to the laws of the
States of Washington, California, Idaho, Montana and Oregon (excluding
therefrom principles of conflicts of laws, state securities or blue
sky laws, and laws of political subdivisions of such States). For
purposes of the opinion expressed in paragraph (4) above, we have
assumed that any document referred to therein which is not stated to
be governed by the laws of the States of Washington, California,
Idaho, Montana and Oregon would be enforced as written.
This opinion is limited to the opinions and confirmations
expressed above, and no additional opinions or confirmations are to be
implied or inferred. Without limiting the generality of the foregoing,
it is specifically understood that we express no opinion or
confirmation as to (i) whether the Distribution Agreement, the Company
Documents or related documents constitute legal, valid and binding
obligations, enforceable in accordance with their terms, or (ii) the
description of the Notes or related documents contained in the
Registration Statement and Prospectus.
This opinion is being delivered as of this date solely in
connection with the issuance and sale of the Notes for the benefit of
the addressees hereof. The Chase Manhattan Bank, as Trustee under the
Indenture, is hereby also authorized to rely upon this opinion in
connection therewith as if it were addressed to it. Sullivan &
Cromwell is hereby also authorized to rely upon this opinion with
respect to paragraphs (1), (2) and (3) above in connection therewith
as if it were addressed to them. This opinion is not being delivered,
nor may it be relied upon, for any other purpose; this opinion is not
being delivered for the benefit of, nor may it be relied upon by, the
holders of the Notes or any other party to which it is not
specifically addressed or to which reliance is not expressly permitted
hereby; and this opinion is not to be used, delivered, circulated,
quoted or otherwise referred to except as expressly permitted hereby.
This opinion is given as of the date hereof, without any
obligation upon us to update this opinion or to advise the addressees
hereof or any other party of any changes in circumstances or laws that
may hereafter be brought to our attention or occur which may affect
this opinion.
Very truly yours,
PAINE, HAMBLEN, COFFIN,
BROOKE & MILLER LLP
<PAGE>
ANNEX IV
[FORM OF OPINION OF REID & PRIEST LLP]
-------- --, ----
Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Smith Barney Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
This opinion is being delivered to you pursuant to Section ___
of the Distribution Agreement, dated ______ __, 199_ (the
"Distribution Agreement"), between you as Agents and The Washington
Water Power Company, a Washington corporation (the "Company"),
relating to the issuance and sale from time to time by the Company of
up to $250,000,000 in aggregate principal amount of its Medium-Term
Notes, Series C (the "Notes"), to be issued under an Indenture, dated
as of _______ __, 199_, by and between the Company and The Chase
Manhattan Bank, as trustee (the "Trustee").
Capitalized terms used herein but not otherwise defined herein
shall have the meaning ascribed to them in the Distribution Agreement.
The Indenture (including the Officer's Certificate establishing the
terms of the Notes) and the Notes are sometimes collectively referred
to herein as the "Company Documents."
In connection with rendering this opinion, we have examined,
or are generally familiar with, the following: (a) the Restated
Articles of Incorporation, as amended, and the Bylaws, as amended, of
the Company; (b) the Distribution Agreement; (c) the Company
Documents; (d) the Registration Statement for the registration under
the Securities Act of 1933, as amended (the "Act"), of $250,000,000 in
aggregate amount of the Company's debt securities and for
qualification under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), of the Indenture, which registration statement
became effective on _______ _, 199_; (e) the Prospectus filed with the
SEC pursuant to Rule 424 under the Act; and (f) the documents
incorporated by reference into the Registration Statement. We have
also examined such other documents and satisfied ourselves as to such
other matters as we have deemed necessary in order to render this
opinion. We have not examined the certificates evidencing the Notes,
except a specimen thereof.
As to various questions of fact (but not as to the legal
conclusions contained therein) material to the opinions set forth
below, in rendering such opinions we have relied, with your
permission, upon certificates of public officials, certificates of
officers or other employees of the Company, representations of the
Company in the Distribution Agreement, and other oral or written
assurances by officers or other employees of the Company. We do not
serve as counsel to direct or indirect subsidiaries or affiliates of
the Company, and, as to various questions relating to the activities
of such subsidiaries and affiliates, we have further relied upon
certificates of officers thereof.
We have assumed, consistent with the opinion of even date
herewith rendered to you by Paine, Hamblen, Coffin, Brooke & Miller
LLP, that the Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Washington and is duly qualified to do business and in good standing
as a foreign corporation under the laws of the States of California,
Idaho, Montana and Oregon, and has adequate corporate powers to
execute and deliver the Distribution Agreement and the Company
Documents; that the Distribution Agreement and the Company Documents
(other than the Notes) have been duly authorized, executed and
delivered by the Company, and the Notes have been duly authorized by
the Company; and that all approvals, authorizations, consents, other
orders or filings required under the laws of the States of Washington,
California, Idaho, Montana and Oregon in order for the Company
Documents to constitute valid and binding obligations of the Company
have been obtained. We have not been engaged by the Company with
respect to the matters so assumed; however, during the course of such
examinations as we have made for the purposes of the opinions
enumerated below, nothing came to our attention which leads us to
believe that such assumptions are not correct.
We have further assumed (a) that the interest rate, agent
fee and/or effective interest cost of each Note, when issued, will
be within the limitations with respect thereto imposed by the OPUC
and by the Company's Board of Directors, (b) that no floating rate
Notes will be issued until the Company's Board of Directors shall
have authorized the same, and (c) that Notes will be issued only
during the period of authorization specified by the OPUC.
Based upon the foregoing, and subject to the qualifications
set forth herein, we are of the opinion that:
(1) the Indenture has been duly qualified under the Trust
Indenture Act and constitutes a valid and legally binding
instrument, enforceable against the Company in accordance with
its terms, except to the extent the enforcement of the Indenture
may be limited by any applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other laws
affecting creditors' rights generally, by general principles of
equity (whether asserted in an action in equity or at law) and by
rules of law governing specific performance, injunctive relief,
foreclosure, receivership and other equitable remedies; and the
Indenture conforms in all material respects to the description
thereof contained in the Prospectus;
(2) the Notes, when duly authenticated and delivered by the
Trustee in accordance with the Indenture and issued, delivered
and paid for in accordance with the Distribution Agreement, will
be duly executed, authenticated, issued and delivered and
constitute valid and legally binding obligations of the Company,
in the form contemplated by and entitled to the benefits provided
by the Indenture, and enforceable in accordance with their terms,
except to the extent the enforcement of the Notes may be limited
by any applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws affecting creditors'
rights generally, by general principles of equity (whether
asserted in an action in equity or at law) and by rules of law
governing specific performance, injunctive relief, foreclosure,
receivership and other equitable remedies; and the Notes conform
in all material respects to the description thereof contained in
the Prospectus;
(3) the execution, delivery and performance by the Company
of its obligations under the Distribution Agreement and the
Company Documents and the consummation of the transactions
contemplated therein and compliance by the Company with its
obligations thereunder will not (A) conflict with the Company's
Restated Articles of Incorporation, as amended, or Bylaws, as
amended, or (B) result in the breach or violation of any terms or
provisions of, or constitute a default under, (i) the Company's
Mortgage and Deed of Trust dated as of June 1, 1939, to Citibank,
N.A., as trustee, (ii) the Indenture, dated as of July 1, 1988,
of the Company to Chemical Bank, (iii) the Lease Agreement, dated
as of December 15, 1986, between the Company and IRE-4 of New
York, Inc. and all agreements of the Company associated
therewith, (iv) the Loan Agreement, dated as of October 1, 1989,
between the Company and the City of Forsyth, Rosebud County,
Montana, and all agreements of the Company associated therewith,
(v) the Indenture, dated as of January 1, 1997, of the Company to
Wilmington Trust Company, (vi) the Agreement for Lease and the
Lease Agreement, each dated as of February 26, 1993, between the
Company and WP Funding, Limited Partnership, and all agreements
of the Company associated therewith, (vii) the Amended and
Restated Declaration of Trust of Washington Water Power Capital
I, dated as of January 23, 1997, or (viii) the Amended and
Restated Declaration of Trust of Washington Water Power Capital
II, dated as of June 3, 1997;
(4) no approval, authorization, consent or other order of,
or filing with, any governmental agency of the State of New York
or of the United States of America is required under the
respective laws of such jurisdictions in order for the Company
Documents to constitute valid and binding obligations of the
Company;
(5) the Company is not and, after giving effect to the
offering and sale of the Notes, will not be, an "investment
company" or an entity "controlled" by an "investment company," as
such terms are defined in the Investment Company Act of 1940, as
amended; and
(6) the Registration Statement and Prospectus (except the
financial statements and other financial and statistical data
contained therein and any information furnished to the Company by
the Agents expressly for use therein, upon which we do not pass)
comply as to form in all material respects with the applicable
requirements of the Act and the Trust Indenture Act and the
applicable instructions, rules and regulations promulgated
thereunder; the Registration Statement has become effective under
the Act and, to the best of our knowledge, no proceedings for a
stop order with respect thereto are pending or threatened under
Section 8(d) of the Act.
We have acted as counsel to the Company primarily with
respect to general compliance with the federal securities laws and
specific financing and other corporate transactions. Our engagement
regarding such compliance was limited to advising the Company as to
the requirements of such laws and the rules and regulations of the SEC
thereunder, assisting the Company in the assessment of the materiality
of particular matters brought to our attention and generally
reviewing, with a view toward such compliance, drafts prepared by the
Company of the documents incorporated by reference into the
Registration Statement and the Prospectus. We have not acted as
general counsel to the Company and have not, except for specific
purposes, attended meetings of the Board of Directors of the Company,
or committees thereof, or of officers of the Company; nor have we
otherwise been in a position to become aware of matters not
specifically brought to our attention by officers or other employees
of, or other counsel to, the Company.
Accordingly, in the course of the preparation by the Company
of the Registration Statement and the Prospectus, we participated in
conferences with certain officers and other employees of the Company,
with other counsel for the Company, with you and your counsel, and
with Deloitte & Touche LLP, the independent certified public
accountants who examined the financial statements included in the
Registration Statement and the Prospectus, but we made no independent
verification of the accuracy or completeness of the representations
and statements made to us by the Company or the information included
by the Company in the Registration Statement or the Prospectus, and we
take no responsibility therefor, except insofar as such information
relates to us and as set forth in paragraphs (1) and (2) above.
The nature and extent of our engagement by the Company and
our participation in the preparation of the Registration Statement and
the Prospectus, as described above, would not necessarily be adequate
to bring to our attention all matters which could be deemed material
or to enable us to make a valid assessment of the materiality of such
matters as were brought to our attention.
However, during the course of our examination of the
Registration Statement and the Prospectus, and our participation in
the above-mentioned conferences, nothing came to our attention which
gives us reason to believe that (A) when the Registration Statement
became effective, the Registration Statement contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that, as of the date of this opinion, the
Prospectus, as then amended or supplemented, contains an untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that we do not express any belief as to any financial
statements or other financial or statistical information, data or
computations contained in the Registration Statement or the Prospectus
or as to any statements contained in the Statements of Eligibility
(Form T-1) under the Trust Indenture Act with respect to the Trustee;
or (B) there exist any material contracts which are required to be
filed as exhibits to the Registration Statement which have not been so
filed.
The opinions enumerated above are limited to the laws of the
State of New York and the federal law of the United States of America
(excluding therefrom principles of conflicts of laws and state
securities or blue sky laws). To the extent that such opinions relate
to or are dependent upon matters governed by the laws of other States,
they are based upon the assumptions set forth above or otherwise upon
the legal conclusions set forth in the aforesaid opinions of Paine,
Hamblen, Coffin, Brooke & Miller LLP. For purposes of the opinion
expressed in Paragraph 3 above, we have assumed that any document
referred to therein which is not stated to be governed by the law of
the State of New York would be enforced as written.
The Chase Manhattan Bank, as trustee under the Indenture, is
hereby authorized to rely upon this opinion as if it were addressed to
it. This opinion is not being delivered for the benefit of, nor may it
be relied upon by, the holders of the Notes or any other party to
which it is not specifically addressed or to which reliance is not
expressly permitted hereby.
Very truly yours,
REID & PRIEST LLP
<PAGE>
ANNEX V
[Contents of Letter of Deloitte & Touche LLP]
The letter of Deloitte & Touche LLP will state in effect
that:
(1) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the Rules and Regulations.
(2) In their opinion, the financial statements audited by
them and incorporated by reference in the Prospectus comply as to form
in all material respects with the applicable accounting requirements
of the Act, the Exchange Act and the Rules and Regulations.
(3) They performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial
Information, on any unaudited condensed consolidated financial
statements included in the Company's Quarterly Reports on Form 10-Q
and incorporated by reference in the Prospectus.
(4) On the basis of procedures referred to in such letter,
including a reading of the latest available minutes of the Board of
Directors of the Company and a reading of the latest available interim
financial statements of the Company and inquiries of officials of the
Company responsible for financial and accounting matters, nothing
caused them to believe that:
(a) the unaudited income statement and balance sheet
amounts, if any, included in the Prospectus were not determined
on a basis substantially consistent with that of the
corresponding amounts in the audited financial statements
incorporated by reference in the Prospectus;
(b) the unaudited condensed consolidated financial
statements included in the Company's Quarterly Reports on Form
10-Q, if any, incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the related
published rules and regulations thereunder applicable to reports
on Form 10-Q or are not in conformity with generally accepted
accounting principles on a basis substantially consistent with
that of the audited financial statements incorporated by
reference in the Prospectus;
(c) at the date of the latest available internal balance
sheet of the Company, there was any change in the capital stock,
notes payable or long-term debt or any decrease in the net assets
or shareholders' equity of the Company, or, at a subsequent
specified date not more than five days prior to the date of such
letter, there was a change in the capital stock, notes payable or
long-term debt of the Company, in each case as compared with the
amounts shown in the most recent balance sheet of the Company
incorporated by reference in the Prospectus, except for 1.
increases in capital stock resulting from the issuance of shares
pursuant to employee benefit plans and the Company's Dividend
Reinvestment and Stock Purchase Plan, 2. decrease in long- term
debt resulting from amortization of debt premium or increases in
long-term debt premium or increases in long-term debt resulting
from draw-downs of funds held in trust, 3. decreases in net
assets resulting from the declaration of dividends, 4. changes or
decreases which the Prospectus discloses have occurred or may
occur and 5. such other changes or decreases as may be set forth
in such letter; or
(d) at the date of the latest available internal balance
sheet of the Company, there was any decrease, as compared with
the most recent twelve-month period for which operating revenues
and net income are included or incorporated by reference in the
Prospectus, in such amounts, except in all cases for changes or
decreases which the Prospectus discloses have occurred or may
occur or as may be set forth in set letter.
(5) In addition to their examination referred to in their
report in the Registration Statement and Prospectus and the procedures
referred to in (3) above, they have carried out certain other
specified procedures, not constituting an audit, with respect to the
dollar amounts, percentages and other financial information, (in each
case to the extent that such dollar amounts, percentages and other
financial information, either directly or by analysis or computation,
are derived from the general accounting records of the Company) which
appear in the Company's annual report on Form 10-K for its most recent
fiscal year in Item 1, "Business", Item 6, "Selected Financial Data"
and Item 7 "Managements's Discussion and Analysis of Financial
Condition and Results of Operations" and have found such dollar
amounts, percentages and financial information to be in agreement with
the accounting records of the Company.
---------------------------------------------
THE WASHINGTON WATER POWER COMPANY
TO
THE CHASE MANHATTAN BANK,
TRUSTEE
---------------
INDENTURE
DATED AS OF 1, 1997
---------
---------------
---------------------------------------------
<PAGE>
THE WASHINGTON WATER POWER COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
INDENTURE, DATED AS OF , 1997
----------- --
TRUST INDENTURE ACT SECTION INDENTURE SECTION(S)
--------------------------- --------------------
<section>310(a)(1) . . . . . . . . . . . . . . . 809
(a)(2) . . . . . . . . . . . . . . . . . . . 809
(a)(3) . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . 808, 810
<section>311(a) . . . . . . . . . . . . . . . . . 813
(b) . . . . . . . . . . . . . . . . . . . 813
(c) . . . . . . . . . . . . . . . . . . . 813
<section>312(a) . . . . . . . . . . . . . . . . . 901
(b) . . . . . . . . . . . . . . . . . . . 901
(c) . . . . . . . . . . . . . . . . . . . 901
<section>313(a) . . . . . . . . . . . . . . . . . 902
(b) . . . . . . . . . . . . . . . . . . . 902
(c) . . . . . . . . . . . . . . . . . . . 902
(d) . . . . . . . . . . . . . . . . . . . 902
<section>314(a) . . . . . . . . . . . . . . . . . 902, 507
(b) . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . 102
<section>315(a) . . . . . . . . . . . . . . . . . 801, 803
(b) . . . . . . . . . . . . . . . . . . . 802
(c) . . . . . . . . . . . . . . . . . . . 801
(d) . . . . . . . . . . . . . . . . . . . 801
(e) . . . . . . . . . . . . . . . . . . . 714
<section>316(a) . . . . . . . . . . . . . . . . . 712, 713
(a)(1)(A) . . . . . . . . . . . . . . . . . . . 702, 712
(a)(1)(B) . . . . . . . . . . . . . . . . . . . 713
(a)(2) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . 708
(c) . . . . . . . . . . . . . . . . . . . 104
<section>317(a)(1) . . . . . . . . . . . . . . . 703
(a)(2) . . . . . . . . . . . . . . . . . . . 705
(b) . . . . . . . . . . . . . . . . . . . 503
<section>318(a) . . . . . . . . . . . . . . . . . 107
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
----
Recital of the Company . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101.General Definitions . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . 2
Authorized Officer . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . 3
Company Order or Company Request . . . . . . 3
Corporate Trust Office . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . 3
Discount Security . . . . . . . . . . . . . . 3
Interest . . . . . . . . . . . . . . . . . 3
Dollar or $ . . . . . . . . . . . . . . . . . 3
Eligible Obligations . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . 4
Fair Value . . . . . . . . . . . . . . . . . 4
Governmental Authority . . . . . . . . . . . 4
Government Obligations . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . 4
Independent Expert's Certificate . . . . . . 4
Interest Payment Date . . . . . . . . . . . . 5
Maturity . . . . . . . . . . . . . . . . . . 5
Notice of Default . . . . . . . . . . . . . . 5
Officer's Certificate . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . 5
Outstanding . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . 6
Periodic Offering . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . 6
Place of Payment . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . 7
Redemption Date . . . . . . . . . . . . . . . 7
Redemption Price . . . . . . . . . . . . . . 7
Regular Record Date . . . . . . . . . . . . . 7
Required Currency . . . . . . . . . . . . . . 7
Responsible Officer . . . . . . . . . . . . . 7
Securities . . . . . . . . . . . . . . . . . 7
Security Register . . . . . . . . . . . . . . 7
Security Registrar . . . . . . . . . . . . . 7
Special Record Date . . . . . . . . . . . . . 7
Stated Interest Rate . . . . . . . . . . . . 7
Stated Maturity . . . . . . . . . . . . . . . 7
Successor . . . . . . . . . . . . . . . . . . 8
Tranche . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act . . . . . . . . . . . . . 8
Trustee . . . . . . . . . . . . . . . . . . . 8
United States . . . . . . . . . . . . . . . . 8
Unpaid Interest . . . . . . . . . . . . . . . 8
SECTION 102. Compliance Certificates and
Opinions . . . . . . . . . . . . 8
SECTION 103. Content and Form of Documents
Delivered to Trustee . . . . . . 9
SECTION 104. Acts of Holders . . . . . . . . . 10
SECTION 105. Notices, Etc. to Trustee and
Company . . . . . . . . . . . . . 12
SECTION 106. Notice to Holders of Securities;
Waiver . . . . . . . . . . . . . 12
SECTION 107. Conflict with Trust Indenture Act 13
SECTION 108. Effect of Headings and Table of
Contents . . . . . . . . . . . . 13
SECTION 109. Successors and Assigns . . . . . . 13
SECTION 110. Separability Clause . . . . . . . 13
SECTION 111. Benefits of Indenture . . . . . . 13
SECTION 112. Governing Law . . . . . . . . . . 14
SECTION 113. Legal Holidays . . . . . . . . . . 14
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally . . . . . . . . . 14
SECTION 202. Form of Trustee's Certificate of
Authentication . . . . . . . . . 15
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in
Series . . . . . . . . . . . . . 15
SECTION 302. Denominations . . . . . . . . . . 19
SECTION 303. Execution, Dating, Certificate of
Authentication . . . . . . . . . 19
SECTION 304. Temporary Securities . . . . . . . 22
SECTION 305. Registration, Registration of Transfer
and Exchange . . . . . . . . . . 22
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . 24
SECTION 307. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . 25
SECTION 308. Persons Deemed Owners . . . . . . 26
SECTION 309. Cancellation by Security Registrar 26
SECTION 310. Computation of Interest . . . . . 27
SECTION 311. Payment to Be in Proper Currency . 27
ARTICLE FOUR
REDEMPTION OF SECURITIES
SECTION 401. Applicability of Article . . . . . 27
SECTION 402. Election to Redeem; Notice to
Trustee . . . . . . . . . . . . . 27
SECTION 403. Selection of Securities to Be
Redeemed . . . . . . . . . . . . 28
SECTION 404. Notice of Redemption . . . . . . . 28
SECTION 405. Securities Payable on Redemption
Date . . . . . . . . . . . . . . 30
SECTION 406. Securities Redeemed in Part . . . 30
ARTICLE FIVE
COVENANTS
SECTION 501. Payment of Securities. . . . . . . 30
SECTION 502. Maintenance of Office or Agency . 31
SECTION 503. Money for Securities Payments to Be
Held in Trust . . . . . . . . . . 31
SECTION 504. Corporate Existence . . . . . . . 33
SECTION 505. Maintenance of Properties . . . . 33
SECTION 506. Waiver of Certain Covenants . . . 33
SECTION 507. Annual Officer's Certificate as to
Compliance. . . . . . . . . . . . 34
ARTICLE SIX
SATISFACTION AND DISCHARGE
SECTION 601. Satisfaction and Discharge of
Securities . . . . . . . . . . . 34
SECTION 602. Satisfaction and Discharge of
Indenture . . . . . . . . . . . . 37
SECTION 603. Application of Trust Money . . . . 37
ARTICLE SEVEN
EVENTS OF DEFAULT; REMEDIES
SECTION 701. Events of Default . . . . . . . . 38
SECTION 702. Acceleration of Maturity; Rescission
and Annulment . . . . . . . . . . 40
SECTION 703. Collection of Indebtedness and Suits
for Enforcement by Trustee . . . 41
SECTION 704. Application of Money Collected . . 42
SECTION 705. Trustee May File Proofs of Claim . 42
SECTION 706. Trustee May Enforce Claims without
Possession of Securities . . . . 43
SECTION 707. Limitation on Suits . . . . . . . 43
SECTION 708. Unconditional Right of Holders to
Receive Principal, Premium and
Interest . . . . . . . . . . . . 44
SECTION 709. Restoration of Rights and Remedies 44
SECTION 710. Rights and Remedies Cumulative . . 44
SECTION 711. Delay or Omission Not Waiver . . . 45
SECTION 712. Control by Holders of Securities . 45
SECTION 713. Waiver of Past Defaults . . . . . 45
SECTION 714. Undertaking for Costs . . . . . . 46
SECTION 715. Waiver of Stay or Extension Laws . 46
ARTICLE EIGHT
THE TRUSTEE
SECTION 801. Certain Duties and
Responsibilities . . . . . . . . 47
SECTION 802. Notice of Defaults . . . . . . . . 48
SECTION 803. Certain Rights of Trustee . . . . 48
SECTION 804. Not Responsible for Recitals or
Issuance of Securities . . . . . 50
SECTION 805. May Hold Securities . . . . . . . 50
SECTION 806. Money Held in Trust . . . . . . . 50
SECTION 807. Compensation and Reimbursement . . 50
SECTION 808. Disqualification; Conflicting
Interests . . . . . . . . . . . . 51
SECTION 809. Corporate Trustee Required;
Eligibility . . . . . . . . . . . 51
SECTION 810. Resignation and Removal; Appointment
of Successor . . . . . . . . . . 52
SECTION 811. Acceptance of Appointment by
Successor . . . . . . . . . . . . 54
SECTION 812. Merger, Conversion, Consolidation or
Succession to Business . . . . . 55
SECTION 813. Preferential Collection of Claims
against Company . . . . . . . . . 55
SECTION 814. Appointment of Authenticating
Agent . . . . . . . . . . . . . . 56
ARTICLE NINE
LISTS OF HOLDERS; REPORTS BY TRUSTEE AND COMPANY
SECTION 901. Lists of Holders . . . . . . . . . 58
SECTION 902. Reports by Trustee and Company . . 58
ARTICLE TEN
CONSOLIDATION, MERGER, CONVEYANCE
OR OTHER TRANSFER
SECTION 1001. Company may Consolidate, etc., Only on
Certain Terms . . . . . . . . . . 59
SECTION 1002. Successor Substituted . . . . . . 60
SECTION 1003. Release of Company upon Conveyance or
Other Transfer . . . . . . . . . 60
SECTION 1004. Merger into Company . . . . . . . 60
SECTION 1005. Transfer of Less than the Entirety 60
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
SECTION 1101. Supplemental Indentures without
Consent of Holders . . . . . . . 63
SECTION 1102. Supplemental Indentures with Consent
of Holders . . . . . . . . . . . 65
SECTION 1103. Execution of Supplemental
Indentures . . . . . . . . . . . 66
SECTION 1104. Effect of Supplemental Indentures 67
SECTION 1105. Conformity with Trust Indenture
Act . . . . . . . . . . . . . . . 67
SECTION 1106. Reference in Securities to
Supplemental Indentures . . . . . 67
SECTION 1107. Modification without Supplemental
Indenture . . . . . . . . . . . . 67
ARTICLE TWELVE
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 1201. Purposes for Which Meetings May Be
Called. . . . . . . . . . . . . . 68
SECTION 1202. Call, Notice and Place of Meetings 68
SECTION 1203. Persons Entitled to Vote at
Meetings . . . . . . . . . . . . 69
SECTION 1204. Quorum; Action . . . . . . . . . . 69
SECTION 1205. Attendance at Meetings; Determination
of Voting Rights; Conduct and
Adjournment of Meetings . . . . . 70
SECTION 1206. Counting Votes and Recording Action of
Meetings . . . . . . . . . . . . 71
SECTION 1207. Action without Meeting . . . . . . 71
ARTICLE THIRTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
and Directors
SECTION 1301. Liability Solely Corporate . . . . 72
Signatures . . . . . . . . . . . . . . . . . . . . . . . 73
<PAGE>
INDENTURE, dated as of 1, 1997 between THE WASHINGTON
----------
WATER POWER COMPANY, a corporation organized and existing under
the laws of the State of Washington (hereinafter sometimes called
the "Company"), and The Chase Manhattan Bank, a New York banking
corporation, trustee (hereinafter sometimes called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time
to time of unsecured debentures, notes or other evidences of
indebtedness (herein called the "Securities"), to be issued in
one or more series as contemplated herein; all acts necessary to
make this Indenture a valid agreement of the Company have been
performed.
NOW, THEREFORE, THIS INDENTURE WITNESSETH that, in
consideration of the premises and of the purchase of the
Securities by the Holders thereof, it is hereby covenanted and
agreed by and between the Company and the Trustee that all the
Securities are to be authenticated and delivered subject to the
further covenants, conditions and trusts hereinafter set forth,
and the Company hereby covenants and agrees to and with the
Trustee, for the equal and ratable benefit of all Holders of the
Securities or of series thereof (except as otherwise contemplated
herein), as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. GENERAL DEFINITIONS.
For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have
the meanings assigned to them in this Article and
include the plural as well as the singular;
(b) all terms used herein without
definition which are defined in the Trust Indenture
Act, either directly or by reference therein, have
the meanings assigned to them therein;
(c) all terms used herein without
definition which are defined in the Uniform
Commercial Code as in effect in any jurisdiction in
which any property of the Company is located shall
have the meanings assigned to them therein with
respect to such property;
(d) all accounting terms not otherwise
defined herein have the meanings assigned to them
in accordance with generally accepted accounting
principles in the United States; and, except as
otherwise herein expressly provided, the term
"generally accepted accounting principles" with
respect to any computation required or permitted
hereunder shall mean such accounting principles as
are generally accepted in the United States at the
date of such computation or, at the election of the
Company from time to time, at the date of the
execution and delivery of this Indenture; provided,
however, that in determining generally accepted
accounting principles applicable to the Company,
effect shall be given, to the extent required, to
any order, rule or regulation of any administrative
agency, regulatory authority or other governmental
body having jurisdiction over the Company; and
(e) the words "herein", "hereof" and
"hereunder" and other words of similar import refer
to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"ACT", when used with respect to any Holder of a
Security, has the meaning specified in Section 104.
"AFFILIATE" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "CONTROL" when used
with respect to any specified Person means the power to direct
generally the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "CONTROLLING" and
"CONTROLLED" have meanings correlative to the foregoing.
"AUTHENTICATING AGENT" means any Person (other than
the Company or an Affiliate of the Company) authorized by the
Trustee to act on behalf of the Trustee to authenticate the
Securities of one or more series.
"AUTHORIZED OFFICER" means the Chairman of the
Board, the President, any Vice President, the Treasurer or the
Corporate Secretary or any other duly authorized officer, agent
or attorney-in-fact of the Company named in an Officer's
Certificate signed by any of such corporate officers.
"BOARD OF DIRECTORS" means either the board of
directors of the Company or any committee thereof duly authorized
to act in respect of matters relating to this Indenture.
"BOARD RESOLUTION" means a copy of a resolution
certified by the Corporate Secretary or an Assistant Corporate
Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"BUSINESS DAY", when used with respect to a Place
of Payment or any other particular location specified in the
Securities or this Indenture, means any day, other than a
Saturday or Sunday, which is not a day on which banking
institutions or trust companies in such Place of Payment or other
location are generally authorized or required by law, regulation
or executive order to remain closed, except as may be otherwise
specified as contemplated by Section 301.
"COMMISSION" means the Securities and Exchange
Commission, as from time to time constituted, created under the
Securities Exchange Act of 1934, as amended, or, if at any time
after the date of the execution and delivery of this Indenture
such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body, if
any, performing such duties at such time.
"COMPANY" means the Person named as the "Company"
in the first paragraph of this Indenture until a successor Person
shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter "Company" shall mean such
successor Person.
"COMPANY ORDER" or "COMPANY REQUEST" means a
written request or order signed in the name of the Company by an
Authorized Officer and delivered to the Trustee.
"CORPORATE TRUST OFFICE" means the office of the
Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the
date of the execution and delivery of this Indenture is located
at 450 West 33rd Street, New York, New York 10001.
"CORPORATION" means a corporation, association,
company, joint stock company or business trust.
"DISCOUNT SECURITY" means any Security which
provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 702. "INTEREST" with
respect to a Discount Security means interest, if any, borne by
such Security at a Stated Interest Rate.
"DOLLAR" or "$" means a dollar or other equivalent
unit in such coin or currency of the United States as at the time
shall be legal tender for the payment of public and private
debts.
"ELIGIBLE OBLIGATIONS" means:
(a) with respect to Securities denominated
in Dollars, Government Obligations; or
(b) with respect to Securities denominated
in a currency other than Dollars or in a composite
currency, such other obligations or instruments as
shall be specified with respect to such Securities
as contemplated by Section 301.
"EVENT OF DEFAULT" has the meaning specified in
Section 701.
"FAIR VALUE" has the meaning specified in Section
1005.
"GOVERNMENTAL AUTHORITY" means the government of
the United States or of any State or Territory thereof or of the
District of Columbia or of any county, municipality or other
political subdivision of any thereof, or any department, agency,
authority or other instrumentality of any of the foregoing.
"GOVERNMENT OBLIGATIONS" means:
(a) direct obligations of, or obligations
the principal of and interest on which are
unconditionally guaranteed by, the United States
entitled to the benefit of the full faith and
credit thereof; and
(b) certificates, depositary receipts or
other instruments which evidence a direct ownership
interest in obligations described in clause (a)
above or in any specific interest or principal
payments due in respect thereof; provided, however,
that the custodian of such obligations or specific
interest or principal payments shall be a bank or
trust company (which may include the Trustee or any
Paying Agent) subject to Federal or State
supervision or examination with a combined capital
and surplus of at least Fifty Million Dollars
($50,000,000); and provided, further, that except
as may be otherwise required by law, such custodian
shall be obligated to pay to the holders of such
certificates, depositary receipts or other instru-
ments the full amount received by such custodian in
respect of such obligations or specific payments
and shall not be permitted to make any deduction
therefrom.
"HOLDER" means a Person in whose name a Security is
registered in the Security Register.
"INDENTURE" means this instrument as originally
executed and delivered and as it may from time to time be amended
and/or supplemented by one or more indentures or other
instruments supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of
particular series of Securities established as contemplated by
Section 301.
"INDEPENDENT EXPERT'S CERTIFICATE" has the meaning
specified in Section 1005.
"INTEREST PAYMENT DATE", when used with respect to
any Security, means the Stated Maturity of an installment of
interest on such Security.
"MATURITY", when used with respect to any Security,
means the date on which the principal of such Security or an
installment of principal becomes due and payable as provided in
such Security or in this Indenture, whether at the Stated
Maturity, by declaration of acceleration, upon call for
redemption or otherwise.
"NOTICE OF DEFAULT" has the meaning specified in
Section 701.
"OFFICER'S CERTIFICATE" means a certificate signed
by an Authorized Officer and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of
counsel, who may be counsel for the Company or other counsel
acceptable to the Trustee and who may be an employee or Affiliate
of the Company.
"OUTSTANDING", when used with respect to
Securities, means, as of the date of determination, all
Securities theretofore authenticated and delivered under this
Indenture, except:
(a) Securities theretofore canceled or
delivered to the Trustee for cancellation;
(b) Securities deemed to have been paid
for all purposes of this Indenture in accordance
with Section 601 (whether or not the Company's
indebtedness in respect thereof shall be satisfied
and discharged for any other purpose); and
(c) Securities which have been paid
pursuant to Section 306 or in exchange for or in
lieu of which other Securities have been
authenticated and delivered pursuant to this
Indenture, other than any such Securities in
respect of which there shall have been presented to
the Trustee proof satisfactory to it and the
Company that such Securities are held by a bona
fide purchaser or purchasers in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether or not the Holders
of the requisite principal amount of the Securities Outstanding
under this Indenture, or the Outstanding Securities of any series
or Tranche, have given or made any request, demand,
authorization, direction, notice, consent or waiver hereunder or
whether or not a quorum is present at a meeting of Holders of
Securities,
(x) Securities owned by the Company or any
other obligor upon the Securities or any Affiliate
of the Company or of such other obligor (unless the
Company, such obligor or such Affiliate owns all
Securities Outstanding under this Indenture, or all
Outstanding Securities of each such series and each
such Tranche, as the case may be, determined
without regard to this clause (x)) shall be
disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee
shall be protected in relying upon any such
request, demand, authorization, direction, notice,
consent or waiver or upon any such determination as
to the presence of a quorum, only Securities which
the Trustee knows to be so owned shall be so
disregarded; provided, however, that Securities so
owned which have been pledged in good faith may be
regarded as Outstanding if it is established to the
reasonable satisfaction of the Trustee that the
pledgee, and not the Company, any such other
obligor or Affiliate of either thereof, has the
right so to act with respect to such Securities and
that the pledgee is not the Company or any other
obligor upon the Securities or any Affiliate of the
Company or of such other obligor; and
(y) the principal amount of a Discount
Security that shall be deemed to be Outstanding for
such purposes shall be the amount of the principal
thereof that would be due and payable as of the
date of such determination upon a declaration of
acceleration of the Maturity thereof pursuant to
Section 702; and
provided, further, that, in the case of any Security the
principal of which is payable from time to time without
presentment or surrender, the principal amount of such Security
that shall be deemed to be Outstanding at any time for all
purposes of this Indenture shall be the original principal amount
thereof less the aggregate amount of principal thereof
theretofore paid.
"PAYING AGENT" means any Person, including the
Company, authorized by the Company to pay the principal of and
premium, if any, or interest, if any, on any Securities on behalf
of the Company.
"PERIODIC OFFERING" means an offering of Securities
of a series from time to time any or all of the specific terms of
which Securities, including without limitation the rate or rates
of interest, if any, thereon, the Stated Maturity or Maturities
thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Company or its agents from
time to time subsequent to the initial request for the
authentication and delivery of such Securities by the Trustee,
all as contemplated in Section 301 and clause (b) of Section 303.
"PERSON" means any individual, corporation,
partnership, limited liability partnership, limited liability
company, joint venture, trust or unincorporated organization or
any Governmental Authority.
"PLACE OF PAYMENT", when used with respect to the
Securities of any series, or any Tranche thereof, means the place
or places, specified as contemplated by Section 301, at which,
subject to Section 502, principal of and premium, if any, and
interest, if any, on the Securities of such series or Tranche are
payable.
"PREDECESSOR SECURITY" of any particular Security
means every previous Security evidencing all or a portion of the
same debt as that evidenced by such particular Security; and, for
the purposes of this definition, any Security authenticated and
delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed (to
the extent lawful) to evidence the same debt as the mutilated,
destroyed, lost or stolen Security.
"REDEMPTION DATE", when used with respect to any
Security to be redeemed, means the date fixed for such redemption
by or pursuant to this Indenture.
"REDEMPTION PRICE", when used with respect to any
Security to be redeemed, means the price at which it is to be
redeemed pursuant to this Indenture.
"REGULAR RECORD DATE" for the interest payable on
any Interest Payment Date on the Securities of any series means
the date specified for that purpose as contemplated by Section
301.
"REQUIRED CURRENCY" has the meaning specified in
Section 311.
"RESPONSIBLE OFFICER", when used with respect to
the Trustee, means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"SECURITIES" means any bonds, notes and other
evidences of indebtedness authenticated and delivered under this
Indenture.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have
the respective meanings specified in Section 305.
"SPECIAL RECORD DATE" for the payment of any Unpaid
Interest on the Securities of any series means a date fixed by
the Trustee pursuant to Section 307.
"STATED INTEREST RATE" means a rate (whether fixed
or variable) at which an obligation by its terms is stated to
bear simple interest. Any calculation or other determination to
be made under this Indenture by reference to the Stated Interest
Rate on an obligation shall be made (a) if the Company's
obligations in respect of any other indebtedness shall be
evidenced or secured in whole or in part by such obligation, by
reference to the lower of the Stated Interest Rate on such
obligation and the Stated Interest Rate on such other
indebtedness and (b) without regard to the effective interest
cost to the Company of such obligation or of any such other
indebtedness.
"STATED MATURITY", when used with respect to any
obligation or any installment of principal thereof or interest
thereon, means the date on which the principal of such obligation
or such installment of principal or interest is stated to be due
and payable (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension).
"SUCCESSOR" has the meaning set forth in Section
1001.
"TRANCHE" means a group of Securities which (a) are
of the same series and (b) have identical terms except as to
principal amount and/or date of issuance.
"TRUST INDENTURE ACT" means, as of any time, the
Trust Indenture Act of 1939, or any successor statute, as in
effect at such time.
"TRUSTEE" means the Person named as the "Trustee"
in the first paragraph of this Indenture until a successor
trustee shall have become such with respect to one or more series
of Securities pursuant to the applicable provisions of this
Indenture, and thereafter "Trustee" shall mean or include each
Person who is then a Trustee hereunder, and, if at any time there
is more than one Person acting as trustee hereunder, "Trustee"
shall mean each such Person so acting.
"UNITED STATES" means the United States of America,
its Territories, its possessions and other areas subject to its
political jurisdiction.
"UNPAID INTEREST" has the meaning specified in
Section 307.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided in this
Indenture, upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture,
the Company shall furnish to the Trustee an Officer's Certificate
stating that all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied
with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been
complied with, it being understood that in the case of any such
application or request as to which the furnishing of such
documents is specifically required by any provision of this
Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Indenture shall include:
(a) a statement that each individual
signing such certificate or opinion has read such
covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and
scope of the examination or investigation upon
which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of
each such individual, such individual has made such
examination or investigation as is necessary to
enable such individual to express an informed
opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the
opinion of each such individual, such condition or
covenant has been complied with.
SECTION 103. CONTENT AND FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
(a) Any Officer's Certificate may be based
(without further examination or investigation), insofar as it
relates to or is dependent upon legal matters, upon an opinion
of, or representations by, counsel, unless, in any case, such
officer has actual knowledge that the certificate or opinion or
representations with respect to the matters upon which such
Officer's Certificate may be based as aforesaid are erroneous.
Any Opinion of Counsel may be based (without
further examination or investigation), insofar as it relates to
or is dependent upon factual matters, information with respect to
which is in the possession of the Company, upon a certificate of,
or representations by, an officer or officers of the Company,
unless such counsel has actual knowledge that the certificate or
opinion or representations with respect to the matters upon which
his opinion may be based as aforesaid are erroneous. In
addition, any Opinion of Counsel may be based (without further
examination or investigation), insofar as it relates to or is
dependent upon matters covered in an Opinion of Counsel rendered
by other counsel, upon such other Opinion of Counsel, unless such
counsel has actual knowledge that the Opinion of Counsel rendered
by such other counsel with respect to the matters upon which his
Opinion of Counsel may be based as aforesaid are erroneous. If,
in order to render any Opinion of Counsel provided for herein,
the signer thereof shall deem it necessary that additional facts
or matters be stated in any Officer's Certificate provided for
herein, then such certificate may state all such additional facts
or matters as the signer of such Opinion of Counsel may request.
(b) In any case where several matters are
required to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person,
or that they be so certified or covered by only one document, but
one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to
such matters in one or several documents. Where any Person is
required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
(c) Whenever, subsequent to the receipt by
the Trustee of any Board Resolution, Officer's Certificate,
Opinion of Counsel or other document or instrument, a clerical,
typographical or other inadvertent or unintentional error or
omission shall be discovered therein, a new document or
instrument may be substituted therefor in corrected form with the
same force and effect as if originally filed in the corrected
form and, irrespective of the date or dates of the actual
execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered
as of the date or dates required with respect to the document or
instrument for which it is substituted. Anything in this
Indenture to the contrary notwithstanding, if any such corrective
document or instrument indicates that action has been taken by or
at the request of the Company which could not have been taken had
the original document or instrument not contained such error or
omission, the action so taken shall not be invalidated or
otherwise rendered ineffective but shall be and remain in full
force and effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without limiting the
generality of the foregoing, any Securities issued under the
authority of such defective document or instrument shall
nevertheless be the valid obligations of the Company entitled to
the benefits provided by this Indenture equally and ratably with
all other Outstanding Securities, except as aforesaid.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization,
direction, notice, consent, election, waiver or other action
provided by this Indenture to be made, given or taken by Holders
may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing or, alternatively, may be
embodied in and evidenced by the record of Holders voting in
favor thereof, either in person or by proxies duly appointed in
writing, at any meeting of Holders duly called and held in
accordance with the provisions of Article Twelve, or a
combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both
are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments and any
such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "ACT" of the
Holders signing such instrument or instruments and so voting at
any such meeting. Proof of execution of any such instrument or
of a writing appointing any such agent, or of the holding by any
Person of a Security, shall be sufficient for any purpose of this
Indenture and (subject to Section 801) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this
Section. The record of any meeting of Holders shall be proved in
the manner provided in Section 1206.
(b) The fact and date of the execution by
any Person of any such instrument or writing may be proved by the
affidavit of a witness of such execution or by a certificate of a
notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution
thereof or may be proved in any other manner which the Trustee
and the Company deem sufficient. Where such execution is by a
signer acting in a capacity other than his individual capacity,
such certificate or affidavit shall also constitute sufficient
proof of his authority.
(c) The ownership of Securities, the
principal amount (except as otherwise contemplated in clause (y)
of the first proviso to the definition of Outstanding) and serial
numbers of Securities held by any Person, and the date of holding
the same, shall be proved by the Security Register.
(d) Any request, demand, authorization,
direction, notice, consent, election, waiver or other Act of a
Holder shall bind every future Holder of the same Security and
the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(e) Until such time as written instruments
shall have been delivered to the Trustee with respect to the
requisite percentage of principal amount of Securities for the
action contemplated by such instruments, any such instrument
executed and delivered by or on behalf of a Holder may be revoked
with respect to any or all of such Securities by written notice
by such Holder or any subsequent Holder, proven in the manner in
which such instrument was proven.
(f) Securities of any series, or any
Tranche thereof, authenticated and delivered after any Act of
Holders may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any action taken
by such Act of Holders. If the Company shall so determine, new
Securities of any series, or any Tranche thereof, so modified as
to conform, in the opinion of the Trustee and the Company, to
such action may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series or Tranche.
(g) The Company may, at its option, by
Company Order, fix in advance a record date for the determination
of Holders entitled to give any request, demand, authorization,
direction, notice, consent, waiver or other Act solicited by the
Company, but the Company shall have no obligation to do so;
provided, however, that the Company may not fix a record date for
the giving or making of any notice, declaration, request or
direction referred to in the next sentence. In addition, the
Trustee may, at its option, fix in advance a record date for the
determination of Holders of Securities of any series entitled to
join in the giving or making of any Notice of Default, any
declaration of acceleration referred to in Section 702, any
request to institute proceedings referred to in Section 707 or
any direction referred to in Section 712, in each case with
respect to Securities of such series. If any such record date is
fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act, or such notice, declaration,
request or direction, may be given before or after such record
date, but only the Holders of record at the close of business on
the record date shall be deemed to be Holders for the purposes of
determining (i) whether Holders of the requisite proportion of
the Outstanding Securities have authorized or agreed or consented
to such Act (and for that purpose the Outstanding Securities
shall be computed as of the record date) and/or (ii) which
Holders may revoke any such Act (notwithstanding subsection (e)
of this Section); and any such Act, given as aforesaid, shall be
effective whether or not the Holders which authorized or agreed
or consented to such Act remain Holders after such record date
and whether or not the Securities held by such Holders remain
Outstanding after such record date.
SECTION 105. NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction,
notice, consent, election, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon,
given or furnished to, or filed with, the Trustee by any Holder
or by the Company, or the Company by the Trustee or by any
Holder, shall be sufficient for every purpose hereunder (unless
otherwise expressly provided herein) if the same shall be in
writing and delivered personally to an officer or other
responsible employee of the addressee, or transmitted by
facsimile transmission, telex or other direct written electronic
means to such telephone number or other electronic communications
address set forth opposite such parties name below or as the
parties hereto shall from time to time designate, or transmitted
by registered mail, charges prepaid, to the applicable address
set opposite such party's name below or to such other address as
either party hereto may from time to time designate:
If to the Trustee, to:
If to the Company, to:
The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Facsimile: (509) 482-4879
Any communication contemplated herein shall be
deemed to have been made, given, furnished and filed if
personally delivered, on the date of delivery, if transmitted by
facsimile transmission, telex or other direct written electronic
means, on the date of transmission, and if transmitted by
registered mail, on the date of receipt.
SECTION 106. NOTICE TO HOLDERS OF SECURITIES; WAIVER.
Except as otherwise expressly provided herein,
where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given, and shall be deemed
given, to Holders if in writing and mailed, first-class postage
prepaid, to each Holder affected by such event, at the address of
such Holder as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice.
In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable
to give such notice to Holders by mail, then such notification as
shall be made with the approval of the Trustee shall constitute a
sufficient notification for every purpose hereunder. In any case
where notice to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice
with respect to other Holders.
Any notice required by this Indenture may be waived
in writing by the Person entitled to receive such notice, either
before or after the event otherwise to be specified therein, and
such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Indenture limits,
qualifies or conflicts with another provision hereof which is
required or deemed to be included in this Indenture by, or is
otherwise governed by, any provision of the Trust Indenture Act,
such other provision shall control; and if any provision hereof
otherwise conflicts with the Trust Indenture Act, the Trust
Indenture Act shall control.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings in this Indenture
and the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by
the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or the
Securities shall be held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or the Securities,
express or implied, shall give to any Person, other than the
parties hereto, their successors hereunder and the Holders, any
benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 112. GOVERNING LAW.
This Indenture and the Securities shall be governed
by and construed in accordance with the law of the State of New
York (including without limitation Section 5-1401 of the New York
General Obligations Law or any successor to such statute), except
to the extent that the Trust Indenture Act shall be applicable.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security shall not be a
Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or of the Securities other than
a contrary provision in the Securities of any series, or any
Tranche thereof, or in the indenture supplemental hereto, Board
Resolution or Officer's Certificate which establishes the terms
of the Securities of such series or Tranche) payment of interest
or principal and premium, if any, need not be made at such Place
of Payment on such date, but may be made on the next succeeding
Business Day at such Place of Payment with the same force and
effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity, and, if such payment is made or
duly provided for on such Business Day, no interest shall accrue
on the amount so payable for the period from and after such
Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be, to such Business Day.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The definitive Securities of each series shall be
in substantially the form or forms established in the indenture
supplemental hereto establishing such series, or in a Board
Resolution establishing such series, or in an Officer's
Certificate pursuant to such a supplemental indenture or Board
Resolution, in any case with such appropriate insertions,
omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as
evidenced by their execution of the Securities. If the form or
forms of Securities of any series are established in a Board
Resolution or in an Officer's Certificate pursuant to a Board
Resolution, such Board Resolution and Officer's Certificate, if
any, shall be delivered to the Trustee at or prior to the
delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
The Securities of each series shall be issuable in
registered form without coupons. The definitive Securities shall
be produced in such manner as shall be determined by the officers
executing such Securities, as evidenced by their execution
thereof.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall
be in substantially the form set forth below:
This is one of the Securities of the series
designated therein referred to in the within-
mentioned Indenture.
---------------------------------
as Trustee
By:
-----------------------------
Authorized Officer
ARTICLE THREE
THE SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which
may be authenticated and delivered under this Indenture is
unlimited.
The Securities may be issued in one or more series.
Subject to the last paragraph of this Section, prior to the
authentication and delivery of Securities of any series there
shall be established by specification in an Officer's
Certificate, a supplemental indenture or a Board Resolution:
(a) the title of the Securities of such
series (which shall distinguish the Securities of
such series from Securities of all other series);
(b) any limit upon the aggregate principal
amount of the Securities of such series which may
be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered
upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of such series
pursuant to Section 304, 305, 306, 406 or 1106 and
except for any Securities which, pursuant to
Section 303, are deemed never to have been
authenticated and delivered hereunder);
(c) the Persons (without specific
identification) to whom interest, if any, on
Securities of such series, or any Tranche thereof,
shall be payable, if other than the Persons in
whose names such Securities (or one or more
Predecessor Securities) are registered at the close
of business on the Regular Record Date for such
interest;
(d) the date or dates on which the
principal of the Securities of such series, or any
Tranche thereof, is payable or any formulary or
other method or other means by which such date or
dates shall be determined, by reference to an index
or other fact or event ascertainable outside of
this Indenture or otherwise (without regard to any
provisions for redemption, prepayment,
acceleration, purchase or extension); and the
right, if any, to extend the Maturity of the
Securities of such series, or any Tranche thereof,
and the duration of any such extension;
(e) the rate or rates at which the
Securities of such series, or any Tranche thereof,
shall bear interest, if any (including the rate or
rates at which overdue principal shall bear
interest, if different from the rate or rates at
which such Securities shall bear interest prior to
Maturity, and, if applicable, the rate or rates at
which overdue premium or interest shall bear
interest, if any), or any formulary or other method
or other means by which such rate or rates shall be
determined, by reference to an index or other fact
or event ascertainable outside of this Indenture or
otherwise; the date or dates from which such
interest shall accrue; the Interest Payment Dates
on which such interest shall be payable and the
Regular Record Date, if any, for the interest
payable on such Securities on any Interest Payment
Date; the basis of computation of interest, if
other than as provided in Section 310; and the
right, if any, to extend the interest payment
periods and the duration of any such extension;
(f) the place or places at which and/or
the methods (if other than as provided elsewhere in
this Indenture) by which (i) the principal of and
premium, if any, and interest, if any, on
Securities of such series, or any Tranche thereof,
shall be payable, (ii) registration of transfer of
Securities of such series, or any Tranche thereof,
may be effected, (iii) exchanges of Securities of
such series, or any Tranche thereof, may be
effected and (iv) notices and demands to or upon
the Company in respect of the Securities of such
series, or any Tranche thereof, and this Indenture
may be served; the Security Registrar and any
Paying Agent or Agents for such series or Tranche;
and, if such is the case, that the principal of
such Securities shall be payable without the
presentment or surrender thereof;
(g) the period or periods within which or
the date or dates on which, the price or prices at
which and the terms and conditions upon which the
Securities of such series, or any Tranche thereof,
may be redeemed, in whole or in part, at the option
of the Company;
(h) the obligation or obligations, if any,
of the Company to redeem or purchase the Securities
of such series, or any Tranche thereof, pursuant to
any sinking fund or other mandatory redemption
provisions or at the option of a Holder thereof and
the period or periods within which or the date or
dates on which, the price or prices at which and
the terms and conditions upon which such Securities
shall be redeemed or purchased, in whole or in
part, pursuant to such obligation, and applicable
exceptions to the requirements of Section 404 in
the case of mandatory redemption or redemption at
the option of the Holder;
(i) the denominations in which Securities
of such series, or any Tranche thereof, shall be
issuable if other than denominations of One
Thousand Dollars ($1,000) and any integral multiple
thereof;
(j) the currency or currencies, including
composite currencies, in which payment of the
principal of or premium, if any, or interest, if
any, on the Securities of such series, or any
Tranche thereof, shall be payable (if other than in
Dollars) and the formulary or other method or other
means by which the equivalent of any such amount in
Dollars is to be determined for any purpose,
including for the purpose of determining the
principal amount of such Securities deemed to be
Outstanding at any time;
(k) if the principal of or premium, if
any, or interest, if any, on the Securities of such
series, or any Tranche thereof, are to be payable,
at the election of the Company or a Holder thereof,
in a coin or currency other than that in which the
Securities are stated to be payable, the period or
periods within which, and the terms and conditions
upon which, such election may be made;
(l) if the principal of or premium, if
any, or interest, if any, on the Securities of such
series, or any Tranche thereof, are to be payable,
or are to be payable at the election of the Company
or a Holder thereof, in securities or other
property, the type and amount of such securities or
other property, or the formulary or other method or
other means by which such amount shall be
determined, and the period or periods within which,
and the terms and conditions upon which, any such
election may be made;
(m) if the amount payable in respect of
the principal of or premium, if any, or interest,
if any, on the Securities of such series, or any
Tranche thereof, may be determined with reference
to an index or other fact or event ascertainable
outside of this Indenture, the manner in which such
amounts shall be determined (to the extent not
established pursuant to clause (e) of this
paragraph);
(n) if other than the principal amount
thereof, the portion of the principal amount of
Securities of such series, or any Tranche thereof,
which shall be payable upon declaration of ac-
celeration of the Maturity thereof pursuant to
Section 702;
(o) the terms, if any, pursuant to which
the Securities of such series, or any Tranche
thereof, may be converted into or exchanged for
shares of capital stock or other securities of the
Company or any other Person;
(p) the obligations or instruments, if
any, which shall be considered to be Eligible
Obligations in respect of the Securities of such
series, or any Tranche thereof, denominated in a
currency other than Dollars or in a composite
currency, and any additional or alternative
provisions for the reinstatement of the Company's
indebtedness in respect of such Securities after
the satisfaction and discharge thereof as provided
in Section 601;
(q) if the Securities of such series, or
any Tranche thereof, are to be issued in global
form, (i) any limitations on the rights of the
Holder or Holders of such Securities to transfer or
exchange the same or to obtain the registration of
transfer thereof, (ii) any limitations on the
rights of the Holder or Holders thereof to obtain
certificates therefor in definitive form in lieu of
temporary form and (iii) any and all other matters
incidental to such Securities;
(r) if the Securities of such series, or
any Tranche thereof, are to be issuable as bearer
securities, any and all matters incidental thereto
which are not specifically addressed in a
supplemental indenture as contemplated by clause
(f) of Section 1101;
(s) to the extent not established pursuant
to clause (q) of this paragraph, any limitations on
the rights of the Holders of the Securities of such
Series, or any Tranche thereof, to transfer or
exchange such Securities or to obtain the
registration of transfer thereof; and if a service
charge will be made for the registration of
transfer or exchange of Securities of such series,
or any Tranche thereof, the amount or terms
thereof;
(t) any exceptions to Section 113, or
variation in the definition of Business Day, with
respect to the Securities of such series, or any
Tranche thereof; and
(u) any other terms of the Securities of
such series, or any Tranche thereof.
With respect to Securities of a series subject to a
Periodic Offering, the Officer's Certificate, the indenture
supplemental hereto or the Board Resolution which establishes
such series, as the case may be, may provide general terms or
parameters for Securities of such series and provide either that
the specific terms of Securities of such series, or any Tranche
thereof, shall be specified in a Company Order or that such terms
shall be determined by the Company or its agents in accordance
with procedures specified in a Company Order as contemplated by
clause (b) of Section 303.
Unless otherwise specified with respect to a series
of Securities pursuant to Section 301(b), any limit upon the
aggregate principal amount of a series of Securities may be
increased without the consent of any Holders and additional
Securities of such series may be authenticated and delivered up
to the limit upon the aggregate principal amount authorized with
respect to such series as so increased.
Anything herein to the contrary notwithstanding,
the Trustee shall be under no obligation to authenticate and
deliver Securities of any series the terms of which, established
as contemplated by this Section, would affect the rights, duties,
obligations, liabilities or immunities of the Trustee under this
Indenture or otherwise.
SECTION 302. DENOMINATIONS.
Unless otherwise provided as contemplated by
Section 301 with respect to any series of Securities, or any
Tranche thereof, the Securities of each series shall be issuable
in denominations of One Thousand Dollars ($1,000) and any
integral multiple thereof.
SECTION 303. EXECUTION, DATING, CERTIFICATE OF AUTHENTICATION.
Unless otherwise provided as contemplated by
Section 301 with respect to any series of Securities, or any
Tranche thereof, the Securities shall be executed on behalf of
the Company by an Authorized Officer, and may have the corporate
seal of the Company affixed thereto or reproduced thereon and
attested by any other Authorized Officer. The signature of any
or all of these officers on the Securities may be manual or
facsimile.
Securities bearing the manual or facsimile
signatures of individuals who were at the time of execution
Authorized Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of
such Securities or did not hold such offices at the date of such
Securities.
The Trustee shall authenticate and deliver
Securities of a series, for original issue, at one time or from
time to time in accordance with the Company Order referred to
below, upon receipt by the Trustee of:
(a) the instrument or instruments estab-
lishing the form or forms and terms of such series,
as provided in Sections 201 and 301;
(b) a Company Order requesting the
authentication and delivery of such Securities and,
to the extent that the terms of such Securities
shall not have been established in an indenture
supplemental hereto or in a Board Resolution, or in
an Officer's Certificate pursuant to a supplemental
indenture or Board Resolution, all as contemplated
by Sections 201 and 301, either (i) establishing
such terms or (ii) in the case of Securities of a
series subject to a Periodic Offering, specifying
procedures, acceptable to the Trustee, by which
such terms are to be established (which procedures
may provide for authentication and delivery
pursuant to oral or electronic instructions from
the Company or any agent or agents thereof, which
oral instructions are to be promptly confirmed
electronically or in writing), in either case in
accordance with the instrument or instruments
delivered pursuant to clause (a) above;
(c) Securities of such series, executed on
behalf of the Company by an Authorized Officer;
(d) an Opinion of Counsel to the effect
that:
(i) the form or forms of such Securities
have been duly authorized by the Company and have
been established in conformity with the
provisions of this Indenture;
(ii) the terms of such Securities have been
duly authorized by the Company and have been
established in conformity with the provisions of
this Indenture; and
(iii) when such Securities shall have been
authenticated and delivered by the Trustee and
issued and delivered by the Company in the manner
and subject to any conditions specified in such
Opinion of Counsel, such Securities will
constitute valid obligations of the Company,
entitled to the benefits provided by this
Indenture equally and ratably with all other
Securities then Outstanding;
provided, however, that, with respect to Securities
of a series subject to a Periodic Offering, the
Trustee shall be entitled to receive such Opinion
of Counsel only once at or prior to the time of the
first authentication and delivery of such
Securities (provided that such Opinion of Counsel
addresses the authentication and delivery of all
Securities of such series) and that, in lieu of the
opinions described in clauses (ii) and (iii) above,
Counsel may opine that:
(x) when the terms of such Securities
shall have been established pursuant to a Company
Order or Orders or pursuant to such procedures as
may be specified from time to time by a Company
Order or Orders, all as contemplated by and in
accordance with the instrument or instruments
delivered pursuant to clause (a) above, such
terms will have been duly authorized by the
Company and will have been established in
conformity with the provisions of this Indenture;
and
(y) when such Securities shall have been
authenticated and delivered by the Trustee in
accordance with this Indenture and the Company
Order or Orders or the specified procedures
referred to in paragraph (x) above and issued and
delivered by the Company in the manner and
subject to any conditions specified in such
Opinion of Counsel, such Securities will
constitute valid obligations of the Company,
entitled to the benefits provided by this
Indenture equally and ratably with all other
Securities then Outstanding.
With respect to Securities of a series subject to a
Periodic Offering, the Trustee may conclusively rely, as to the
authorization by the Company of any of such Securities, the forms
and terms thereof, the validity thereof and the compliance of the
authentication and delivery thereof with the terms and conditions
of this Indenture, upon the Opinion or Opinions of Counsel and
the certificates and other documents delivered pursuant to this
Article at or prior to the time of the first authentication and
delivery of Securities of such series until any of such opinions,
certificates or other documents have been superseded or revoked
or expire by their terms. In connection with the authentication
and delivery of Securities of a series subject to a Periodic
Offering, the Trustee shall be entitled to assume that the
Company's instructions to authenticate and deliver such
Securities do not violate any applicable law or any applicable
rule, regulation or order of any Governmental Authority having
jurisdiction over the Company.
If the form of terms of the Securities of any
series have been established by or pursuant to a Board Resolution
or an Officer's Certificate as permitted by Sections 201 or 301,
the Trustee shall not be required to authenticate such Securities
if the issuance of such Securities pursuant to this Indenture
will affect the Trustee's own rights, duties or immunities under
the Securities and this Indenture or otherwise in a manner which
is not reasonably acceptable to the Trustee.
Unless otherwise specified as contemplated by
Section 301 with respect to any series of Securities, or any
Tranche thereof, each Security shall be dated the date of its
authentication.
Unless otherwise specified as contemplated by
Section 301 with respect to any series of Securities, or any
Tranche thereof, no Security shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose
unless there appears on such Security a certificate of
authentication substantially in the form provided for herein
executed by the Trustee or an Authenticating Agent by manual
signature of an authorized officer thereof, and such certificate
upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and
delivered hereunder and is entitled to the benefits of this
Indenture. Notwithstanding the foregoing, if (a) any Security
shall have been authenticated and delivered hereunder to the
Company, or any Person acting on its behalf, but shall never have
been issued and sold by the Company, (b) the Company shall
deliver such Security to the Security Registrar for cancellation
or shall cancel such Security and deliver evidence of such
cancellation to the Trustee, in each case as provided in Section
309, and (c) the Company, at its election, shall deliver to the
Trustee a written statement (which need not comply with Section
102 and need not be accompanied by an Officer's Certificate or an
Opinion of Counsel) stating that such Security has never been
issued and sold by the Company, then, for all purposes of this
Indenture, such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled
to the benefits hereof.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of
any series, or any Tranche thereof, the Company may execute, and
upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed,
typewritten, mimeographed, photocopied or otherwise produced, in
any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued, with such
appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities;
provided, however, that temporary Securities need not recite
specific redemption, sinking fund, conversion or exchange
provisions.
Except as otherwise specified as contemplated by
Section 301 with respect to the Securities of any series, or any
Tranche thereof, after the preparation of definitive Securities
of such series or Tranche, the temporary Securities of such
series or Tranche shall be exchangeable, without charge to the
Holder thereof, for definitive Securities of such series or
Tranche upon surrender of such temporary Securities at the office
or agency of the Company maintained pursuant to Section 502 in a
Place of Payment for such Securities. Upon such surrender of
temporary Securities, the Company shall, except as aforesaid,
execute and the Trustee shall authenticate and deliver in ex-
change therefor definitive Securities of the same series and
Tranche, of authorized denominations and of like tenor and
aggregate principal amount.
Until exchanged in full as hereinabove provided,
temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of
the same series and Tranche and of like tenor authenticated and
delivered hereunder.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND
EXCHANGE.
The Company shall cause to be kept in one of the
offices designated pursuant to Section 502, with respect to the
Securities of each series, or any Tranche thereof, a register
(the "SECURITY REGISTER") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for
the registration of Securities of such series or Tranche and the
registration of transfer thereof. The Company shall designate
one Person to maintain the Security Register for the Securities
of each series and such Person is referred to herein, with
respect to such series, as the "SECURITY REGISTRAR". Anything
herein to the contrary notwithstanding, the Company may designate
one or more of its offices as an office in which a register with
respect to the Securities of one or more series, or any Tranche
or Tranches thereof, shall be maintained, and the Company may
designate itself the Security Registrar with respect to one or
more of such series. The Security Register shall be open for
inspection by the Trustee and the Company at all reasonable
times.
Except as otherwise specified as contemplated by
Section 301 with respect to the Securities of any series, or any
Tranche thereof, upon surrender for registration of transfer of
any Security of such series or Tranche at the office or agency of
the Company maintained pursuant to Section 502 in a Place of
Payment for such series or Tranche, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new
Securities of the same series and Tranche, of authorized
denominations and of like tenor and aggregate principal amount.
Except as otherwise specified as contemplated by
Section 301 with respect to the Securities of any series, or any
Tranche thereof, any Security of such series or Tranche may be
exchanged at the option of the Holder, for one or more new
Securities of the same series and Tranche, of authorized
denominations and of like tenor and aggregate principal amount,
upon surrender of the Securities to be exchanged at any such
office or agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
All Securities delivered upon any registration of
transfer or exchange of Securities shall be valid obligations of
the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Securities surrendered upon
such registration of transfer or exchange.
Every Security surrendered for registration of
transfer or for exchange shall (if so required by the Company,
the Trustee or the Security Registrar) be duly endorsed or shall
be accompanied by a written instrument of transfer in form sat-
isfactory to the Company, the Trustee or the Security Registrar,
as the case may be, duly executed by the Holder thereof or his
attorney duly authorized in writing.
Unless otherwise specified as contemplated by
Section 301 with respect to Securities of any series, or any
Tranche thereof, no service charge shall be made for any regis-
tration of transfer or exchange of Securities, but the Company
may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 406 or 1106 not involving any
transfer.
The Company shall not be required to execute or to
provide for the registration of transfer of or the exchange of
(a) Securities of any series, or any Tranche thereof, during a
period of fifteen (15) days immediately preceding the date notice
is to be given identifying the serial numbers of the Securities
of such series or Tranche called for redemption or (b) any
Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the
Trustee, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of
the same series and Tranche, and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the
Trustee (a) evidence to their satisfaction of the ownership of
and the destruction, loss or theft of any Security and (b) such
security or indemnity as may be reasonably required by them to
save each of them and any agent of either of them harmless, then,
in the absence of notice to the Company or the Trustee that such
Security is held by a Person purporting to be the owner of such
Security, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or
stolen Security, a new Security of the same series and Tranche,
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
Notwithstanding the foregoing, in case any such
mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, the Company in its discretion
may, but subject to compliance with the foregoing conditions,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this
Section, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to
this Section in lieu of any destroyed, lost or stolen Security
shall constitute an additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security
shall be at any time enforceable by anyone other than the Holder
of such new Security, and any such new Security shall be entitled
to all the benefits of this Indenture equally and proportionately
with any and all other Securities of such series duly issued
hereunder.
The provisions of this Section are exclusive and
shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise specified as contemplated by
Section 301 with respect to the Securities of any series, or any
Tranche thereof, interest on any Security which is payable, and
is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or
one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest.
Any interest on any Security of any series which is
payable, but is not punctually paid or duly provided for, on any
Interest Payment Date, including without limitation interest the
payment period for which has been extended as specified with
respect to such series as contemplated by Section 301 (herein
called "UNPAID INTEREST"), shall forthwith cease to be payable to
the Holder on the related Regular Record Date by virtue of having
been such Holder, and such Unpaid Interest may be paid by the
Company, at its election in each case, as provided in clause (a)
or (b) below:
(a) The Company may elect to make payment
of any Unpaid Interest to the Persons in whose
names the Securities of such series (or their
respective Predecessor Securities) are registered
at the close of business on a date (herein called a
"SPECIAL RECORD DATE") for the payment of such
Unpaid Interest, which shall be fixed in the
following manner. The Company shall notify the
Trustee in writing of the amount of Unpaid Interest
proposed to be paid on each Security of such series
and the date of the proposed payment, and at the
same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such
Unpaid Interest or shall make arrangements satis-
factory to the Trustee for such deposit prior to
the date of the proposed payment, such money when
deposited to be held in trust for the benefit of
the Persons entitled to such Unpaid Interest as in
this clause provided. Thereupon the Trustee shall
fix a Special Record Date for the payment of such
Unpaid Interest which shall be not more than thirty
(30) days and not less than ten (10) days prior to
the date of the proposed payment and not less than
twenty-five (25) days after the receipt by the
Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the
expense of the Company, shall, not less than
fifteen (15) days prior to such Special Record
Date, cause notice of the proposed payment of such
Unpaid Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid,
to each Holder of Securities of such series at the
address of such Holder as it appears in the
Security Register. Notice of the proposed payment
of such Unpaid Interest and the Special Record Date
therefor having been so mailed, such Unpaid
Interest shall be paid to the Persons in whose
names the Securities of such series (or their
respective Predecessor Securities) are registered
at the close of business on such Special Record
Date.
(b) The Company may make payment of any
Unpaid Interest on the Securities of any series in
any other lawful manner not inconsistent with the
requirements of any securities exchange on which
such Securities may be listed, and upon such notice
as may be required by such exchange, if, after
notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by
the Trustee.
Subject to the foregoing provisions of this Section
and Section 305, each Security delivered under this Indenture
upon registration of transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to the due surrender of any Security for
registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name
any Security is registered as the absolute owner of such Security
for the purpose of receiving payment of principal of and premium,
if any, and (subject to Section 307) interest, if any, on such
Security and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
SECTION 309. CANCELLATION BY SECURITY REGISTRAR.
All Securities surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any
Person other than the Security Registrar, be delivered to the
Security Registrar and, if not theretofore canceled, shall be
promptly canceled by the Security Registrar. The Company may at
any time deliver to the Security Registrar for cancellation any
Securities previously authenticated and delivered hereunder which
the Company may have acquired in any manner whatsoever or which
the Company shall not have issued and sold, and all Securities so
delivered shall be promptly canceled by the Security Registrar.
Unless by a Company Order the Company shall direct that canceled
Securities be returned to it, all canceled Securities held by the
Security Registrar shall be disposed of in accordance with the
Security Registrar's customary procedures, and the Security
Registrar shall promptly deliver a certificate of disposition to
the Trustee and the Company. The Security Registrar shall
promptly deliver evidence of any cancellation of a Security in
accordance with this Section 309 to the Trustee and the Company.
SECTION 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by
Section 301 for Securities of any series, or any Tranche thereof,
interest on the Securities of each series shall be computed on
the basis of a three hundred sixty (360) day year consisting of
twelve (12) thirty (30) day months and, with respect to any
period less than a full calendar month, on the basis of the
actual number of days elapsed during such period.
SECTION 311. PAYMENT TO BE IN PROPER CURRENCY.
In the case of the Securities of any series, or any
Tranche thereof, denominated in any currency other than Dollars
or in a composite currency (the "REQUIRED CURRENCY"), except as
otherwise specified with respect to such Securities as
contemplated by Section 301, the obligation of the Company to
make any payment of the principal thereof, or the premium, if
any, or interest, if any, thereon, shall not be discharged or
satisfied by any tender by the Company, or recovery by the
Trustee, in any currency other than the Required Currency, except
to the extent that such tender or recovery shall result in the
Trustee timely holding the full amount of the Required Currency
then due and payable. If any such tender or recovery is in a
currency other than the Required Currency, the Trustee may take
such actions as it considers appropriate to exchange such
currency for the Required Currency. The costs and risks of any
such exchange, including without limitation the risks of delay
and exchange rate fluctuation, shall be borne by the Company, the
Company shall remain fully liable for any shortfall or
delinquency in the full amount of Required Currency then due and
payable, and in no circumstances shall the Trustee be liable
therefor except in the case of its negligence or willful
misconduct.
ARTICLE FOUR
REDEMPTION OF SECURITIES
SECTION 401. APPLICABILITY OF ARTICLE.
Securities of any series, or any Tranche thereof,
which are redeemable before their Stated Maturity shall be
redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities
of such series or Tranche) in accordance with this Article.
SECTION 402. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any
Securities shall be evidenced by a Board Resolution or an
Officer's Certificate. The Company shall, at least forty-five
(45) days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee in writing of such Redemption Date and of the
principal amount of such Securities to be redeemed. In the case
of any redemption of Securities (a) prior to the expiration of
any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture or (b) pursuant to an
election of the Company which is subject to a condition specified
in the terms of such Securities, the Company shall furnish the
Trustee with an Officer's Certificate evidencing compliance with
such restriction or condition.
SECTION 403. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series, or
any Tranche thereof, are to be redeemed, the particular
Securities to be redeemed shall be selected by the Security
Registrar from the Outstanding Securities of such series or
Tranche not previously called for redemption, by such method as
shall be provided for any particular series or Tranche, or, in
the absence of any such provision, by such method of random
selection as the Security Registrar shall deem fair and
appropriate and which may, in any case, provide for the selection
for redemption of portions (in any authorized denomination for
Securities of such series or Tranche) of the principal amount of
Securities of such series or Tranche having a denomination larger
than the minimum authorized denomination for Securities of such
series or Tranche; provided, however, that if, as indicated in an
Officer's Certificate, the Company shall have offered to purchase
all or any principal amount of the Securities then Outstanding of
any series, or any Tranche thereof, and less than all of such
Securities as to which such offer was made shall have been
tendered to the Company for such purchase, the Security
Registrar, if so directed by Company Order, shall select for
redemption all or any principal amount of such Securities which
have not been so tendered.
The Security Registrar shall promptly notify the
Company and the Trustee in writing of the Securities selected for
redemption and, in the case of any Securities selected to be
redeemed in part, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to the
redemption of Securities shall relate, in the case of any
Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been
or is to be redeemed.
SECTION 404. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner
provided in Section 106 to the Holders of the Securities to be
redeemed not less than thirty (30) nor more than sixty (60) days
prior to the Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Securities of any
series or Tranche are to be redeemed, the
identification of the particular Securities to be
redeemed and the portion of the principal amount of
any Security to be redeemed in part,
(d) that on the Redemption Date the
Redemption Price, together with accrued interest,
if any, to the Redemption Date, will become due and
payable upon each such Security to be redeemed and,
if applicable, that interest thereon will cease to
accrue on and after said date,
(e) the place or places where such
Securities are to be surrendered for payment of the
Redemption Price and accrued interest, if any,
unless it shall have been specified as contemplated
by Section 301 with respect to such Securities that
such surrender shall not be required,
(f) that the redemption is for a sinking
or other fund, if such is the case, and
(g) such other matters as the Company
shall deem desirable or appropriate.
With respect to any notice of redemption of
Securities at the election of the Company, unless, upon the
giving of such notice, such Securities shall be deemed to have
been paid in accordance with Section 601, such notice may state
that such redemption shall be conditional upon the receipt by the
Paying Agent or Agents for such Securities, on or prior to the
date fixed for such redemption, of money sufficient to pay the
principal of and premium, if any, and interest, if any, on such
Securities and that if such money shall not have been so received
such notice shall be of no force or effect and the Company shall
not be required to redeem such Securities. In the event that
such notice of redemption contains such a condition and such
money is not so received, the redemption shall not be made and
within a reasonable time thereafter notice shall be given, in the
manner in which the notice of redemption was given, that such
money was not so received and such redemption was not required to
be made, and the Paying Agent or Agents for the Securities
otherwise to have been redeemed shall promptly return to the
Holders thereof any of such Securities which had been surrendered
for payment upon such redemption.
Notice of redemption of Securities to be redeemed
at the election of the Company, and any notice of non-
satisfaction of a condition for redemption as aforesaid, shall be
given by the Company or, upon Company Request, by the Security
Registrar in the name and at the expense of the Company. Notice
of mandatory redemption of Securities shall be given by the
Security Registrar in the name and at the expense of the Company.
SECTION 405. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as
aforesaid, and the conditions, if any, set forth in such notice
having been satisfied, the Securities or portions thereof so to
be redeemed shall, on the Redemption Date, become due and payable
at the Redemption Price therein specified, and from and after
such date (unless, in the case of an unconditional notice of
redemption, the Company shall default in the payment of the
Redemption Price and accrued interest, if any) such Securities or
portions thereof, if interest-bearing, shall cease to bear
interest. Upon surrender of any such Security for redemption in
accordance with such notice, such Security or portion thereof
shall be paid by the Company at the Redemption Price, together
with accrued interest, if any, to the Redemption Date; provided,
however, that no such surrender shall be a condition to such
payment if so specified as contemplated by Section 301 with
respect to such Security; and provided, further, that, except as
otherwise specified as contemplated by Section 301 with respect
to such Security, any installment of interest on any Security the
Stated Maturity of which installment is on or prior to the
Redemption Date shall be payable to the Holder of such Security,
or one or more Predecessor Securities, registered as such at the
close of business on the related Regular Record Date according to
the terms of such Security and subject to the provisions of
Section 307.
SECTION 406. SECURITIES REDEEMED IN PART.
Upon the surrender of any Security which is to be
redeemed only in part at a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the
Company or the Trustee, as the case may be, duly executed by, the
Holder thereof or his attorney duly authorized in writing), the
Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge, a
new Security or Securities of the same series and Tranche, of any
authorized denomination requested by such Holder and of like
tenor and in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so
surrendered.
ARTICLE FIVE
COVENANTS
SECTION 501. PAYMENT OF SECURITIES.
The Company shall pay the principal of and premium,
if any, and interest, if any, on the Securities of each series in
accordance with the terms of such Securities and this Indenture.
SECTION 502. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in each Place of Payment
for the Securities of each series, or any Tranche thereof, an
office or agency where payment of such Securities shall be made,
where the registration of transfer or exchange of such Securities
may be effected and where notices and demands to or upon the
Company in respect of such Securities and this Indenture may be
served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of each
such office or agency and prompt notice to the Holders of any
such change in the manner specified in Section 106. If at any
time the Company shall fail to maintain any such required office
or agency in respect of Securities of any series, or any Tranche
thereof, or shall fail to furnish the Trustee with the address
thereof, payment of such Securities shall be made, registration
of transfer or exchange thereof may be effected and notices and
demands in respect thereof may be served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the
Trustee as its agent for all such purposes in any such event.
The Company may also from time to time designate
one or more other offices or agencies with respect to the
Securities of one or more series, or any Tranche thereof, for any
or all of the foregoing purposes and may from time to time
rescind such designations; provided, however, that, unless
otherwise specified as contemplated by Section 301 with respect
to the Securities of such series or Tranche, no such designation
or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency for such purposes in
each Place of Payment for such Securities in accordance with the
requirements set forth above. The Company shall give prompt
written notice to the Trustee, and prompt notice to the Holders
in the manner specified in Section 106, of any such designation
or rescission and of any change in the location of any such other
office or agency.
Anything herein to the contrary notwithstanding,
any office or agency required by this Section may be maintained
at an office of the Company, in which event the Company shall
perform all functions to be performed at such office or agency.
SECTION 503. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own
Paying Agent with respect to the Securities of any series, or any
Tranche thereof, it shall, on or before each due date of the
principal of and premium, if any, and interest, if any, on any of
such Securities, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the
principal and premium or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided. The Company shall promptly notify the Trustee of any
failure by the Company (or any other obligor on such Securities)
to make any payment of principal of or premium, if any, or
interest, if any, on such Securities.
Whenever the Company shall have one or more Paying
Agents for the Securities of any series, or any Tranche thereof,
it shall, on or before each due date of the principal of and
premium, if any, and interest, if any, on such Securities,
deposit with such Paying Agents sums sufficient (without
duplication) to pay the principal and premium or interest so
becoming due, such sums to be held in trust for the benefit of
the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company shall
promptly notify the Trustee of any failure by it so to act.
The Company shall cause each Paying Agent for the
Securities of any series, or any Tranche thereof, other than the
Company or the Trustee, to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such
Paying Agent shall:
(a) hold all sums held by it for the
payment of the principal of and premium, if any, or
interest, if any, on such Securities in trust for
the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any failure
by the Company (or any other obligor upon such
Securities) to make any payment of principal of or
premium, if any, or interest, if any, on such
Securities; and
(c) at any time during the continuance of
any such failure, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent and furnish to
the Trustee such information as it possesses
regarding the names and addresses of the Persons
entitled to such sums.
The Company may at any time pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Company or such Paying Agent, such sums to
be held by the Trustee upon the same trusts as those upon which
such sums were held by the Company or such Paying Agent and, if
so stated in a Company Order delivered to the Trustee, in
accordance with the provisions of Article Six; and, upon such
payment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of
the principal of and premium, if any, or interest, if any, on any
Security and remaining unclaimed for two years after such
principal and premium, if any, or interest, if any, has become
due and payable shall be paid to the Company on Company Request,
or, if then held by the Company, shall be discharged from such
trust; and, upon such payment or discharge, the Holder of such
Security shall, as an unsecured general creditor and not as the
Holder of an Outstanding Security, look only to the Company for
payment of the amount so due and payable and remaining unpaid,
and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make
any such payment to the Company, may at the expense of the
Company cause to be mailed, on one occasion only, notice to such
Holder that such money remains unclaimed and that, after a date
specified therein, which shall not be less than thirty (30) days
from the date of such mailing, any unclaimed balance of such
money then remaining will be paid to the Company.
SECTION 504. CORPORATE EXISTENCE.
Subject to the rights of the Company under Article
Ten, the Company shall do or cause to be done all things
necessary to preserve and keep its corporate existence in full
force and effect.
SECTION 505. MAINTENANCE OF PROPERTIES.
The Company shall cause (or, with respect to
property owned in common with others, make reasonable effort to
cause) all its properties used or useful in the conduct of its
businesses, considered as a whole, to be maintained and kept in
good condition, repair and working order and shall cause (or,
with respect to property owned in common with others, make
reasonable effort to cause) to be made such repairs, renewals,
replacements, betterments and improvements thereof, as, in the
judgment of the Company, may be necessary in order that the
operation of such properties, considered as a whole, may be
conducted in accordance with common industry practice; provided,
however, that nothing in this Section shall prevent the Company
from discontinuing, or causing the discontinuance of, the
operation and maintenance of any of its properties; and provided,
further, that nothing in this Section shall prevent the Company
from selling, transferring or otherwise disposing of, or causing
the sale, transfer or other disposition of, any of its
properties.
SECTION 506. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to
comply with any term, provision or condition set forth in
(a) any covenant or restriction specified
with respect to the Securities of any one or more
series, or any Tranche or Tranches thereof, as
contemplated by Section 301 if before the time for
such compliance the Holders of a majority in
aggregate principal amount of the Outstanding
Securities of all series and Tranches with respect
to which compliance with such covenant or
restriction is to be omitted, considered as one
class, shall, by Act of such Holders, either waive
such compliance in such instance or generally waive
compliance with such term, provision or condition;
provided, however, that no such waiver shall be
effective as to any matters contemplated in clause
(a), (b) or (c) in Section 1102 without consent of
the Holders specified in such Section; and
(b) Section 504 or 505 or Article Ten if
before the time for such compliance the Holders of
a majority in principal amount of Securities
Outstanding under this Indenture shall, by Act of
such Holders, either waive such compliance in such
instance or generally waive compliance with such
term, provision or condition;
but, in either case, no such waiver shall extend to or affect
such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective,
the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in
full force and effect.
SECTION 507. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
Not later than December 1 in each year, commencing
December 1, 1998, the Company shall deliver to the Trustee an
Officer's Certificate which need not comply with Section 102,
executed by the principal executive officer, the principal
financial officer or the principal accounting officer of the
Company, as to such officer's knowledge of the Company's
compliance with all conditions and covenants under this
Indenture, such compliance to be determined without regard to any
period of grace or requirement of notice under this Indenture.
ARTICLE SIX
SATISFACTION AND DISCHARGE
SECTION 601. SATISFACTION AND DISCHARGE OF SECURITIES.
Any Security or Securities, or any portion of the
principal amount thereof, shall be deemed to have been paid for
all purposes of this Indenture, and the entire indebtedness of
the Company in respect thereof shall be satisfied and discharged,
if there shall have been irrevocably deposited with the Trustee
or any Paying Agent (other than the Company), in trust:
(a) money in an amount which shall be
sufficient, or
(b) in the case of a deposit made prior to
the Maturity of such Securities or
portions thereof, Eligible
Obligations, which shall not contain
provisions permitting the redemption
or other prepayment thereof at the
option of the issuer thereof, the
principal of and the interest on which
when due, without any regard to
reinvestment thereof, will provide
moneys which, together with the money,
if any, deposited with or held by the
Trustee or such Paying Agent, shall be
sufficient, or
(c) a combination of (a) or (b) which
shall be sufficient,
to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such Securities or
portions thereof; provided, however, that in the case of the
provision for payment or redemption of less than all the
Securities of any series or Tranche, such Securities or portions
thereof shall have been selected by the Security Registrar as
provided herein and, in the case of a redemption, the notice
requisite to the validity of such redemption shall have been
given or irrevocable authority shall have been given by the
Company to the Trustee to give such notice, under arrangements
satisfactory to the Trustee; and provided, further, that the
Company shall have delivered to the Trustee and such Paying
Agent:
(x) if such deposit shall have been made
prior to the Maturity of such Securities, a Company
Order stating that the money and Eligible
Obligations deposited in accordance with this
Section shall be held in trust, as provided in
Section 603;
(y) if Eligible Obligations shall have
been deposited, an Opinion of Counsel to the effect
that such obligations constitute Eligible
Obligations and do not contain provisions
permitting the redemption or other prepayment
thereof at the option of the issuer thereof, and an
opinion of an independent public accountant of
nationally recognized standing, selected by the
Company, to the effect that the other requirements
set forth in clause (b) and, if applicable, (c)
above have been satisfied; and
(z) if such deposit shall have been made prior
to the Maturity of such Securities, an Officer's
Certificate stating the Company's intention that,
upon delivery of such Officer's Certificate, its
indebtedness in respect of such Securities or
portions thereof will have been satisfied and
discharged as contemplated in this Section.
Upon the deposit of money or Eligible Obligations,
or both, in accordance with this Section, together with the
documents required by clauses (x), (y) and (z) above, the Trustee
shall, upon Company Request, acknowledge in writing that such
Securities or portions thereof are deemed to have been paid for
all purposes of this Indenture and that the entire indebtedness
of the Company in respect thereof has been satisfied and
discharged as contemplated in this Section. In the event that
all of the conditions set forth in the preceding paragraph shall
have been satisfied in respect of any Securities or portions
thereof except that, for any reason, the Officer's Certificate
specified in clause (z) (if otherwise required) shall not have
been delivered, such Securities or portions thereof shall
nevertheless be deemed to have been paid for all purposes of this
Indenture, and the Holders of such Securities or portions thereof
shall nevertheless be no longer entitled to the benefits provided
by this Indenture or of any of the covenants of the Company under
Article Five (except the covenants contained in Sections 502 and
503) or any other covenants made in respect of such Securities or
portions thereof as contemplated by Section 301, but the
indebtedness of the Company in respect of such Securities or
portions thereof shall not be deemed to have been satisfied and
discharged prior to Maturity for any other purpose; and, upon
Company Request, the Trustee shall acknowledge in writing that
such Securities or portions thereof are deemed to have been paid
for all purposes of this Indenture.
If payment at Stated Maturity of less than all of
the Securities of any series, or any Tranche thereof, is to be
provided for in the manner and with the effect provided in this
Section, the Security Registrar shall select such Securities, or
portions of principal amount thereof, in the manner specified by
Section 403 for selection for redemption of less than all the
Securities of a series or Tranche.
In the event that Securities which shall be deemed
to have been paid for purposes of this Indenture, and, if such is
the case, in respect of which the Company's indebtedness shall
have been satisfied and discharged, all as provided in this
Section, do not mature and are not to be redeemed within the
sixty (60) day period commencing with the date of the deposit of
moneys or Eligible Obligations, as aforesaid, the Company shall,
as promptly as practicable, give a notice, in the same manner as
a notice of redemption with respect to such Securities, to the
Holders of such Securities to the effect that such deposit has
been made and the effect thereof.
Notwithstanding that any Securities shall be deemed
to have been paid for purposes of this Indenture, as aforesaid,
the obligations of the Company and the Trustee in respect of such
Securities under Sections 304, 305, 306, 404, 502, 503, 807 and
814 and this Article shall survive.
The Company shall pay, and shall indemnify the
Trustee or any Paying Agent with which Eligible Obligations shall
have been deposited as provided in this Section against, any tax,
fee or other charge imposed on or assessed against such Eligible
Obligations or the principal or interest received in respect of
such Eligible Obligations, including, but not limited to, any
such tax payable by any entity deemed, for tax purposes, to have
been created as a result of such deposit.
Anything herein to the contrary notwithstanding,
(a) if, at any time after a Security would be deemed to have been
paid for purposes of this Indenture, and, if such is the case,
the Company's indebtedness in respect thereof would be deemed to
have been satisfied and discharged, pursuant to this Section
(without regard to the provisions of this paragraph), the Trustee
or any Paying Agent, as the case may be, (i) shall be required to
return the money or Eligible Obligations, or combination thereof,
deposited with it as aforesaid to the Company or its
representative under any applicable Federal or State bankruptcy,
insolvency or other similar law or (ii) are unable to apply any
money held by the Trustee as provided in this Section and Section
603 with respect to such Security by reason of any order or
judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, such
Security shall thereupon be deemed retroactively not to have been
paid and any satisfaction and discharge of the Company's
indebtedness in respect thereof shall retroactively be deemed not
to have been effected, and such Security shall be deemed to
remain Outstanding and (b) any satisfaction and discharge of the
Company's indebtedness in respect of any Security shall be
subject to the provisions of the last paragraph of Section 503.
SECTION 602. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to
be of further effect (except as hereinafter expressly provided),
and the Trustee, at the expense of the Company, shall execute
such instruments as the Company shall reasonably request to
evidence and acknowledge the satisfaction and discharge of this
Indenture, when:
(a) no Securities remain Outstanding
hereunder; and
(b) the Company has paid or caused to be
paid all other sums payable hereunder by the
Company;
provided, however, that if, in accordance with the last paragraph
of Section 601, any Security, previously deemed to have been paid
for purposes of this Indenture, shall be deemed retroactively not
to have been so paid, this Indenture shall thereupon be deemed
retroactively not to have been satisfied and discharged, as
aforesaid, and to remain in full force and effect, and the
Company shall execute and deliver such instruments as the Trustee
shall reasonably request to evidence and acknowledge the same.
Notwithstanding the satisfaction and discharge of
this Indenture as aforesaid, the obligations of the Company and
the Trustee under Sections 304, 305, 306, 404, 502, 503, 807 and
814 and this Article shall survive.
Upon satisfaction and discharge of this Indenture
as provided in this Section, the Trustee shall turn over to the
Company any and all money, securities and other property then
held by the Trustee for the benefit of the Holders of the
Securities (other than money and Eligible Obligations held by the
Trustee pursuant to Section 603) and shall execute and deliver to
the Company such instruments as, in the judgment of the Company,
shall be necessary, desirable or appropriate to effect or
evidence the satisfaction and discharge of this Indenture.
SECTION 603. APPLICATION OF TRUST MONEY.
Neither the Eligible Obligations nor the money
deposited pursuant to Section 601, nor the principal or interest
payments on any such Eligible Obligations, shall be withdrawn or
used for any purpose other than, and shall be held in trust for,
the payment of the principal of and premium, if any, and inter-
est, if any, on the Securities or portions of principal amount
thereof in respect of which such deposit was made, all subject,
however, to the provisions of Section 503; provided, however,
that any cash received from such principal or interest payments
on such Eligible Obligations, if not then needed for such pur-
pose, shall, to the extent practicable and upon Company Request
and delivery to the Trustee of the documents referred to in
clause (y) in the first paragraph of Section 601, be invested in
Eligible Obligations of the type described in clause (b) in the
first paragraph of Section 601 maturing at such times and in such
amounts as shall be sufficient, together with any other moneys
and the proceeds of any other Eligible Obligations then held by
the Trustee, to pay when due the principal of and premium, if
any, and interest, if any, due and to become due on such
Securities or portions thereof on and prior to the Maturity
thereof, and interest earned from such reinvestment shall be paid
over to the Company as received, free and clear of any trust,
lien or pledge under this Indenture; and provided, further, that
any moneys held in accordance with this Section on the Maturity
of all such Securities in excess of the amount required to pay
the principal of and premium, if any, and interest, if any, then
due on such Securities shall be paid over to the Company free and
clear of any trust, lien or pledge under this Indenture; and
provided, further, that if an Event of Default shall have
occurred and be continuing, moneys to be paid over to the Company
pursuant to this Section shall be held until such Event of
Default shall have been waived or cured.
ARTICLE SEVEN
EVENTS OF DEFAULT; REMEDIES
SECTION 701. EVENTS OF DEFAULT.
"EVENT OF DEFAULT", wherever used herein with
respect to the Securities of any series, means any of the
following events which shall have occurred and be continuing:
(a) failure to pay interest, if any, on
any Security of such series within sixty (60) days after the
same becomes due and payable; provided, however, that no
such failure shall constitute an "Event of Default" if the
Company shall have made a valid extension of the interest
payment period with respect to the Securities of such series
if so provided with respect to such series as contemplated
by Section 301; or
(b) failure to pay the principal of or
premium, if any, on any Security of such series within three
(3) Business Days after its Maturity; provided, however,
that no such failure shall constitute an "Event of Default"
if the Company shall have made a valid extension of the
Maturity of the Securities of such series if so provided
with respect to such series as contemplated by Section 301;
or
(c) failure to perform or breach of any
covenant or warranty of the Company in this Indenture (other
than a covenant or warranty a default in the performance of
which or breach of which is elsewhere in this Section
specifically dealt with or which has expressly been included
in this Indenture solely for the benefit of one or more
series of Securities other than such series) for a period of
ninety (90) days after there has been given, by registered
or certified mail, to the Company by the Trustee, or to the
Company and the Trustee by the Holders of at least twenty-
five per centum (25%) in principal amount of the Outstanding
Securities of such series, a written notice specifying such
default or breach and requiring it to be remedied and
stating that such notice is a "NOTICE OF DEFAULT" hereunder,
unless the Trustee, or the Trustee and the Holders of a
principal amount of Securities of such series not less than
the principal amount of Securities the Holders of which gave
such notice, as the case may be, shall agree in writing to
an extension of such period prior to its expiration;
provided, however, that the Trustee, or the Trustee and the
Holders of such principal amount of Securities of such
series, as the case may be, shall be deemed to have agreed
to an extension of such period if corrective action is
initiated by the Company within such period and is being
diligently pursued; or
(d) a default under any bond, debenture,
note or other evidence of indebtedness for money borrowed by
the Company (including a default with respect to Securities
of any series other than such series) or under any mortgage,
indenture or other instrument under which there may be
issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Company (including
this Indenture), whether such indebtedness now exists or
shall hereafter be created, which default (1) shall
constitute a failure to make any payment in excess of
$5,000,000 of the principal of or interest on such
indebtedness when due and payable after the expiration of
any applicable grace period with respect thereto or (2)
shall have resulted in such indebtedness in an amount in
excess of $10,000,000 becoming or being declared due and
payable prior to the date on which it would otherwise have
become due and payable, without such payment having been
made, such indebtedness having been discharged, or such
acceleration having been rescinded or annulled, as the case
may be, within a period of ninety (90) days after there
shall have been given, by registered or certified mail, to
the Company by the Trustee or to the Company and the Trustee
by the Holders of at least twenty-five per centum (25%) in
principal amount of the Outstanding Securities of such
series a written notice specifying such default and
requiring the Company to cause such payment to be made, such
indebtedness to be discharged or such acceleration to be
rescinded or annulled, as the case may be, and stating that
such notice is a Notice of Default hereunder; or
(e) the entry by a court having
jurisdiction in the premises of (i) a decree or order for
relief in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (ii) a
decree or order adjudging the Company a bankrupt or in-
solvent, or approving as properly filed a petition by one or
more Persons other than the Company seeking reorganization,
arrangement, adjustment or composition of or in respect of
the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official for the
Company or for any substantial part of its property, or
ordering the winding-up or liquidation of its affairs, and
any such decree or order for relief or any such other decree
or order shall have remained unstayed and in effect for a
period of ninety (90) consecutive days; or
(f) the commencement by the Company of a
voluntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it to
the entry of a decree or order for relief in respect of the
Company in a case or proceeding under any applicable Federal
or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by
it of a petition or answer or consent seeking reorganization
or relief under any applicable Federal or State law, or the
consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company or of any substantial part
of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing
of its inability to pay its debts generally as they become
due, or the authorization of such action by the Board of
Directors.
SECTION 702. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default shall have occurred and be
continuing with respect to Securities of any series at the time
Outstanding, then in every such case the Trustee or the Holders
of not less than thirty-three per centum (33%) in principal
amount of the Outstanding Securities of such series may declare
the principal amount (or, if any of the Securities of such series
are Discount Securities, such portion of the principal amount of
such Securities as may be specified in the terms thereof as
contemplated by Section 301) of all of the Outstanding Securities
of such series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders),
and upon such declaration such principal amount (or specified
amount), together with premium, if any, and accrued interest, if
any, thereon, shall become immediately due and payable; provided,
however, that if an Event of Default shall have occurred and be
continuing with respect to more than one series of Securities,
the Trustee or the Holders of not less than thirty-three per
centum (33%) in aggregate principal amount of the Outstanding
Securities of all such series, considered as one class, may make
such declaration of acceleration, and not the Holders of the
Securities of any one of such series.
At any time after such a declaration of
acceleration with respect to Securities of any series shall have
been made, but before a judgment or decree for payment of the
money due shall have been obtained by the Trustee as provided in
this Article, such declaration and its consequences shall,
without further act, be deemed to have been rescinded and
annulled, if
(a) the Company shall have paid or
deposited with the Trustee a sum sufficient to pay
(i) all overdue interest, if any, on all
Securities of such series then Outstanding;
(ii) the principal of and premium, if any, on
any Securities of such series then Outstanding
which have become due otherwise than by such
declaration of acceleration and interest thereon
at the rate or rates prescribed therefor in such
Securities;
(iii) interest upon overdue interest at the
rate or rates prescribed therefor in such
Securities, to the extent that payment of such
interest is lawful; and
(iv) all amounts due to the Trustee under
Section 807; and
(b) all Events of Default with respect to
Securities of such series, other than the non-
payment of the principal of Securities of such
series which shall have become due solely by such
declaration of acceleration, shall have been cured
or waived as provided in Section 713.
No such rescission shall affect any subsequent Event of Default
or impair any right consequent thereon.
SECTION 703. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE.
If an Event of Default described in clause (a) or
(b) of Section 701 shall have occurred and be continuing, the
Company shall, upon demand of the Trustee, pay to it, for the
benefit of the Holders of the Securities of the series with
respect to which such Event of Default shall have occurred, the
whole amount then due and payable on such Securities for princi-
pal and premium, if any, and interest, if any, and, in addition
thereto, such further amount as shall be sufficient to cover any
amounts due to the Trustee under Section 807.
If the Company shall fail to pay such amounts
forthwith upon such demand, the Trustee, in its own name and as
trustee of an express trust, may institute a judicial proceeding
for the collection of the sums so due and unpaid, may prosecute
such proceeding to judgment or final decree and may enforce the
same against the Company or any other obligor upon such
Securities and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the
Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities
of any series shall have occurred and be continuing, the Trustee
may in its discretion proceed to protect and enforce its rights
and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether
for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.
SECTION 704. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this
Article shall be applied in the following order, to the extent
permitted by law, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal
or premium, if any, or interest, if any, upon presentation of the
Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the
Trustee under Section 807;
SECOND: To the payment of the whole amount then
due and unpaid upon the Outstanding Securities for principal
and premium, if any, and interest, if any, in respect of
which or for the benefit of which such money has been
collected; and in case such proceeds shall be insufficient
to pay in full the whole amount so due and unpaid upon such
Securities, then to the payment of such principal and
interest, if any, thereon without any preference or
priority, ratably according to the aggregate amount so due
and unpaid, with any balance then remaining to the payment
of premium, if any, and, if so specified as contemplated by
Section 301 with respect to the Securities of any series, or
any Tranche thereof, interest, if any, on overdue premium,
if any, and overdue interest, if any, ratably as aforesaid,
all to the extent permitted by applicable law;
THIRD: To the payment of the remainder, if any,
to the Company or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may
direct.
SECTION 705. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the
property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of
the Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment
of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the
whole amount of principal, premium, if any, and interest, if
any, owing and unpaid in respect of the Securities and to
file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee
(including any claim for amounts due to the Trustee under
Section 807) and of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or
other property payable or deliverable on any such claims and
to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders,
to pay to the Trustee any amounts due it under Section 807.
Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee
to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 706. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this
Indenture or on the Securities may be prosecuted and enforced by
the Trustee without the possession of any of the Securities or
the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of
the Holders in respect of which such judgment has been recovered.
SECTION 707. LIMITATION ON SUITS.
No Holder shall have any right to institute any
proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:
(a) such Holder shall have previously
given written notice to the Trustee of a continuing Event of
Default with respect to the Securities of such series;
(b) the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all series
in respect of which an Event of Default shall have occurred
and be continuing, considered as one class, shall have made
written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee
hereunder;
(c) such Holder or Holders shall have
offered to the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in compliance
with such request;
(d) the Trustee for sixty (60) days after
its receipt of such notice, request and offer of indemnity
shall have failed to institute any such proceeding; and
(e) no direction inconsistent with such
written request shall have been given to the Trustee during
such sixty (60) day period by the Holders of a majority in
aggregate principal amount of the Outstanding Securities of
all series in respect of which an Event of Default shall
have occurred and be continuing, considered as one class.
it being understood and intended that no one or more of the
Holders of Securities of any series shall have any right in any
manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any
other of the Holders of Securities of such series or to obtain or
to seek to obtain priority or preference over any other Holders
of Securities of such series or to enforce any right under this
Indenture, except in the manner herein provided and for the equal
and ratable benefit of all Holders of Securities of such series.
SECTION 708. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM AND INTEREST.
Notwithstanding any other provision in this
Indenture, the Holder of any Security shall have the right, which
is absolute and unconditional, to receive payment of the
principal of and premium, if any, and (subject to Section 307)
interest, if any, on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemp-
tion, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be
impaired without the consent of such Holder.
SECTION 709. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture
and such proceeding shall have been discontinued or abandoned for
any reason, or shall have been determined adversely to the
Trustee or to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company, the Trustee
and such Holder shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and
remedies of the Trustee and such Holder shall continue as though
no such proceeding had been instituted.
SECTION 710. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph
of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 711. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any
Holder to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the
Trustee or to the Holders may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 712. CONTROL BY HOLDERS OF SECURITIES.
If an Event of Default shall have occurred and be
continuing in respect of a series of Securities, the Holders of a
majority in principal amount of the Outstanding Securities of
such series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the
Trustee with respect to the Securities of such series; provided,
however, that if an Event of Default shall have occurred and be
continuing with respect to more than one series of Securities,
the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all such series, considered as one
class, shall have the right to make such direction, and not the
Holders of the Securities of any one of such series; and
provided, further, that
(a) such direction shall not be in
conflict with any rule of law or with this Indenture, and
could not involve the Trustee in personal liability in
circumstances where indemnity would not, in the Trustee's
sole discretion, be adequate, and
(b) the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with
such direction.
SECTION 713. WAIVER OF PAST DEFAULTS.
The Holders of a majority in principal amount of
the Outstanding Securities of any series may on behalf of the
Holders of all the Securities of such series waive any past
default with respect to such series hereunder and its
consequences, except a default
(a) in the payment of the principal of or
premium, if any, or interest, if any, on any Security of
such series, or
(b) in respect of a covenant or provision
hereof which under Section 1102 cannot be modified or
amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to
exist, and any and all Events of Default arising therefrom shall
be deemed to have been cured, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 714. UNDERTAKING FOR COSTS.
The Company and the Trustee agree, and each Holder
by its acceptance of a Security shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in
any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant
in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant, all in the
manner, to the extent and except as provided in the Trust
Indenture Act; but the provisions of this Section shall not apply
to any suit instituted by the Company, to any suit instituted by
the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than ten per centum (10%)
in aggregate principal amount of the Outstanding Securities of
all series in respect of which such suit may be brought,
considered as one class, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of or
premium, if any, or interest, if any, on any Security on or after
the Stated Maturity or Maturities expressed in such Security (or,
in the case of redemption, on or after the Redemption Date).
SECTION 715. WAIVER OF STAY OR EXTENSION LAWS.
To the full extent that it may lawfully so agree,
the Company shall not at any time set up, claim or otherwise seek
to take the benefit or advantage of any stay or extension law,
now or hereafter in effect, in order to prevent or hinder the
enforcement of this Indenture; and the Company, for itself and
all who may claim under it, so far as it or they now or hereafter
may lawfully do so, hereby waives the benefit of all such laws.
ARTICLE EIGHT
THE TRUSTEE
SECTION 801. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an
Event of Default with respect to Securities of any series,
(i) the Trustee undertakes to perform,
with respect to Securities of such series, such
duties and only such duties as are specifically set
forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its
part, the Trustee may, with respect to Securities
of such series, conclusively rely, as to the truth
of the statements and the correctness of the
opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but in the case
of any such certificates or opinions which by any
provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine
whether or not they conform to the requirements of
this Indenture.
(b) In case an Event of Default with
respect to Securities of any series shall have occurred and be
continuing, the Trustee shall exercise, with respect to
Securities of such series, such of the rights and powers vested
in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall
be construed to relieve the Trustee from liability for its own
negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) this subsection shall not be construed
to limit the effect of subsection (a) of this
Section;
(ii) the Trustee shall not be liable for
any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that
the Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Trustee shall not be liable with
respect to any action taken or omitted to be taken
by it in good faith in accordance with the
direction of the Holders of a majority in principal
amount of the Outstanding Securities of any one or
more series, as provided herein, relating to the
time, method and place of conducting any proceeding
for any remedy available to the Trustee, or
exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the
Securities of such series; and
(iv) no provision of this Indenture shall
require the Trustee to expend or risk its own funds
or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity
against such risk or liability is not reasonably
assured to it.
(d) Whether or not therein expressly so
provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to
the Trustee shall be subject to the provisions of this Section.
SECTION 802. NOTICE OF DEFAULTS.
The Trustee shall give notice of any default
hereunder with respect to the Securities of any series to the
Holders of Securities of such series in the manner and to the
extent required to do so by the Trust Indenture Act, unless such
default shall have been cured or waived; provided, however, that
in the case of any default of the character specified in Section
701(c), no such notice to Holders shall be given until at least
seventy-five (75) days after the occurrence thereof; and
provided, further, that, subject to the provisions of Section
801, the Trustee shall not be deemed to have knowledge of such
default unless either (i) a Responsible Officer of the Trustee
shall have actual knowledge of such default or (ii) the Trustee
shall have received written notice thereof from the Company or
any Holder or, in the case of a default described in Section
701(d), from the holder of any indebtedness or from the trustee
under any mortgage, indenture or other instrument referred to in
such Section. For the purpose of this Section, the term
"DEFAULT" means any event which is, or after notice or lapse of
time, or both, would become, an Event of Default with respect to
the Securities of such series.
SECTION 803. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 801 and to the
applicable provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or
parties;
(b) any request, direction or act of the
Company mentioned herein shall be sufficiently evidenced by
a Company Request or Company Order, or as otherwise
expressly provided herein, and any resolution of the Board
of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this
Indenture the Trustee shall deem it desirable that a matter
be proved or established prior to taking, suffering or omit-
ting any action hereunder, the Trustee (unless other
evidence is specifically prescribed herein) may, in the
absence of bad faith on its part, rely upon an Officer's
Certificate;
(d) the Trustee may consult with counsel
and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no
obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any
Holder pursuant to this Indenture, unless such Holder shall
have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be
incurred by it complying with such request or direction;
(f) the Trustee shall not be bound to make
any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it
shall (subject to applicable legal requirements) be entitled
to examine, during normal business hours, the books, records
and premises of the Company, personally or by agent or
attorney;
(g) the Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed
with due care by it hereunder; and
(h) the Trustee shall not be charged with
knowledge of any Event of Default with respect to the
Securities of any series for which it is acting as Trustee
unless either (i) a Responsible Officer of the Trustee shall
have actual knowledge of the Event of Default or (ii)
written notice of such Event of Default shall have been
given to the Trustee by the Company, any other obligor on
such Securities or by any Holder of such Securities or, in
the case of a default described in Section 701(d), from the
holder of any indebtedness or from the trustee under any
mortgage, indenture or other instrument referred to in such
Section.
SECTION 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
The recitals contained herein and in the Securities
(except the Trustee's certificates of authentication) shall be
taken as the statements of the Company, and neither the Trustee
nor any Authenticating Agent assumes any responsibility for their
correctness. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of
Securities or the proceeds thereof.
SECTION 805. MAY HOLD SECURITIES.
Each of the Trustee, any Authenticating Agent, any
Paying Agent, any Security Registrar or any other agent of the
Company or the Trustee, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to
Sections 808 and 813, may otherwise deal with the Company with
the same rights it would have if it were not such Trustee,
Authenticating Agent, Paying Agent, Security Registrar or other
agent.
SECTION 806. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need
not be segregated from other funds, except to the extent required
by law. The Trustee shall be under no liability for interest on
or investment of any money received by it hereunder except as
expressly provided herein or otherwise agreed with, and for the
sole benefit of, the Company.
SECTION 807. COMPENSATION AND REIMBURSEMENT.
The Company shall
(a) pay to the Trustee from time to time
reasonable compensation for all services rendered by it
hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee
of an express trust);
(b) except as otherwise expressly provided
herein, reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances reasonably
incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its
agents and counsel), except to the extent that any such
expense, disbursement or advance may be attributable to its
negligence, wilful misconduct or bad faith; and
(c) indemnify the Trustee and hold it
harmless from and against any loss, liability or expense
reasonably incurred by it arising out of or in connection
with the acceptance or administration of the trust or trusts
hereunder or the performance of its duties hereunder,
including the reasonable costs and expenses of defending
itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence, wilful
misconduct or bad faith.
As security for the performance of the obligations
of the Company under this Section, the Trustee shall have a lien
prior to the Securities upon all property and funds held or
collected by the Trustee as such other than property and funds
held in trust under Section 603 (except moneys payable to the
Company as provided in Section 603). "TRUSTEE" for purposes of
this Section shall include any predecessor Trustee; provided,
however, that the negligence, wilful misconduct or bad faith of
any Trustee hereunder shall not affect the rights of any other
Trustee hereunder.
SECTION 808. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee shall have or acquire any con-
flicting interest within the meaning of the Trust Indenture Act,
it shall either eliminate such conflicting interest or resign to
the extent, in the manner and with the effect, and subject to the
conditions, provided in the Trust Indenture Act and this
Indenture. For purposes of Section 310(b)(1) of the Trust
Indenture Act and to the extent permitted thereby, the Trustee,
in its capacity as trustee in respect of the Securities of any
series, shall not be deemed to have a conflicting interest
arising from its capacity as trustee in respect of the Securities
of any other series. For purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act,
the Indenture, dated as of July 1, 1988, between the Company and
The Chase Manhattan Bank (formerly known as Chemical Bank),
trustee, shall be deemed to be specifically described herein.
SECTION 809. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder
which shall be
(a) a corporation organized and doing
business under the laws of the United States, any State or
Territory thereof or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least Fifty Million
Dollars ($50,000,000) and subject to supervision or
examination by Federal, State, Territorial or District of
Columbia authority, or
(b) if and to the extent permitted by the
Commission by rule, regulation or order upon application, a
corporation or other Person organized and doing business
under the laws of a foreign government, authorized under
such laws to exercise corporate trust powers, having a
combined capital and surplus of at least Fifty Million
Dollars ($50,000,000) or the Dollar equivalent of the
applicable foreign currency and subject to supervision or
examination by authority of such foreign government or a
political subdivision thereof substantially equivalent to
supervision or examination applicable to United States
institutional trustees,
and, in either case, qualified and eligible under this Article
and the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section or the Trust
Indenture Act, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 810. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the
Trustee and no appointment of a successor Trustee pursuant to
this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the
applicable requirements of Section 811.
(b) The Trustee may resign at any time
with respect to the Securities of one or more series by giving
written notice thereof to the Company. If the instrument of
acceptance by a successor Trustee required by Section 811 shall
not have been delivered to the Trustee within thirty (30) days
after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities
of such series.
(c) The Trustee may be removed at any time with
respect to the Securities of any series by Act of the Holders of
a majority in principal amount of the Outstanding Securities of
such series delivered to the Trustee and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with
Section 808 after written request therefor by the
Company or by any Holder who has been a bona fide
Holder for at least six months, or
(ii) the Trustee shall cease to be eligible
under Section 809 or Section 310(a) of the Trust
Indenture Act and shall fail to resign after
written request therefor by the Company or by any
such Holder, or
(iii) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent
or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take
charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (x) the Company by a Board Resolution may
remove the Trustee with respect to all Securities or (y) subject
to Section 714, any Holder who has been a bona fide Holder for at
least six (6) months may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the
office of Trustee for any cause (other than as contemplated in
clause (y) in subsection (d) of this Section), with respect to
the Securities of one or more series, the Company, by a Board
Resolution, shall take prompt steps to appoint a successor
Trustee or Trustees with respect to the Securities of that or
those series (it being understood that any such successor Trustee
may be appointed with respect to the Securities of one or more or
all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any particular series)
and shall comply with the applicable requirements of Section 811.
If, within one (1) year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor
Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of
Section 811, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 811, any Holder who
has been a bona fide Holder of a Security of such series for at
least six (6) months may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee with respect to the
Securities of such series.
(f) So long as no event which is, or after notice
or lapse of time, or both, would become, an Event of Default
shall have occurred and be continuing, if the Company shall have
delivered to the Trustee with respect to the Securities of one or
more series (i) a Board Resolution appointing a successor Trustee
or Trustees with respect to that or those series, effective as of
a date specified therein, and (ii) an instrument of acceptance of
such appointment, effective as of such date, by such successor
Trustee or Trustees in accordance with Section 811, the Trustee
or Trustees with respect to that or those series shall be deemed
to have resigned as contemplated in subsection (b) of this
Section, the successor Trustee or Trustees shall be deemed to
have been appointed pursuant to subsection (e) of this Section
and such appointment shall be deemed to have been accepted as
contemplated in Section 811, all as of such date, and all other
provisions of this Section and Section 811 shall be applicable to
such resignation, appointment and acceptance except to the extent
inconsistent with this subsection (f).
(g) The Company shall give notice of each
resignation and each removal of the Trustee with respect to the
Securities of any series and each appointment of a successor
Trustee with respect to the Securities of any series to all
Holders of Securities of such series. Each notice shall include
the name of the successor Trustee with respect to the Securities
of such series and the address of its corporate trust office.
SECTION 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder
of a successor Trustee with respect to the Securities of all
series, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act,
shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall,
upon payment of all sums owed to it, execute and deliver an
instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder
of a successor Trustee with respect to the Securities of one or
more (but not all) series, the Company, the retiring Trustee and
each successor Trustee with respect to the Securities of such
series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and
which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of
the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee
relates, (2) if the retiring Trustee is not retiring with respect
to all Securities, shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the
retiring Trustee and (3) shall add to or change any of the provi-
sions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in
such supplemental indenture shall constitute such Trustees co-
trustees of the same trust and that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such
Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each
such successor Trustee, without any further act, shall become
vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those
series to which the appointment of such successor Trustee
relates; but, on request of the Company or any successor Trustee,
such retiring Trustee, upon payment of all sums owed to it, shall
duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the
appointment of such successor Trustee relates.
(c) Upon reasonable request of any such
successor Trustee, the Company shall execute instruments to more
fully and certainly vest in and confirm to such successor Trustee
all rights, powers and trusts referred to in subsection (a) or
(b) of this Section, as the case may be.
(d) No successor Trustee shall accept its
appointment unless at the time of such acceptance such successor
Trustee shall be qualified and eligible under this Article.
SECTION 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution
or filing of any paper or any further act on the part of any of
the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver
the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 813. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If the Trustee shall be or become a creditor of the
Company or any other obligor upon the Securities (other than by
reason of a relationship described in Section 311(b) of the Trust
Indenture Act), the Trustee shall be subject to any and all
applicable provisions of the Trust Indenture Act regarding the
collection of claims against the Company or such other obligor.
For purposes of Section 311(b) of the Trust Indenture Act:
(a) the term "CASH TRANSACTION" means any
transaction in which full payment for goods or securities
sold is made within seven days after delivery of the goods
or securities in currency or in checks or other orders drawn
upon banks or bankers and payable upon demand; and
(b) the term "SELF-LIQUIDATING PAPER"
means any draft, bill of exchange, acceptance or obligation
which is made, drawn, negotiated or incurred by the Company
or such obligor for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of
goods, wares or merchandise and which is secured by
documents evidencing title to, possession of, or a lien
upon, the goods, wares or merchandise or the receivables or
proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided
the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the Company
or such obligor arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange,
acceptance or obligation.
SECTION 814. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or
Agents with respect to the Securities of one or more series, or
any Tranche thereof, which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series or
Tranche issued upon original issuance, exchange, registration of
transfer or partial redemption thereof or pursuant to Section
306, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the
Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation
organized and doing business under the laws of the United States,
any State or Territory thereof or the District of Columbia or the
Commonwealth of Puerto Rico, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of
not less than Fifty Million Dollars ($50,000,000) and subject to
supervision or examination by Federal or State authority. If
such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating
Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and
with the effect specified in this Section.
Any corporation into which an Authenticating Agent
may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a
party, or any corporation succeeding to all or substantially all
of the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating
Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper
or any further act on the part of the Trustee or the
Authenticating Agent.
An Authenticating Agent may resign at any time by
giving written notice thereof to the Trustee and to the Company.
The Trustee may at any time terminate the agency of an
Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at
any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be
acceptable to the Company. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested
with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating
Agent from time to time reasonable compensation for its services
under this Section.
The provisions of Sections 308, 804 and 805 shall
be applicable to each Authenticating Agent.
If an appointment with respect to the Securities of
one or more series, or any Tranche thereof, shall be made
pursuant to this Section, the Securities of such series or
Tranche may have endorsed thereon, in addition to the Trustee's
certificate of authentication, an alternate certificate of
authentication substantially in the following form:
This is one of the Securities of the series
designated therein referred to in the within-mentioned Indenture.
--------------------------------
As Trustee
By
------------------------------
As Authenticating Agent
By
------------------------------
Authorized Officer
If all of the Securities of a series may not be
originally issued at one time, and if the Trustee does not have
an office capable of authenticating Securities upon original
issuance located in a Place of Payment where the Company wishes
to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested by the Company in writing
(which writing need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel), shall appoint, in
accordance with this Section and in accordance with such
procedures as shall be acceptable to the Trustee, an
Authenticating Agent having an office in a Place of Payment
designated by the Company with respect to such series of
Securities.
ARTICLE NINE
LISTS OF HOLDERS; REPORTS BY TRUSTEE AND COMPANY
SECTION 901. LISTS OF HOLDERS.
Semiannually, not later than June 30 and December
31 in each year, commencing June 30, 1998, and within 30 days of
such other times as the Trustee may request in writing, the
Company shall furnish or cause to be furnished to the Trustee
information as to the names and addresses of the Holders, as of a
date no more than fifteen (15) days prior to the date such
information is so furnished, and the Trustee shall preserve such
information and similar information received by it in any other
capacity and afford to the Holders access to information so
preserved by it, all to such extent, if any, and in such manner
as shall be required by the Trust Indenture Act; provided,
however, that no such list need be furnished so long as the
Trustee shall be the Security Registrar.
SECTION 902. REPORTS BY TRUSTEE AND COMPANY.
Not later than November 15 in each year, commencing
November 15, 1998, the Trustee shall transmit to the Holders, the
Commission and each securities exchange upon which any Securities
are listed, a report, dated as of the next preceding September
15, with respect to any events and other matters described in
Section 313(a) of the Trust Indenture Act, in such manner and to
the extent required by the Trust Indenture Act. The Trustee
shall transmit to the Holders, the Commission and each securities
exchange upon which any Securities are listed, and the Company
shall file with the Trustee (within thirty (30) days after filing
with the Commission in the case of reports which pursuant to the
Trust Indenture Act must be filed with the Commission and
furnished to the Trustee) and transmit to the Holders, such other
information, reports and other documents, if any, at such times
and in such manner, as shall be required by the Trust Indenture
Act. The Company shall notify the Trustee of the listing of any
Securities on any securities exchange.
ARTICLE TEN
CONSOLIDATION, MERGER, CONVEYANCE
OR OTHER TRANSFER
SECTION 1001. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS.
The Company shall not consolidate with or merge
into any other Person, or convey or otherwise transfer, or lease,
all of its properties, as or substantially as an entirety, to any
Person, unless:
(a) the Person formed by such consoli-
dation or into which the Company is merged or the Person
which acquires by conveyance or other transfer, or which
leases (for a term extending beyond the last Stated Maturity
of the Securities then Outstanding), all of the properties
of the Company, as or substantially as an entirety, shall be
a Person organized and existing under the laws of the United
States, any State or Territory thereof or the District of
Columbia or under the laws of Canada or any Province thereof
(such corporation being hereinafter sometimes called the
"SUCCESSOR") and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee,
in form reasonably satisfactory to the Trustee, the due and
punctual payment of the principal of and premium, if any,
and interest, if any, on all the Securities then Outstanding
and the performance and observance of every covenant and
condition of this Indenture to be performed or observed by
the Company; and
(b) the Company shall have delivered to
the Trustee an Officer's Certificate and an Opinion of
Counsel, each of which shall state that such consolidation,
merger, conveyance or other transfer or lease, and such
supplemental indenture, comply with this Article and that
all conditions precedent herein provided for relating to
such transaction have been complied with.
Anything in this Indenture to the contrary
notwithstanding, the conveyance or other transfer, or lease, by
the Company of all of its facilities (a) for the generation of
electric energy, (b) for the transmission of electric energy or
(c) for the distribution of electric energy and/or natural gas,
in each case considered alone, or all of its facilities described
in clauses (a) and (b), considered together, or all of its
facilities described in clauses (b) and (c), considered together,
shall in no event be deemed to constitute a conveyance or other
transfer, or lease, of all the properties of the Company, as or
substantially as an entirety, unless, immediately following such
conveyance, transfer or lease, the Company shall own no unleased
properties in the other such categories of property not so
conveyed or otherwise transferred or leased. The character of
particular facilities shall be determined by reference to the
Uniform System of Accounts prescribed for public utilities and
licensees subject to the Federal Power Act, as amended, to the
extent applicable.
SECTION 1002. SUCCESSOR SUBSTITUTED.
Upon any consolidation or merger or any conveyance
or other transfer of all the properties of the Company, as or
substantially as an entirety, in accordance with Section 1001,
the Successor shall succeed to, and be substituted for, and may
exercise every power and right of, the Company under this
Indenture with the same effect as if such Successor had been
named as the "Company" herein. Without limiting the generality
of the foregoing, the Successor may execute and deliver to the
Trustee, and thereupon the Trustee shall, subject to the
provisions of Article Three, authenticate and deliver,
Securities. All Securities so executed by the Successor, and
authenticated and delivered by the Trustee, shall in all respects
be entitled to the benefits provided by this Indenture equally
and ratably with all Securities executed, authenticated and
delivered prior to the time such consolidation, merger,
conveyance or other transfer became effective.
SECTION 1003. RELEASE OF COMPANY UPON CONVEYANCE OR OTHER
TRANSFER.
In the case of a conveyance or other transfer to
any Person or Persons as contemplated in Section 1001, upon the
satisfaction of all the conditions specified in Section 1001 the
Company (such term being used in this Section without giving
effect to such transaction) shall be released and discharged from
all obligations and covenants under this Indenture and on and
under all Securities then Outstanding (unless the Company shall
have delivered to the Trustee an instrument in which it shall
waive such release and discharge) and the Trustee shall
acknowledge in writing that the Company has been so released and
discharged.
SECTION 1004. MERGER INTO COMPANY.
Nothing in this Indenture shall be deemed to
prevent or restrict any consolidation or merger after the
consummation of which the Company would be the surviving or
resulting entity or any conveyance or other transfer, or lease of
any part of the properties of the Company which does not
constitute the entirety, or substantially the entirety, thereof.
SECTION 1005. TRANSFER OF LESS THAN THE ENTIRETY.
(a) If the Company shall have conveyed or otherwise
transferred any part of its properties which does not constitute
the entirety, or substantially the entirety, thereof to another
Person meeting the requirements set forth in clause (a) of the
first paragraph of Section 1001 and if:
(i) the transferee of such part of the
properties of the Company shall have executed and delivered
to the Trustee an indenture supplemental hereto, in form
reasonably satisfactory to the Trustee, which contains an
assumption by such transferee of the due and punctual
payment of the principal of and premium, if any, and
interest, if any, on all the Securities then Outstanding and
the performance and observance of every covenant and
condition of this Indenture to be performed or observed by
the Company;
(ii) there shall have been delivered to the
Trustee an Independent Expert's Certificate
(A) describing the property so conveyed or
otherwise transferred (such description of property
to be made by reference either to specific items,
units and/or elements of property or portions
thereof, on a percentage or Dollar basis, or to
properties reflected in specified accounts in the
Company's books of account or portions thereof, on
a Dollar basis); provided, however, that such
property shall be identified in such certificate as
facilities for the generation, transmission or
distribution of electric energy or for the storage,
transportation or distribution of natural gas;
(B) stating, in the judgment of the
signers, the Fair Value to the transferee of the
property so conveyed or otherwise transferred;
provided, however, that there shall be excluded
from the property so evaluated any property subject
to any mortgage, deed of trust, security interest
or other lien which secures indebtedness for
borrowed money or for the deferred purchase price
of property;
(C) stating an amount equal to seventy
percent (70%) of the amount stated pursuant to
clause (B) above;
(D) stating an amount equal to the
aggregate principal amount of the Securities then
Outstanding; and
(E) stating that the amount stated
pursuant to clause (D) above does not exceed the
amount stated pursuant to clause (C) above; and
(iii) the Company shall have delivered to the
Trustee an Officer's Certificate and an Opinion of Counsel
each of which shall state that such conveyance or other
transfer and such supplemental indenture comply with this
Section and that all conditions precedent relating to such
transactions provided for in this Section and otherwise in
this Indenture have been complied with;
then, upon the satisfaction of all such conditions,
(x) the Company shall be released and
discharged from all obligations and covenants under this
Indenture and on and under all Securities then Outstanding
(unless the Company shall have delivered to the Trustee an
instrument in which it shall waive such release and
discharge), and the Trustee shall acknowledge in writing
that the Company has been so released and discharged; and
(y) if the Company shall have been
released and discharged as contemplated in clause (x) above,
such transferee shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under
this Indenture with the same effect as if such transferee
had been named the "Company" herein; and without limiting
the generality of the foregoing, such transferee shall be
deemed a "Successor" for purposes of Section 1002 and for
all other purposes of this Indenture.
(b) For purposes of this Section:
"FAIR VALUE" means the fair value of such
property so conveyed or otherwise transferred as
may be determined by reference to (a) the amount
which would be likely to be obtained in an arm's-
length transaction with respect to such property
between an informed and willing buyer and an
informed and willing seller, under no compulsion,
respectively, to buy or sell, (b) the amount of
investment with respect to such property which,
together with a reasonable return thereon, would be
likely to be recovered through ordinary business
operations or otherwise, (c) the cost, accumulated
depreciation and replacement cost with respect to
such property and/or (d) any other relevant
factors; provided, however, that (x) the Fair Value
of property shall be determined without deduction
for any mortgage, deed of trust, pledge, security
interest, encumbrance, lease, reservation,
restriction, servitude, charge or similar right or
any other lien of any kind on such property and (y)
the Fair Value to the transferee of any property
shall not reflect any reduction relating to the
fact that such property may be of less value to a
Person which is not the owner or operator of the
property or any portion thereof than to a Person
which is such owner or operator. Fair Value may be
determined, without physical inspection, by the use
of accounting and engineering records and other
data maintained by the Company or the transferee or
otherwise available to the Expert certifying the
same.
"INDEPENDENT EXPERT'S CERTIFICATE" means a
certificate signed by an authorized officer of the
transferee and by an Independent Expert (which
Independent Expert shall be selected either by the
board of directors or by an authorized officer of
the transferee, the execution of such certificate
by such authorized officer to be conclusive
evidence of such selection) and delivered to the
Trustee. For purposes of this definition, (a)
"EXPERT" means a Person which is an engineer,
appraiser or other expert and which, with respect
to any certificate to be signed by such Person and
delivered to the Trustee, is qualified to pass upon
the matter set forth in such certificate; (b)
"ENGINEER" means a Person engaged in the
engineering profession or otherwise qualified to
pass upon engineering matters (including, but not
limited to, a Person licensed as a professional
engineer, whether or not then engaged in the
engineering profession) and (c) "APPRAISER" means a
Person engaged in the business of appraising
property or otherwise qualified to pass upon the
Fair Value or fair market value of property.
"INDEPENDENT", when applied to any Expert, means
such a Person who (a) is in fact independent, (b)
does not have any direct material financial
interest in the transferee or in any obligor upon
the Securities or in any Affiliate of the
transferee, (c) is not connected with the
transferee or such other obligor as an officer,
employee, promoter, underwriter, trustee, partner,
director or any person performing similar functions
and (d) is approved by the Trustee in the exercise
of reasonable care.
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
SECTION 1101. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
HOLDERS.
Without the consent of any Holders, the Company and
the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form reasonably
satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another
Person to the Company and the assumption by any
such successor of the covenants of the Company
herein and in the Securities, all as provided in
Article Ten; or
(b) to add one or more covenants of the
Company or other provisions for the benefit of all
Holders or for the benefit of the Holders of, or to
remain in effect only so long as there shall be
Outstanding, Securities of one or more specified
series, or one or more specified Tranches thereof,
or to surrender any right or power herein conferred
upon the Company; or
(c) to change or eliminate any provision
of this Indenture or to add any new provision to
this Indenture; provided, however, that if such
change, elimination or addition shall adversely
affect the interests of the Holders of Securities
of any series or Tranche in any material respect,
such change, elimination or addition shall become
effective with respect to such series or Tranche
only when no Security of such series or Tranche
remains Outstanding; or
(d) to provide collateral security for the
Securities of any series thereof; or
(e) to establish the form or terms of
Securities of any series or Tranche as contemplated
by Sections 201 and 301; or
(f) to provide for the authentication and
delivery of bearer securities and coupons
appertaining thereto representing interest, if any,
thereon and for the procedures for the
registration, exchange and replacement thereof and
for the giving of notice to, and the solicitation
of the vote or consent of, the holders thereof, and
for any and all other matters incidental thereto;
or
(g) to evidence and provide for the
acceptance of appointment hereunder by a successor
Trustee with respect to the Securities of one or
more series and to add to or change any of the
provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 811(b); or
(h) to provide for the procedures required
to permit the Company to utilize, at its option, a
non-certificated system of registration for all, or
any series or Tranche of, the Securities; or
(i) to change any place or places where
(1) the principal of and premium, if any, and
interest, if any, on all or any series of
Securities, or any Tranche thereof, shall be
payable, (2) all or any series of Securities, or
any Tranche thereof, may be surrendered for
registration of transfer, (3) all or any series of
Securities, or any Tranche thereof, may be
surrendered for exchange and (4) notices and
demands to or upon the Company in respect of all or
any series of Securities, or any Tranche thereof,
and this Indenture may be served; or
(j) to cure any ambiguity, to correct or
supplement any provision herein which may be
defective or inconsistent with any other provision
herein; or to make any other changes to the
provisions hereof or to add other provisions with
respect to matters or questions arising under this
Indenture, provided that such other changes or
additions shall not adversely affect the interests
of the Holders of Securities of any series or
Tranche in any material respect.
Without limiting the generality of the foregoing,
if the Trust Indenture Act as in effect at the date of the
execution and delivery of this Indenture or at any time
thereafter shall be amended and
(x) if any such amendment shall require
one or more changes to any provisions hereof or the
inclusion herein of any additional provisions, or
shall by operation of law be deemed to effect such
changes or incorporate such provisions by reference
or otherwise, this Indenture shall be deemed to
have been amended so as to conform to such
amendment to the Trust Indenture Act, and the
Company and the Trustee may, without the consent of
any Holders, enter into an indenture supplemental
hereto to evidence such amendment hereof; or
(y) if any such amendment shall permit one
or more changes to, or the elimination of, any
provisions hereof which, at the date of the
execution and delivery hereof or at any time
thereafter, are required by the Trust Indenture Act
to be contained herein or are contained herein to
reflect any provisions of the Trust Indenture Act
as in effect at such date, this Indenture shall be
deemed to have been amended to effect such changes
or elimination, and the Company and the Trustee
may, without the consent of any Holders, enter into
an indenture supplemental hereto to amend this
Indenture to effect such changes or elimination.
SECTION 1102. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
Subject to the provisions of Section 1101, with the
consent of the Holders of a majority in aggregate principal
amount of the Securities of all series then Outstanding under
this Indenture, considered as one class, by Act of said Holders
delivered to the Company and the Trustee, the Company and the
Trustee may enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, this
Indenture; provided, however, that if there shall be Securities
of more than one series Outstanding hereunder and if a proposed
supplemental indenture shall directly affect the rights of the
Holders of Securities of one or more, but less than all, of such
series, then the consent only of the Holders of a majority in
aggregate principal amount of the Outstanding Securities of all
series so directly affected, considered as one class, shall be
required; and provided, further, that if the Securities of any
series shall have been issued in more than one Tranche and if the
proposed supplemental indenture shall directly affect the rights
of the Holders of Securities of one or more, but less than all,
of such Tranches, then the consent only of the Holders of a
majority in aggregate principal amount of the Outstanding
Securities of all Tranches so directly affected, considered as
one class, shall be required; and provided, further, that no such
supplemental indenture shall:
(a) change the Stated Maturity of the
principal of, or any installment of principal of or
interest on, any Security other than pursuant to
the terms thereof, or reduce the principal amount
thereof or the rate of interest thereon (or the
amount of any installment of interest thereon) or
change the method of calculating such rate or
reduce any premium payable thereon, or reduce the
amount of the principal of any Discount Security
that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to
Section 702, or change the coin or currency (or
other property), in which any Security or premium,
if any, or interest, if any, thereon is payable, or
impair the right to institute suit for the
enforcement of any such payment on or after the
Maturity of any Security, without, in any such
case, the consent of the Holder of such Security;
or
(b) reduce the percentage in principal
amount of the Outstanding Securities of any series,
or any Tranche thereof, the consent of the Holders
of which is required for any such supplemental in-
denture, or the consent of the Holders of which is
required for any waiver of compliance with any
provision of this Indenture or of any default
hereunder and its consequences, or reduce the
requirements of Section 1204 for quorum or voting,
without, in any such case, the consent of the
Holder of each Outstanding Security of such series
or Tranche; or
(c) modify any of the provisions of this
Section, Section 506 or Section 713 with respect to
the Securities of any series or any Tranche thereof
(except to increase the percentages in principal
amount referred to in this Section or such other
Sections or to provide that other provisions of
this Indenture cannot be modified or waived without
the consent of the Holders of all Securities of
such series or Tranche) without, in any such case,
the consent of the Holder of each Outstanding
Security of such series or Tranche; provided, how-
ever, that this clause shall not be deemed to
require the consent of any Holder with respect to
changes in the references to "the Trustee" and
concomitant changes in this Section, or the
deletion of this proviso, in accordance with the
requirements of Sections 811(b) and 1101(g).
A supplemental indenture which (x) changes or
eliminates any covenant or other provision of this Indenture
which has expressly been included solely for the benefit of the
Holders of, or which is to remain in effect only so long as there
shall be Outstanding, Securities of one or more specified series,
or one or more Tranches thereof, or (y) modifies the rights of
the Holders of Securities of such series or Tranches with respect
to such covenant or other provision, shall be deemed not to
affect the rights under this Indenture of the Holders of
Securities of any other series or Tranche.
It shall not be necessary for any Act of Holders
under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof.
SECTION 1103. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts
created by, any supplemental indenture permitted by this Article
or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject
to Section 801) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter
into any such supplemental indenture which affects the Trustee's
own rights, duties, immunities or liabilities under this
Indenture or otherwise.
SECTION 1104. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution and delivery of any supplemental
indenture under this Article this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of
Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby. Any supplemental indenture
permitted by this Article may restate this Indenture in its
entirety, and, upon the execution and delivery thereof, any such
restatement shall supersede this Indenture as theretofore in
effect for all purposes.
SECTION 1105. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to
this Article shall conform to the requirements of the Trust
Indenture Act.
SECTION 1106. REFERENCE IN SECURITIES TO SUPPLEMENTAL
INDENTURES.
Securities of any series, or any Tranche thereof,
authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities of
any series, or any Tranche thereof, so modified as to conform, in
the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series or Tranche.
SECTION 1107. MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE.
To the extent, if any, that the terms of any
particular series of Securities shall have been established in or
pursuant to a Board Resolution or an Officer's Certificate
pursuant to a supplemental indenture or a Board Resolution as
contemplated by Section 301, and not in a supplemental indenture,
additions to, changes in or the elimination of any of such terms
may be effected by means of a supplemental Board Resolution or a
supplemental Officer's Certificate, as the case may be, delivered
to, and accepted by, the Trustee; provided, however, that such
supplemental Board Resolution or supplemental Officer's
Certificate shall not be accepted by the Trustee or otherwise be
effective unless all conditions set forth in this Indenture which
would be required to be satisfied if such additions, changes or
elimination were contained in a supplemental indenture shall have
been appropriately satisfied. Upon the acceptance thereof by the
Trustee, any such supplemental Board Resolution or supplemental
Officer's Certificate shall be deemed to be a "supplemental
indenture" for purposes of Section 1104 and 1106.
ARTICLE TWELVE
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 1201. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Securities of one or more,
or all, series, or any Tranche or Tranches thereof, may be called
at any time and from time to time pursuant to this Article to
make, give or take any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be made, given or taken by Holders of Securities of
such series or Tranches.
SECTION 1202. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a
meeting of Holders of Securities of one or more, or all, series,
or any Tranche or Tranches thereof, for any purpose specified in
Section 1201, to be held at such time and (except as provided in
subsection (b) of this Section) at such place in the Borough of
Manhattan, The City of New York, as the Trustee shall determine,
or, with the approval of the Company, at any other place. Notice
of every such meeting, setting forth the time and the place of
such meeting and in general terms the action proposed to be taken
at such meeting, shall be given, in the manner provided in
Section 106, not less than twenty-one (21) nor more than one
hundred eighty (180) days prior to the date fixed for the
meeting.
(b) The Trustee may be asked to call a
meeting of the Holders of Securities of one or more, or all,
series, or any Tranche or Tranches thereof, by the Company or by
the Holders of thirty-three per centum (33%) in aggregate
principal amount of all of such series and Tranches, considered
as one class, for any purpose specified in Section 1201, by
written request setting forth in reasonable detail the action
proposed to be taken at the meeting. If the Trustee shall have
been asked by the Company to call such a meeting, the Company
shall determine the time and place for such meeting and may call
such meeting by giving notice thereof in the manner provided in
subsection (a) of this Section, or shall direct the Trustee, in
the name and at the expense of the Company, to give such notice.
If the Trustee shall have been asked to call such a meeting by
Holders in accordance with this subsection (b), and the Trustee
shall not have given the notice of such meeting within twenty-one
(21) days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, then
the Holders of Securities of such series and Tranches, in the
principal amount above specified, may determine the time and the
place in the Borough of Manhattan, The City of New York, or in
such other place as shall be determined or approved by the
Company, for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in subsection (a)
of this Section.
(c) Any meeting of Holders of Securities
of one or more, or all, series, or any Tranche or Tranches
thereof, shall be valid without notice if the Holders of all
Outstanding Securities of such series or Tranches are present in
person or by proxy and if representatives of the Company and the
Trustee are present, or if notice is waived in writing before or
after the meeting by the Holders of all Outstanding Securities of
such series, or any Tranche or Tranches thereof, or by such of
them as are not present at the meeting in person or by proxy, and
by the Company and the Trustee.
SECTION 1203. PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of
Securities of one or more, or all, series, or any Tranche or
Tranches thereof, a Person shall be (a) a Holder of one or more
Outstanding Securities of such series or Tranches, or (b) a
Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such
series or Tranches by such Holder or Holders. The only Persons
who shall be entitled to attend any meeting of Holders of
Securities of any series or Tranche shall be the Persons entitled
to vote at such meeting and their counsel, any representatives of
the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 1204. QUORUM; ACTION.
The Persons entitled to vote a majority in
aggregate principal amount of the Outstanding Securities of the
series and Tranches with respect to which a meeting shall have
been called as hereinbefore provided, considered as one class,
shall constitute a quorum for a meeting of Holders of Securities
of such series and Tranches; provided, however, that if any
action is to be taken at such meeting which this Indenture
expressly provides may be taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of
the Outstanding Securities of such series and Tranches,
considered as one class, the Persons entitled to vote such
specified percentage in principal amount of the Outstanding Secu-
rities of such series and Tranches, considered as one class,
shall constitute a quorum. In the absence of a quorum within one
hour of the time appointed for any such meeting, the meeting
shall, if convened at the request of Holders of Securities of
such series and Tranches, be dissolved. In any other case the
meeting may be adjourned for such period as may be determined by
the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for such
period as may be determined by the chairman of the meeting prior
to the adjournment of such adjourned meeting. Except as provided
by Section 1205(e), notice of the reconvening of any meeting
adjourned for more than thirty (30) days shall be given as
provided in Section 106 not less than ten (10) days prior to the
date on which the meeting is scheduled to be reconvened. Notice
of the reconvening of an adjourned meeting shall state expressly
the percentage, as provided above, of the principal amount of the
Outstanding Securities of such series and Tranches which shall
constitute a quorum.
Except as limited by Section 1102, any resolution
presented to a meeting or adjourned meeting duly reconvened at
which a quorum is present as aforesaid may be adopted only by the
affirmative vote of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of the series and
Tranches with respect to which such meeting shall have been
called, considered as one class; provided, however, that, except
as so limited, any resolution with respect to any action which
this Indenture expressly provides may be taken by the Holders of
a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of such series and
Tranches, considered as one class, may be adopted at a meeting or
an adjourned meeting duly reconvened and at which a quorum is
present as aforesaid by the affirmative vote of the Holders of
such specified percentage in principal amount of the Outstanding
Securities of such series and Tranches, considered as one class.
Any resolution passed or decision taken at any
meeting of Holders of Securities duly held in accordance with
this Section shall be binding on all the Holders of Securities of
the series and Tranches with respect to which such meeting shall
have been held, whether or not present or represented at the
meeting.
SECTION 1205. ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING
RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS.
(a) Attendance at meetings of Holders of
Securities may be in person or by proxy; and, to the extent
permitted by law, any such proxy shall remain in effect and be
binding upon any future Holder of the Securities with respect to
which it was given unless and until specifically revoked by the
Holder or future Holder (except as provided in Section 104(g)) of
such Securities before being voted.
(b) Notwithstanding any other provisions
of this Indenture, the Trustee may make such reasonable
regulations as it may deem advisable for any meeting of Holders
of Securities in regard to proof of the holding of such
Securities and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of
the meeting as it shall deem appropriate. Except as otherwise
permitted or required by any such regulations and approved by the
Company, the holding of Securities shall be proved in the manner
specified in Section 104 and the appointment of any proxy shall
be proved in the manner specified in Section 104. Such
regulations may provide that written instruments appointing
proxies, regular on their face, may be presumed valid and genuine
without the proof specified in Section 104 or other proof.
(c) The Trustee shall, by an instrument in
writing, appoint a temporary chairman of the meeting, unless the
meeting shall have been called by the Company or by Holders as
provided in Section 1202(b), in which case the Company or the
Holders of Securities of the series and Tranches calling the
meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in aggregate principal amount of the
Outstanding Securities of all series and Tranches represented at
the meeting, considered as one class.
(d) At any meeting each Holder or proxy
shall be entitled to one vote for each One Thousand Dollars
($1,000) principal amount of Outstanding Securities held or
represented by such Holder; provided, however, that no vote shall
be cast or counted at any meeting in respect of any Security
challenged as not Outstanding and ruled by the chairman of the
meeting to be not Outstanding. The chairman of the meeting shall
have no right to vote, except as a Holder of a Security or proxy.
(e) Any meeting duly called pursuant to
Section 1202 at which a quorum is present may be adjourned from
time to time by Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities of all series and
Tranches represented at the meeting, considered as one class; and
the meeting may be held as so adjourned without further notice.
SECTION 1206. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any
meeting of Holders shall be by written ballots on which shall be
subscribed the signatures of the Holders or of their
representatives by proxy and the principal amounts and serial
numbers of the Outstanding Securities, of the series and Tranches
with respect to which the meeting shall have been called, held or
represented by them. The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at
the meeting for or against any resolution and who shall make and
file with the secretary of the meeting their verified written
reports of all votes cast at the meeting. A record in duplicate
of the proceedings of each meeting of Holders shall be prepared
by the secretary of the meeting and there shall be attached to
such record the original reports of the inspectors of votes on
any vote by ballot taken thereat and affidavits by one or more
persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that such notice was given as
provided in Section 1202 and, if applicable, Section 1204. Each
copy shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one such copy
shall be delivered to the Company, and another to the Trustee to
be preserved by the Trustee, the latter to have attached thereto
the ballots voted at the meeting. Any record so signed and
verified shall be conclusive evidence of the matters therein
stated.
SECTION 1207. ACTION WITHOUT MEETING.
In lieu of a vote of Holders at a meeting as
hereinbefore contemplated in this Article, any request, demand,
authorization, direction, notice, consent, waiver or other action
may be made, given or taken by Holders by written instruments as
provided in Section 104.
ARTICLE THIRTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 1301. LIABILITY SOLELY CORPORATE.
No recourse shall be had for the payment of the
principal of or premium, if any, or interest, if any, on any
Securities, or any part thereof, or for any claim based thereon
or otherwise in respect thereof, or of the indebtedness
represented thereby, or upon any obligation, covenant or
agreement under this Indenture, against any incorporator,
stockholder, officer or director, as such, past, present or
future, of the Company or of any predecessor or successor cor-
poration (either directly or through the Company or a predecessor
or successor corporation), whether by virtue of any
constitutional provision, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise; it being
expressly agreed and understood that this Indenture and all the
Securities are solely corporate obligations and that no personal
liability whatsoever shall attach to, or be incurred by, any
incorporator, stockholder, officer or director, past, present or
future, of the Company or of any predecessor or successor
corporation, either directly or indirectly through the Company or
any predecessor or successor corporation, because of the
indebtedness hereby authorized or under or by reason of any of
the obligations, covenants or agreements contained in this
Indenture or in any of the Securities or to be implied herefrom
or therefrom; and such personal liability, if any, is hereby
expressly waived and released as a condition of, and as part of
the consideration for, the execution and delivery of this
Indenture and the issuance of the Securities.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of the day and year first
above written.
THE WASHINGTON WATER POWER COMPANY
By:
-----------------------------------
Name: J.E. Eliassen
Title: Senior Vice President and
Chief Financial Officer
THE CHASE MANHATTAN BANK, Trustee
By:
-----------------------------------
Name:
Title:
=================================================================
THE WASHINGTON WATER POWER COMPANY
----------------------------
OFFICER'S CERTIFICATE
(Under Section 301 of the Indenture,
dated as of , 1997)
-------- --
Establishing Series of Securities Designated
---------------------------
-------------------------------
,
---------- -- ----
=================================================================
<PAGE>
THE WASHINGTON WATER POWER COMPANY
OFFICER'S CERTIFICATE
(Under Section 301 of the Indenture,
dated as of , 1997)
------- --
I, , a of
------------------ ------------------------
THE WASHINGTON WATER POWER COMPANY (the "Company"), in accordance
with Section 301 of the Indenture, dated as of , 1997
--------- --
(the "Indenture", capitalized terms used herein and not defined
herein having the meanings specified in the Indenture), of the
Company to The Chase Manhattan Bank, trustee (the "Trustee"), do
hereby establish a series of Securities having the terms and
characteristics set forth in this Officer's Certificate.
PART I
Set forth below in this Part I are the terms and
characteristics of the series of Securities established hereby
referred to in clauses (a) through (t) in the second paragraph of
Section 301 of the Indenture (the lettered clauses set forth
herein corresponding to such clauses in said Section 301).
(a) the title of the Securities of such series, being
Series No. under the Indenture, shall be " "
-- ------------------
(the Securities of such series, for purposes of this Officer's
Certificate, being sometimes hereinafter called the
"Securities");
(b) the aggregate principal amount of the Securities
which may be authenticated and delivered under the Indenture
shall be limited to $ , except as contemplated in Section
------
301(b) of the Indenture;
(c) interest on the Securities shall be payable to the
Person or Persons in whose names the Securities are registered at
the close of business on the Regular Record Date for such
interest, except as otherwise expressly provided in the form of
[Floating Rate] Security attached hereto and hereby authorized
and approved;
(d) the principal of the Securities shall be payable
on , ;
----- -- ----
(e) [the Securities shall bear interest at a rate of
per centum ( %) per annum;] [the Initial Interest Rate for
---- ---
the Securities shall be per centum ( %) per annum, the Base
--- ---
Rate for the Securities shall be [the CD Rate][the Commercial
Paper Rate][the Constant-Maturity Treasury Rate][the Federal
Funds Rate][LIBOR][the Prime Rate][the Treasury Rate][any other
Base Rate], the Maximum Interest Rate, if any, for the Securities
shall be per centum ( %) per annum, the Minimum Interest
--- ---
Rate, if any, for the Securities shall be per centum ( %)
--- ---
per annum, the Interest Payment Period for the Securities shall
be , the Interest Reset Period for the Securities shall be
-----
, the Interest Reset Dates for the Securities shall be
-----
, the Rate Determination Dates for the Securities shall be
-----
, the Index Maturity for the Securities shall be , the
----- -----
Spread, if any, for the Securities shall be , the Spread
-----
Multiplier, if any, for the Securities shall be (each of
-----
such terms being referred to in the form of Floating Rate
Security attached hereto), [any other terms relating to the
determination of the interest rates on the Securities and the
interest rate, if any, on overdue principal, premium or interest
for the Securities shall be ;
-----
interest shall accrue on any Securities from the Original
Interest Accrual Date specified in such Securities or the most
recent date to which interest has been paid or duly provided for;
the Interest Payment Dates on the Securities shall be
----- --
and , and the Regular Record Date with respect to each
----- --
such Interest Payment Date shall be the date 15 calendar days
immediately preceding such Interest Payment Date (whether or not
a Business Day); and interest on Floating Rate which employ
-----
the Treasury Rate as the Base Rate shall be computed on the basis
of the actual number of days in the year;
(f) the corporate trust office of The Chase Manhattan
Bank in New York, New York shall be the place at which (i) the
principal of, premium, if any, and interest, if any, on the
Securities at Maturity shall be payable upon presentment,
interest prior to Maturity to be paid as specified in the form of
Security attached hereto, (ii) registration of transfer of the
Securities may be effected, (iii) exchanges of Securities may be
effected and (iv) notices and demands to or upon the Company in
respect of the Securities and the Indenture may be served; and
The Chase Manhattan Bank shall be the Security Registrar and a
Paying Agent for the Securities; provided, however, that the
Company reserves the right to change, by one or more Officer's
Certificates supplemental to this Officer's Certificate, any such
place or the Security Registrar or such Paying Agent; and
provided, further, that the Company reserves the right to
designate, by one or more Officer's Certificates supplemental to
this Officer's Certificate, its principal corporate office in
Spokane, Washington as any such place or itself as the Security
Registrar;
(g) [the Securities shall be redeemable in whole or in
part, at the option of the Company, during the period, at the
prices and upon the conditions and terms as set forth below:];
(h) [the Company shall be obligated to [redeem]
[purchase] the Securities [pursuant to [a sinking fund]
[analogous provisions]] [at the option of a Holder thereof],
during the period, at the prices and upon the terms and
conditions as set forth below;]
(i) the Securities shall be issued in denominations of
$100,000 or any amount in excess thereof that is an integral
multiple of $1,000;
(j) inapplicable;
(k) inapplicable;
(l) inapplicable;
(m) inapplicable;
(n) inapplicable;
(o) inapplicable;
(p) inapplicable;
(q) the Securities are initially to be issued in
global form, registered in the name of Cede & Co., as nominee for
The Depository Trust Company (the "Depositary"). Such Securities
shall not be transferable or exchangeable, nor shall any
purported transfer be registered, except as follows:
(i) such Securities may be transferred in whole, and
appropriate registration of transfer effected, if such
transfer is by such nominee to the Depositary, or by the
Depositary to another nominee thereof, or by any nominee of
the Depositary to any other nominee thereof, or by the
Depositary or any nominee thereof to any successor
securities depositary or any nominee thereof; and
(ii) such Securities may be exchanged for definitive
Securities registered in the respective names of the
beneficial holders thereof, and thereafter shall be
transferable without restriction, if:
(A) The Depositary, or any successor securities
depositary, shall have notified the Company and the
Trustee that it is unwilling or unable to continue to
act as securities depositary with respect to such
Securities and the Trustee shall not have been notified
by the Company within ninety (90) days of the identity
of a successor securities depositary with respect to
such Securities;
(B) the Company shall have delivered to the Trustee a
Company Order to the effect that such Securities shall
be so exchangeable on and after a date specified
therein; or
(C) (I) an Event of Default shall have occurred and be
continuing, (II) the Trustee shall have given notice of
such Event of Default pursuant to Section 802 of the
Indenture and (III) there shall have been delivered to
the Company and the Trustee an Opinion of Counsel to
the effect that the interests of the beneficial owners
of such Securities in respect thereof will be
materially impaired unless such owners become Holders
of definitive Securities;
it being understood that any such registration of transfer or
exchange shall be effected in accordance with Section 305 of the
Indenture.
(r) inapplicable;
(s) no service charge shall be made for the
registration of transfer or exchange of the Securities; provided,
however, that the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in
connection with the exchange or transfer; and
(t) [Section 113 of the Indenture shall apply to the
Securities][the provisions of the Floating Rate Securities shall
apply in lieu of the provisions of Section 113].
PART II
Set forth below in this Part II are additional terms of
the series of Securities established hereby, as contemplated by
clause (u) in the second paragraph of Section 301 of the
Indenture.
(a) the Securities shall have such further terms as
are set forth in the form of [Floating Rate] Security
attached hereto as Exhibit A;
(b) if the Company shall make any deposit of money
and/or Government Obligations with respect to any
Securities, or any portion of the principal amount thereof,
as contemplated by Section 601 of the Indenture, the Company
shall not deliver an Officer's Certificate described in
clause (z) in the first paragraph of said Section 601 unless
the Company shall also deliver to the Trustee, together with
such Officer's Certificate, either:
(i) an instrument wherein the Company,
notwithstanding the satisfaction and discharge of its
indebtedness in respect of the Securities, shall assume
the obligation (which shall be absolute and
unconditional) to irrevocably deposit with the Trustee
or Paying Agent such additional sums of money, if any,
or additional Government Obligations (meeting the
requirements of Section 601), if any, or any
combination thereof, at such time or times, as shall be
necessary, together with the money and/or Government
Obligations theretofore so deposited, to pay when due
the principal of and premium, if any, and interest due
and to become due on such Securities or portions
thereof, all in accordance with and subject to the
provisions of said Section 601; provided, however, that
such instrument may state that the obligation of the
Company to make additional deposits as aforesaid shall
be subject to the delivery to the Company by the
Trustee of a notice asserting the deficiency
accompanied by an opinion of an independent public
accountant of nationally recognized standing showing
the calculation thereof (which shall be obtained at the
expense of the Company); or
(ii) an Opinion of Counsel to the effect that the
Holders of such Securities, or portions of the
principal amount thereof, will not recognize income,
gain or loss for United States federal income tax
purposes as a result of the satisfaction and discharge
of the Company's indebtedness in respect thereof and
will be subject to United States federal income tax on
the same amounts, at the same times and in the same
manner as if such satisfaction and discharge had not
been effected[; and
(c)(i) So long as any of the Securities shall remain
Outstanding, the Company shall not create, issue, incur or assume
any Secured Debt other than Permitted Secured Debt without the
consent of the Holders of a majority in principal amount of the
Outstanding Securities of all series (including the Securities)
and Tranches with respect to which this covenant is specified as
contemplated by Section 301, considered as one class (all such
Securities being hereinafter called the "Benefitted Securities").
(ii) The provisions of clause (c)(i) above shall not
prohibit the creation, issuance, incurrence or assumption of any
Secured Debt if either
(A) the Company shall make effective provision whereby
all Benefitted Securities then Outstanding shall be secured
equally and ratably with such Secured Debt; or
(B) the Company shall deliver to the Trustee bonds,
notes or other evidences of indebtedness secured by the Lien
which secures such Secured Debt (hereinafter called "Secured
Obligations") (I) in an aggregate principal amount equal to
the aggregate principal amount of the Benefitted Securities
then Outstanding, (II) maturing (or being subject to
mandatory redemption) on such dates and in such principal
amounts that, at each Stated Maturity of the Outstanding
Benefitted Securities, there shall mature (or be redeemed)
Secured Obligations equal in principal amount to the
Securities then to mature and (III) containing, in addition
to any mandatory redemption provisions applicable to all
Secured Obligations outstanding under such Lien and any
mandatory redemption provisions contained therein pursuant
to clause (II) above, mandatory redemption provisions
correlative to the provisions, if any, for the mandatory
redemption (pursuant to a sinking fund or otherwise) of the
Benefitted Securities or for the redemption thereof at the
option of the Holder, as well as a provision for mandatory
redemption upon an acceleration of the maturity of all
Outstanding Benefitted Securities following an Event of
Default (such mandatory redemption to be rescinded upon the
rescission of such acceleration); it being expressly
understood that such Secured Obligations (X) may, but need
not, bear interest, (Y) may, but need not, contain
provisions for the redemption thereof at the option of the
issuer, any such redemption to be made at a redemption price
or prices not less than the principal amount thereof and (Z)
shall be held by the Trustee for the benefit of the Holders
of all Benefitted Securities from time to time Outstanding
subject to such terms and conditions relating to surrender
to the Company, transfer restrictions, voting, application
of payments of principal and interest and other matters as
shall be set forth in an indenture supplemental hereto
specifically providing for the delivery to the Trustee of
such Secured Obligations.
(iii) If the Company shall elect either of the
alternatives described in clause (c)(ii) above, the Company shall
deliver to the Trustee:
(A) an indenture supplemental to the Indenture (I)
together with appropriate inter-creditor arrangements,
whereby all Securities then Outstanding shall be secured by
the Lien referred to in clause (c)(ii) above equally and
ratably with all other indebtedness secured by such Lien or
(II) providing for the delivery to the Trustee of Secured
Obligations;
(B) an Officer's Certificate (I) stating that, to the
knowledge of the signer, (1) no Event of Default has
occurred and is continuing and (2) no event has occurred and
is continuing which entitles the secured party under such
Lien to accelerate the maturity of the indebtedness
outstanding thereunder and (II) stating the aggregate
principal amount of indebtedness issuable, and then proposed
to be issued, under and secured by such Lien;
(C) an Opinion of Counsel (I) if the Benefitted
Securities then Outstanding are to be secured by such Lien,
to the effect that all such Securities then Outstanding are
entitled to the benefit of such Lien equally and ratably
with all other indebtedness outstanding under such Lien or
(II) if Secured Obligations are to be delivered to the
Trustee, to the effect that such Secured Obligations have
been duly issued under such Lien and constitute valid
obligations, entitled to the benefit of such Lien equally
and ratably with all other indebtedness then outstanding
under such Lien.
(c) For all purposes of this clause (c), except as
otherwise expressly provided or unless the context otherwise
requires:
"DEBT", with respect to any Person, means (A)
indebtedness of such Person for borrowed money evidenced by
a bond, debenture, note or other written instrument or
agreement by which such Person is obligated to repay such
borrowed money and (B) any guaranty by such Person of any
such indebtedness of another Person. "Debt" does not
include, among other things, (X) indebtedness of such Person
under any installment sale or conditional sale agreement or
any other agreement relating to indebtedness for the
deferred purchase price of property or services, (Y)
obligations of such Person under any lease agreement
(including any lease intended as security), whether or not
such obligations are required to be capitalized on the
balance sheet of such Person under generally accepted
accounting principles, or (Z) liabilities secured by any
Lien on any property owned by such Person if and to the
extent that such Person has not assumed or otherwise become
liable for the payment thereof.
"EXCEPTED PROPERTY" means
(A) all cash on hand or in banks or other financial
institutions, deposit accounts, shares of stock, interests
in general or limited partnerships, bonds, notes, other
evidences of indebtedness and other securities, of
whatsoever kind and nature, not hereafter paid or delivered
to, deposited with or held by the Trustee hereunder or
required so to be;
(B) all contracts, leases, operating agreements and
other agreements of whatsoever kind and nature; all contract
rights, bills, notes and other instruments and chattel paper
(except to the extent that any of the same constitute
securities, in which case they are separately excepted from
the operation of this clause (w) under clause (A) above);
all revenues, income and earnings, all accounts, accounts
receivable and unbilled revenues, and all rents, tolls,
issues, products and profits, claims, credits, demands and
judgments; all governmental and other licenses, permits,
franchises, consents and allowances; and all patents, patent
licenses and other patent rights, patent applications, trade
names, trademarks, copyrights, claims, credits, choses in
action and other intangible property and general intangibles
including, but not limited to, computer software;
(C) all automobiles, buses, trucks, truck cranes,
tractors, trailers and similar vehicles and movable
equipment; all rolling stock, rail cars and other railroad
equipment; all vessels, boats, barges and other marine
equipment; all airplanes, helicopters, aircraft engines and
other flight equipment; all parts, accessories and supplies
used in connection with any of the foregoing; and all
personal property of such character that the perfection of a
security interest therein or other Lien thereon is not
governed by the Uniform Commercial Code as in effect in the
jurisdiction in which such property is located;
(D) all goods, stock in trade, wares, merchandise and
inventory held for the purpose of sale or lease in the
ordinary course of business; all materials, supplies,
inventory and other items of personal property which are
consumable (otherwise than by ordinary wear and tear) in
their use in the operation of any property of the Company;
all fuel, including nuclear fuel, whether or not any such
fuel is in a form consumable in the operation of any
property of the Company, including separate components of
any fuel in the forms in which such components exist at any
time before, during or after the period of the use thereof
as fuel; all hand and other portable tools and equipment;
all furniture and furnishings; and computers and data
processing, data storage, data transmission,
telecommunications and other facilities, equipment and
apparatus, which, in any case, are used primarily for
administrative or clerical purposes or are otherwise not
necessary for the operation or maintenance of the
facilities, machinery, equipment or fixtures of the Company
for (I) the generation, transmission or distribution of
electric energy, (II) the transmission, storage or
distribution of gas or (III) the appropriation, storage,
transmission or distribution of water;
(E) all coal, ore, gas, oil and other minerals and all
timber, and all rights and interests in any of the
foregoing, whether or not such minerals or timber shall have
been mined or extracted or otherwise separated from the
land; and all electric energy, gas (natural or artificial),
steam, water and other products generated, produced,
manufactured, purchased or otherwise acquired by the
Company;
(F) all real property, leaseholds, gas rights, wells,
gathering, tap or other pipe lines, or facilities, equipment
or apparatus, in any case used or to be used primarily for
the production or gathering of natural gas; and
(G) all property which is the subject of a lease
agreement designating the Company as lessee and all right,
title and interest of the Company in and to such property
and in, to and under such lease agreement, whether or not
such lease agreement is intended as security.
"LIEN" means any mortgage, deed of trust, pledge,
security interest, conditional sale or other title retention
agreement or any lease in the nature thereof.
"PERMITTED SECURED DEBT" means, as of any particular
time, any of the following:
(A) Secured Debt which matures less than one year from
the date of the issuance or incurrence thereof and is not
extendible at the option of the issuer; and any refundings,
refinancings and/or replacements of any such Secured Debt by
or with similar Secured Debt;
(B) Secured Debt secured by Purchase Money Liens or
any other Liens existing or placed upon property at the time
of, or within one hundred eighty (180) days after, the
acquisition thereof by the Company, and any refundings,
refinancings and/or replacements of any such Secured Debt;
provided, however, that no such Purchase Money Lien or other
Lien shall extend to or cover any property of the Company
other than (I) the property so acquired and improvements,
extensions and additions to such property and renewals,
replacements and substitutions of or for such property or
any part or parts thereof and (II) with respect to Purchase
Money Liens, other property subsequently acquired by the
Company;
(C) Secured Debt relating to governmental obligations
the interest on which is not included in gross income for
purposes of federal income taxation pursuant to Section 103
of the Internal Revenue Code of 1986, as amended (or any
successor provision of law), for the purpose of financing or
refinancing, in whole or in part, costs of acquisition or
construction of property to be used by the Company, to the
extent that the Lien which secures such Secured Debt is
required either by applicable law or by the issuer of such
governmental obligations or is otherwise necessary in order
to establish or maintain such exclusion from gross income;
and any refundings, refinancings and/or replacements of any
such Secured Debt by or with similar Secured Debt;
(D) Secured Debt (I) which is related to the
construction or acquisition of property not previously owned
by the Company or (II) which is related to the financing of
a project involving the development or expansion of property
of the Company and (III) in either case, the obligee in
respect of which has no recourse to the Company or any
property of the Company other than the property constructed
or acquired with the proceeds of such transaction or the
project financed with the proceeds of such transaction (or
the proceeds of such property or such project); and any
refundings, refinancings and/or replacements of any such
Secured Debt by or with Secured Debt described in clause
(III) above;
(E) Secured Debt permitted under clause (c)(ii) above;
and
(F) in addition to the Permitted Secured Debt
described in clauses (A) through (E) above, Secured Debt not
otherwise permitted in this clause (c) in an aggregate
principal amount not exceeding 10% of the total assets of
the Company and its consolidated subsidiaries, as shown on
the latest balance sheet of the Company and its consolidated
subsidiaries, audited by independent certified public
accountants, dated prior to the date of the creation,
issuance, incurrence or assumption of such Secured Debt.
"PURCHASE MONEY LIEN" means, with respect to any
property being acquired by the Company, a Lien on such
property which
(A) is taken or retained by the transferor of such
property to secure all or part of the purchase price
thereof;
(B) is granted to one or more Persons other than the
transferor which, by making advances or incurring an
obligation, give value to enable the grantor of such Lien to
acquire rights in or the use of such property;
(C) is held by a trustee or agent for the benefit of
one or more Persons described in clause (A) or (B) above,
provided that such Lien may be held, in addition, for the
benefit of one or more other Persons which shall have
theretofore given, or may thereafter give, value to or for
the benefit or account of the grantor of such Lien for one
or more other purposes; or
(D) otherwise constitutes a purchase money mortgage or
a purchase money security interest under applicable law;
and, without limiting the generality of the foregoing, for
purposes of this Indenture, the term Purchase Money Lien
shall be deemed to include any Lien described above whether
or not such Lien (X) shall permit the issuance or other
incurrence of additional indebtedness secured by such Lien
on such property, (Y) shall permit the subjection to such
Lien of additional property and the issuance or other
incurrence of additional indebtedness on the basis thereof
and/or (Z) shall have been granted prior to the acquisition
of such property, shall attach to or otherwise cover
property other than the property being acquired and/or shall
secure obligations issued prior and/or subsequent to the
issuance of the obligations delivered in connection with
such acquisition.
"SECURED DEBT", with respect to any Person, means Debt
created, issued, incurred or assumed by such Person which is
secured by a Lien upon any property (other than Excepted
Property) of the Company, real, personal or mixed, of
whatever kind or nature and wherever located, whether owned
at the date of the initial authentication and delivery of
the Securities, or thereafter acquired].
------------
<PAGE>
IN WITNESS WHEREOF, I have executed this Officer's
Certificate this day of , .
--- ---- ----
------------------------------
Name:
Title:
<PAGE>
FORM OF FIXED RATE DEBT SECURITY
(See legend at the end of this Security for
restrictions on transfer and change of form)
THE WASHINGTON WATER POWER COMPANY
__________________, Series __
Original Interest Accrual Date: Redeemable: Yes__ No__
Stated Maturity: Initial Redemption Date:
Interest Rate: Initial Redemption Price:
Interest Payment Dates: Reduction Percentage:
Regular Record Dates: Redemption
Limitation Date:
Other Provisions:
OID: Yes__ No__
Total Amount of OID (%):
Yield to Maturity (%):
Initial Accrual
Period OID (%):
(Constant - Yield Method)
This Security is not a Discount Security within
the meaning of the within-mentioned Indenture.
------------------------------------
Principal Amount Registered No.
$ CUSIP
THE WASHINGTON WATER POWER COMPANY, a corporation organized and
existing under the laws of the State of Washington (herein called the
"Company," which term includes any successor corporation under the
Indenture referred to below), for value received, hereby promises to
pay to
or registered assigns, the principal sum of
DOLLARS
on the Stated Maturity specified above, and to pay interest thereon
from the Original Interest Accrual Date specified above or from the
most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually in arrears on the Interest Payment
Dates specified above in each year, commencing with the Interest
Payment Date next succeeding the Original Interest Accrual Date
specified above, and at Maturity, at the Interest Rate per annum
specified above, until the principal hereof is paid or duly provided
for. The interest so payable, and paid or duly provided for, on any
Interest Payment Date shall, as provided in such Indenture, be paid to
the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular
Record Date specified above (whether or not a Business Day) next
preceding such Interest Payment Date. Notwithstanding the foregoing,
(a) if the Original Interest Accrual Date of this Security is after a
Regular Record Date and before the corresponding Interest Payment
Date, interest so payable for the period from and including the
Original Interest Accrual Date to but excluding such Interest Payment
Date shall be paid on the next succeeding Interest Payment Date to the
Holder hereof on the related Regular Record Date; and (b) interest
payable at Maturity shall be paid to the Person to whom principal
shall be paid. Except as otherwise provided in said Indenture, any
such interest not so paid or duly provided for shall forthwith cease
to be payable to the Holder on such Regular Record Date and may either
be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Unpaid Interest to be
fixed by the Trustee, notice of which shall be given to Holders of
Securities of this series not less than 15 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said
Indenture.
Payment of the principal of and premium, if any, on this Security
and interest hereon at Maturity shall be made upon presentation of
this Security at the Corporate Trust Office of The Chase Manhattan
Bank in New York, New York, or at such other office or agency as may
be designated for such purpose by the Company from time to time.
Payment of interest on this Security (other than interest at Maturity)
shall be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register, except
that if such Person shall be a securities depositary, such payment may
be made by such other means in lieu of check, as shall be agreed upon
by the Company, the Trustee and such Person. Payment of the principal
of and premium, if any, and interest on this Security, as aforesaid,
shall be made in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of
public and private debts.
This Security is one of a duly authorized issue of securities of
the Company (herein called the "Securities"), issued and issuable in
one or more series under and equally secured by an Indenture, dated as
of ___________ __, 1997 (such Indenture as originally executed and
delivered and as supplemented or amended from time to time thereafter,
together with any constituent instruments establishing the terms of
particular Securities, being herein called the "Indenture"), between
the Company and The Chase Manhattan Bank, trustee (herein called the
"Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the respective rights,
limitations of rights, duties and immunities of the Company, the
Trustee and the Holders of the Securities thereunder and of the terms
and conditions upon which the Securities are, and are to be,
authenticated and delivered and secured. The acceptance of this
Security shall be deemed to constitute the consent and agreement by
the Holder hereof to all of the terms and provisions of the Indenture.
This Security is one of the series designated above.
If any Interest Payment Date, any Redemption Date or the Stated
Maturity shall not be a Business Day (as hereinafter defined), payment
of the amounts due on this Security on such date may be made on the
next succeeding Business Day; and, if such payment is made or duly
provided for on such Business Day, no interest shall accrue on such
amounts for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be, to such
Business Day.
If, as specified above, this Security is redeemable, this
Security is subject to redemption at any time on or after the Initial
Redemption Date specified above, as a whole or in part, at the
election of the Company, at the applicable redemption price (as
described below) plus accrued interest to the date fixed for
redemption. Such redemption price shall be the Initial Redemption
Price specified above for the twelve-month period commencing on the
Initial Redemption Date and shall decline for the twelve-month period
commencing on each anniversary of the Initial Redemption Date by a
percentage of principal amount equal to the Reduction Percentage
specified above until such redemption price is 100% of the principal
amount of this Security to be redeemed.
Notwithstanding the foregoing, the Company may not, prior to the
Redemption Limitation Date, if any, specified above, redeem this
Security as contemplated above as a part of, or in anticipation of,
any refunding operation by the application, directly or indirectly, of
moneys borrowed having an effective interest cost to the Company
(calculated in accordance with generally accepted financial practice)
less than the effective interest cost to the Company (similarly
calculated) of this Security.
[Insert provisions, if any, for redemption pursuant to a sinking
fund or analogous provision or at the option of the Holder.]
Notice of redemption [(other than at the election of the Holder)]
shall be given by mail to Holders of Securities, not less than 30 days
nor more than 60 days prior to the date fixed for redemption, all as
provided in the Indenture. As provided in the Indenture, notice of
redemption at the election of the Company as aforesaid may state that
such redemption shall be conditional upon the receipt by the Trustee
of money sufficient to pay the principal of and premium, if any, and
interest, if any, on this Security on or prior to the date fixed for
such redemption; a notice of redemption so conditioned shall be of no
force or effect if such money is not so received and, in such event,
the Company shall not be required to redeem this Security.
In the event of redemption of this Security in part only, a new
Security or Securities of this series, of like tenor, for the
unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the
principal of this Security may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the Trustee to enter into one or more supplemental
indentures for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, the Indenture with
the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities of all series then Outstanding
under the Indenture, considered as one class; provided, however, that
if there shall be Securities of more than one series Outstanding under
the Indenture and if a proposed supplemental indenture shall directly
affect the rights of the Holders of Securities of one or more, but
less than all, of such series, then the consent only of the Holders of
a majority in aggregate principal amount of the Outstanding Securities
of all series so directly affected, considered as one class, shall be
required; and provided, further, that if the Securities of any series
shall have been issued in more than one Tranche and if the proposed
supplemental indenture shall directly affect the rights of the Holders
of Securities of one or more, but less than all, of such Tranches,
then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all Tranches so
directly affected, considered as one class, shall be required; and
provided, further, that the Indenture permits the Trustee to enter
into one or more supplemental indentures for limited purposes without
the consent of any Holders of Securities. The Indenture also contains
provisions permitting the Holders of a majority in principal amount of
the Securities then Outstanding, on behalf of the Holders of all
Securities, to waive compliance by the Company with certain provisions
of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange therefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon
this Security.
As provided in the Indenture and subject to certain limitations
therein set forth, this Security or any portion of the principal
amount hereof will be deemed to have been paid for all purposes of the
Indenture and to be no longer Outstanding thereunder, and, at the
election of the Company, the Company's entire indebtedness in respect
thereof will be satisfied and discharged, if there has been
irrevocably deposited with the Trustee or any Paying Agent (other than
the Company), in trust, money in an amount which will be sufficient
and/or Eligible Obligations, the principal of and interest on which
when due, without regard to any reinvestment thereof, will provide
moneys which, together with moneys so deposited, will be sufficient to
pay when due the principal of and interest on this Security when due.
The Indenture 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 Person,
to the assumption by such other Person, in certain circumstances, of
all of the obligations of the Company under the Indenture and on the
Securities and to the release and discharge of the Company, in certain
circumstances, from such obligation.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Security Register, upon surrender of this Security for registration of
transfer at the corporate trust office of The Chase Manhattan Bank in
New York, New York or such other office or agency as may be designated
by the Company from time to time, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company
and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new
Securities of this series of authorized denominations and of like
tenor and aggregate principal amount, will be issued to the designated
transferee or transferees.
The Securities of this series are issuable only as registered
Securities, without coupons, and in denominations of $100,000 or any
amount in excess thereof that is an integral multiple of $1,000. As
provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of the same series and
Tranche, of any authorized denominations, as requested by the Holder
surrendering the same, and of like tenor upon surrender of the
Security or Securities to be exchanged at the corporate trust office
of The Chase Manhattan Bank in New York, New York or such other office
or agency as may be designated by the Company from time to time.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due surrender of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered
as the absolute owner hereof for all purposes (subject to Section 307
of the Indenture), whether or not this Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected
by notice to the contrary.
The Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York, except
to the extent that the Trust Indenture Act shall be applicable .
As used herein, "Business Day" means any day, other than a
Saturday or Sunday, which is not a day on which banking institutions
or trust companies in The City of New York, New York or other city in
which is located any office or agency maintained for the payment of
principal, premium, if any, or interest on this Security, are
authorized or required by law, regulation or executive order to remain
closed. All other terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
As provided in the Indenture, no recourse shall be had for the
payment of the principal of or premium, if any, or interest on any
Securities, or any part thereof, or for any claim based thereon or
otherwise in respect thereof, or of the indebtedness represented
thereby, or upon any obligation, covenant or agreement under the
Indenture, against, and no personal liability whatsoever shall attach
to, or be incurred by, any incorporator, shareholder, officer or
director, as such, past, present or future of the Company or of any
predecessor or successor corporation (either directly or through the
Company or a predecessor or successor corporation), whether by virtue
of any constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being
expressly agreed and understood that the Indenture and all the
Securities are solely corporate obligations and that any such personal
liability is hereby expressly waived and released as a condition of,
and as part of the consideration for, the execution of the Indenture
and the issuance of the Securities.
Unless the certificate of authentication hereon has been executed
by the Trustee or an Authenticating Agent by manual signature, this
Security shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
THE WASHINGTON WATER POWER COMPANY
By:__________________________________
[Title]
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:__________________________
__________________________ OR ______________________
__________________________, ______________________,
AS TRUSTEE AS TRUSTEE
By: __________________________ BY:[ ],
Authorized Officer AS AUTHENTICATING AGENT
By:____________________
Authorized Officer
This Security may not be transferred or exchanged, nor may any
purported transfer be registered, except (i) this Security may be
transferred in whole, and appropriate registration of transfer
effected, if such transfer is by Cede & Co., as nominee for The
Depository Trust Company (the "Depositary"), to the Depositary, or by
the Depositary to another nominee thereof, or by any nominee of the
Depositary to any other nominee thereof, or by the Depositary or any
nominee thereof to any successor securities depositary or any nominee
thereof; and (ii) this Security may be exchanged for definitive
Securities registered in the respective names of the beneficial
holders hereof, and thereafter shall be transferable without
restrictions if: (A) the Depositary, or any successor securities
depositary, shall have notified the Company and the Trustee that it is
unwilling or unable to continue to act as securities depositary with
respect to the Securities and the Trustee shall not have been notified
by the Company within ninety (90) days of the identity of a successor
securities depositary with respect to the Securities; (B) the Company
shall have delivered to the Trustee a Company Order to the effect that
the Securities shall be so exchangeable on and after a date specified
therein; or (C)(1) an Event of Default shall have occurred and be
continuing, (2) the Trustee shall have given notice of such Event of
Default pursuant to Section 802 of the Indenture and (3) there shall
have been delivered to the Company and the Trustee an Opinion of
Counsel to the effect that the interests of the beneficial owners of
the Securities in respect thereof will be materially impaired unless
such owners become Holders of definitive Securities.
------------
<PAGE>
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
- --------------------------------------------------------------------------
[please insert social security or other identifying number of assignee]
- --------------------------------------------------------------------------
[please print or typewrite name and address of assignee]
- ----------------------------------------------------------------------
the within Security of THE WASHINGTON WATER POWER COMPANY and does
hereby irrevocably constitute and appoint , Attorney, to transfer said
Security on the books of the within-mentioned Company, with full power
of substitution in the premises.
Dated:__________________
--------------------------------------------------------
Notice: The signature to this assignment must correspond with the name
as written upon the face of the Security in every particular without
alteration or enlargement or any change whatsoever.
<PAGE>
FORM OF FLOATING RATE DEBT SECURITY
(See legend at the end of this Security for
restrictions on transfer and change of form)
THE WASHINGTON WATER POWER COMPANY
_________________, Series _
ORIGINAL INTEREST ACCRUAL DATE: MAXIMUM INTEREST RATE:
STATED MATURITY: MINIMUM INTEREST RATE:
INITIAL INTEREST RATE: INTEREST PAYMENT PERIOD:
BASE RATE: INTEREST PAYMENT DATES:
[-- CD RATE] REGULAR RECORD DATES:
[-- CMT RATE INTEREST RESET PERIOD:
DESIGNATED CMT MATURITY INDEX: INTEREST RESET DATES:
DESIGNATED CMT DOW JONES MARKET PAGE:] RATE DETERMINATION DATES:
[-- COMMERCIAL PAPER RATE] INDEX MATURITY:
[-- FEDERAL FUNDS RATE] SPREAD: (+ BASIS PTS.)
[-- LIBOR -
REPORTING SERVICE: REDEEMABLE: YES __ NO __
[-- LIBOR REUTERS] INITIAL REDEMPTION DATE:
[-- LIBOR DOW JONES MARKET] INITIAL REDEMPTION PRICE:
INDEX CURRENCY:] REDUCTION PERCENTAGE:
[-- PRIME RATE] REDEMPTION LIMITATION DATE:
[-- TREASURY RATE] OTHER PROVISIONS:
OID: YES__ NO__
TOTAL AMOUNT OF OID (%):
YIELD TO MATURITY (%):
INITIAL ACCRUAL
PERIOD OID (%):
(CONSTANT - YIELD METHOD)
------------------------------------
This Security is not a Discount Security within
the meaning of the within-mentioned Indenture.
------------------------------------
Principal Amount Registered No.
$ CUSIP
THE WASHINGTON WATER POWER COMPANY, a corporation organized and
existing under the laws of the State of Washington (herein called the
"Company," which term includes any successor corporation under the
Indenture referred to below), for value received, hereby promises to
pay to
or registered assigns, the principal sum of
DOLLARS
on the Stated Maturity specified above, and to pay interest thereon
from the Original Interest Accrual Date specified above or from the
most recent Interest Payment Date to which interest has been paid or
duly provided for, quarterly, semi-annually or annually, as specified
above for the Interest Payment Period, in arrears on the Interest
Payment Dates specified above in each year, commencing with the
Interest Payment Date next succeeding the Original Interest Accrual
Date specified above, and at Maturity, until the principal hereof is
paid or duly provided for. Except as otherwise provided herein, the
rate of interest to be so paid shall be the Initial Interest Rate
specified above until the first Interest Reset Date specified above
following the Original Interest Accrual Date and thereafter a rate
determined, in accordance with the provisions hereinafter set forth,
by reference to the Base Rate specified above plus or minus the
Spread, if any, specified above or multiplied by the Spread
Multiplier, if any, specified above. The interest so payable, and paid
or duly provided for, on any Interest Payment Date shall, as provided
in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date specified above (whether or not a
Business Day) next preceding such Interest Payment Date.
Notwithstanding the foregoing, (a) if the Original Interest Accrual
Date of this Security is after a Regular Record Date and before the
corresponding Interest Payment Date, interest so payable for the
period from and including the Original Interest Accrual Date to but
excluding such Interest Payment Date shall be paid on the next
succeeding Interest Payment Date to the Holder hereof on the related
Regular Record Date; and (b) interest payable at Maturity shall be
paid to the Person to whom principal shall be paid. Except as
otherwise provided in said Indenture, any such interest not so paid or
duly provided for shall forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the
payment of such Unpaid Interest to be fixed by the Trustee, notice of
which shall be given to Holders of Securities of this series not less
than 15 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be
listed, and upon such notice as may be required by such exchange, all
as more fully provided in said Indenture.
Payment of the principal of and premium, if any, on this Security
and interest hereon at Maturity shall be made upon presentation of
this Security at the Corporate Trust Office of The Chase Manhattan
Bank in New York, New York or at such other office or agency as may be
designated for such purpose by the Company from time to time. Payment
of interest on this Security (other than interest at Maturity) shall
be made by check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register, except that if
such Person shall be a securities depositary, such payment may be made
by such other means in lieu of check, as shall be agreed upon by the
Company, the Trustee and such Person. Payment of the principal of and
premium, if any, and interest on this Security, as aforesaid, shall be
made in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public
and private debts.
This Security is one of a duly authorized issue of securities of
the Company (herein called the "Securities"), issued and issuable in
one or more series under and equally secured by an Indenture, dated as
of November 1, 1997 (such Indenture as originally executed and
delivered and as supplemented or amended from time to time thereafter,
together with any constituent instruments establishing the terms of
particular Securities, being herein called the "Indenture"), between
the Company and The Chase Manhattan Bank, trustee (herein called the
"Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the respective rights,
limitations of rights, duties and immunities of the Company, the
Trustee and the Holders of the Securities thereunder and of the terms
and conditions upon which the Securities are, and are to be,
authenticated and delivered and secured. The acceptance of this
Security shall be deemed to constitute the consent and agreement by
the Holder hereof to all terms and provisions of the Indenture. This
Security is one of the series designated above.
Interest payments on this Security shall be the amount of
interest accrued from and including the last date to which interest
has been paid or duly provided for, or, if no interest has been paid
or duly provided for, from and including the Original Interest Accrual
Date, to but excluding the next succeeding Interest Payment Date;
provided, however, that if the interest rate on this Security is reset
daily or weekly as specified on the face hereof for the Interest Reset
Period, interest payments shall be the amount of interest accrued from
and including the most recent date to which interest has been paid or
duly provided for, or, if no interest has been paid, from the Original
Interest Accrual Date, to, but excluding, the Regular Record Date next
preceding such Interest Payment Date, except that at Maturity the
interest payable shall include interest accrued to but excluding the
date of Maturity.
Accrued interest on this Security shall be calculated by
multiplying the principal amount of this Security by an accrued
interest factor. Such accrued interest factor shall be computed by
adding the interest factors calculated for each day in the Interest
Payment Period for which accrued interest is being calculated. The
interest factor (expressed as a decimal calculated to seven decimal
places without rounding) for each such day shall be computed by
dividing the interest rate applicable to such day by 360 if the Base
Rate is the CD Rate, the Commercial Paper Rate, the Federal Funds
Rate, LIBOR or the Prime Rate, as indicated above, or by the actual
number of days in the year if the Base Rate is the CMT Rate or the
Treasury Rate, as indicated above. For purposes of making the
foregoing calculation, the interest rate in effect on any Interest
Reset Date shall be the applicable rate as reset on such date. Unless
otherwise specified above, all percentages resulting from any
calculation of the rate of interest hereon shall be rounded upwards,
if necessary, to the nearest 1/100,000 of 1% (.0000001), with five
one-millionths of a percentage point rounded upward, and all dollar
amounts used in or resulting from such calculation shall be rounded to
the nearest one-hundredth cent (with .005 of a cent being rounded
upward).
Except as otherwise provided herein, commencing with the first
Interest Reset Date specified above following the Original Interest
Accrual Date and thereafter upon each succeeding Interest Reset Date
specified above, the rate at which interest on this Security is
payable shall be reset daily, weekly, monthly, quarterly,
semi-annually or annually as specified above for the Interest Reset
Period, and such rate, as so reset, shall be effective as of and for
the related Interest Reset Date and for the balance of the related
Interest Reset Period to but excluding the next succeeding Interest
Reset Date. Unless otherwise specified above, the Interest Reset Dates
shall be, if the interest rate on this Security resets daily, each
Business Day; if the interest rate on this Security (unless the Base
Rate is the Treasury Rate) resets weekly, Wednesday of each week; if
the Base Rate specified above is the Treasury Rate and resets weekly,
Tuesday of each week (except as provided below under "Determination of
Treasury Rate"); if the interest rate on this Security resets monthly,
the third Wednesday of each month; if the interest rate on this
Security resets quarterly, the third Wednesday of March, June,
September and December of each year; if the interest rate on this
Security resets semi-annually, the third Wednesday of the two months
of each year specified above; and if the interest rate on this
Security resets annually, the third Wednesday of the month of each
year specified above; provided, however, that the interest rate in
effect for the ten days immediately prior to Maturity will be that in
effect on the tenth day preceding Maturity. If an Interest Reset Date
for this Security would otherwise be a day that is not a Business Day
(as hereinafter defined), such Interest Reset Date shall be postponed
to the next succeeding Business Day, except that, if the Base Rate
specified on the face hereof is LIBOR and such Business Day is in the
next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day.
Anything herein to the contrary notwithstanding, the interest
rate hereon shall not be greater than the Maximum Interest Rate, if
any, or less than the Minimum Interest Rate, if any, specified above.
In addition, the interest rate hereon shall in no event be higher than
the maximum rate permitted by New York law as the same may be modified
by United States law of general application.
Unless otherwise specified above, interest will be payable, if
the interest rate on this Security resets daily, weekly or monthly, on
the third Wednesday of each month or on the third Wednesday of March,
June, September and December of each year, as specified above; if the
interest rate on this Security resets quarterly, on the third
Wednesday of March, June, September and December of each year; if the
interest rate on this Security resets semi-annually, on the third
Wednesday of the two months of each year specified above; and if the
interest rate on this Security resets annually, on the third Wednesday
of the month of each year specified above (each such day being an
"Interest Payment Date").
If any Interest Payment Date other than a Redemption Date or the
Stated Maturity would otherwise be a day that is not a Business Day,
such Interest Payment Date shall be postponed to the next succeeding
Business Day, except that, if the Base Rate specified above is LIBOR
and such next succeeding Business Day is in the next succeeding
calendar month, such payment shall be made on the next preceding
Business Day. If a Redemption Date or the Stated Maturity shall not be
a Business Day, payment of the amounts due on this Security on such
date in respect of principal, premium, if any, and/or interest may be
made on the next succeeding Business Day; and if payment is made or
duly provided for on such Business Day, no interest shall accrue on
such amounts for the period from and after such Redemption Date or
Stated Maturity, as the case may be, to such Business Day.
The Company will appoint, and enter into an agreement with, an
agent (the "Calculation Agent") to calculate the interest rates on
floating rate Securities (including this Security). Unless otherwise
specified above, The Chase Manhattan Bank shall be the Calculation
Agent. All determinations of interest rates by the Calculation Agent
shall, in the absence of manifest error, be conclusive for all
purposes and binding on the Holder hereof.
Subject to applicable provisions of law and except as otherwise
specified herein, on each Interest Reset Date the rate of interest
shall be determined in accordance with the provisions of the
applicable heading below.
[DETERMINATION OF CD RATE.
If the Base Rate specified above is the CD Rate, this Security
shall bear interest for each Interest Reset Period at an interest rate
calculated with reference to the CD Rate, determined as set forth
below, and the Spread or Spread Multiplier, if any, specified above.
The "CD Rate" for each Interest Reset Period shall be determined
by the Calculation Agent on the Calculation Date (as hereinafter
defined) and shall be (a) the rate (expressed as a percentage per
annum) as of the second Business Day prior to the related Interest
Reset Date (a "CD Rate Determination Date") for negotiable
certificates of deposit having the Index Maturity specified above as
published in H.15(519) under the heading "CDs (Secondary Market)", or
(b) if such rate is not so published by 9:00 A.M., New York City time,
on the Calculation Date, the rate as of such CD Rate Determination
Date for negotiable certificates of deposit of the Index Maturity
specified above as published in Composite Quotations (as hereinafter
defined), or (c) if neither of such rates is published by 3:00 P.M.,
New York City time, on the Calculation Date, the arithmetic mean of
the secondary market offered rates as of 10:00 A.M., New York City
time, on such CD Rate Determination Date for certificates of deposit
in the denomination of U.S. $5 million with a remaining maturity
closest to the Index Maturity specified above of three leading nonbank
dealers in negotiable U.S. dollar certificates of deposit in The City
of New York selected by the Calculation Agent, in its discretion
(after consultation with the Company); provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting
as described in clause (c) above, the CD Rate for such Interest Reset
Period shall be the same as the CD Rate for the immediately preceding
Interest Reset Period (or, if there was no such previous Interest
Reset Period, the rate of interest hereon for such Interest Reset
Period shall be the Initial Interest Rate).]
[DETERMINATION OF CMT RATE.
If the Base Rate specified above is the CMT Rate, this Security
shall bear interest for each Interest Reset Period at a rate
calculated with reference to the CMT Rate, determined as set forth
below, and the Spread or Spread Multiplier, if any, specified above.
The "CMT Rate" for each Interest Reset Period shall be determined
by the Calculation Agent on the Calculation Date and shall be the rate
(expressed as a percentage per annum) displayed on the Designated CMT
Dow Jones Market Page (as defined below) under the caption
"...Treasury Constant Maturities... Federal Reserve Board Release
H.15...Mondays Approximately 3:45 p.m." under the column for the
Designated CMT Maturity Index (as defined below) for (a)(i) if the
Designated CMT Dow Jones Market Page is 7055, the second Business Day
prior to the related Interest Reset Date (a "CMT Rate Determination
Date") or (ii) if the Designated CMT Dow Jones Market Page is 7052,
the week or the month, as applicable, ended immediately preceding the
week in which such CMT Rate Determination Date occurs, or (b) if such
rate is no longer displayed on the relevant page, or if not displayed
by 3:00 p.m., New York City time on the Calculation Date, the Treasury
Constant Maturity rate for the Designated CMT Maturity Index as
published in H.15(519), or (c) if such rate is no longer published or,
if not published by 3:00 p.m., New York City time, on the Calculation
Date, the Treasury Constant Maturity rate for the Designated CMT
Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for such CMT Rate Determination Date as
may then be published by either the Board of Governors of the Federal
Reserve System or the United States Department of the Treasury that
the Calculation Agent determines to be comparable to the rate formerly
displayed on the Designated CMT Dow Jones Market Page and published in
H.15(519), or (d) if such information is not provided by 3:00 p.m.,
New York City time, on the Calculation Date, then the CMT Rate for the
CMT Rate Determination Date shall be a yield to maturity, based on the
arithmetic mean of the secondary market closing offer side prices as
of approximately 3:30 p.m., New York City time, on the CMT Rate
Determination Date reported, according to their written records, by
three leading primary United States government securities dealers
(each, a "Reference Dealer") in The City of New York selected by the
Calculation Agent (from five such Reference Dealers selected by the
Calculation Agent, in its discretion (after consultation with the
Company), and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest)), for the most recently issued
direct noncallable fixed rate obligations of the United States
("Treasury notes") with an original maturity of approximately the
Designated CMT Maturity Index and a remaining term to maturity of not
less than such Designated CMT Maturity Index minus one year, or (e) if
the Calculation Agent cannot obtain three such Treasury notes
quotations, a yield to maturity based on the arithmetic mean of the
secondary market offer side prices as of approximately 3:30 p.m., New
York City time, on the CMT Rate Determination Date of three Reference
Dealers in The City of New York (from five such Reference Dealers
selected by the Calculation Agent, in its discretion (after
consultation with the Company), and eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest)), for
Treasury notes with an original maturity of the number of years that
is the next highest to the Designated CMT Maturity Index and a
remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least $100 million, or (f) if three or
four (and not five) of such Reference dealers are quoting as described
above, the arithmetic mean of the offer prices obtained without the
elimination of either the highest or the lowest of such quotes;
provided, however, that if fewer than three Reference Dealers selected
by the Calculation Agent are quoting as described above, the CMT Rate
for such Interest Reset Period will be the same as the CMT Rate for
the immediately preceding Interest Reset Period (or, if there was no
such previous Interest Reset Period, the rate of interest hereon for
such Interest Reset Period shall be the Initial Interest Rate). For
purposes of clause (e) in the first sentence of this paragraph, if two
Treasury notes have remaining terms to maturity equally close to the
Designated CMT Maturity Index, the quotes for the Treasury note with
the shorter remaining term to maturity shall be used.
"Designated CMT Maturity Index" shall be the original period to
maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20
or 30 years) specified above with respect to which the CMT Rate will
be calculated. If no such maturity is specified above, the Designated
CMT Maturity Index shall be 2 years.
"Designated CMT Dow Jones Market Page" means the display on the
Dow Jones Market service (formerly the Dow Jones Telerate Service) on
the page specified above (or any other page as may replace such page
on that service for the purpose of displaying Treasury Constant
Maturities as reported in H.15(519)), for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no such page
is specified above, the page shall be 7052, for the most recent week.]
[DETERMINATION OF COMMERCIAL PAPER RATE.
If the Base Rate specified above is the Commercial Paper Rate,
this Security shall bear interest for each Interest Reset Period at a
rate calculated with reference to the Commercial Paper Rate,
determined as set forth below, and the Spread or Spread Multiplier, if
any, specified above.
The "Commercial Paper Rate" for each Interest Reset Period shall
be determined by the Calculation Agent on the Calculation Date and
shall be (a) the Money Market Yield (as hereinafter defined) as of the
second Business Day prior to the related Interest Reset Date (a
"Commercial Paper Rate Determination Date") of the rate (expressed as
a percentage per annum) for commercial paper having the Index Maturity
specified above, as such rate shall be published in H.15(519) (as
hereinafter defined) under the heading "Commercial Paper -
Nonfinancial", or (b) if such rate is not so published prior to 9:00
a.m., New York City time, on the Calculation Date, the Money Market
Yield as of such Commercial Paper Rate Determination Date of the rate
for commercial paper of the Index Maturity as published in Composite
Quotations (as hereinafter defined) under the heading "Commercial
Paper", or (c) if none of such rates is published by 3:00 p.m., New
York City time, on the Calculation Date, the Money Market Yield of the
arithmetic mean of the offered rates, as of 11:00 a.m., New York City
time, on such Commercial Paper Rate Determination Date, of three
leading dealers in commercial paper in The City of New York selected
by the Calculation Agent, in its discretion (after consultation with
the Company), for commercial paper of the Index Maturity placed for a
nonfinancial issuer whose bond rating is "AA," or the equivalent, from
a nationally recognized statistical rating organization; provided,
however, that if the dealers selected as aforesaid are not quoting
offered rates as described in clause (c) above, the Commercial Paper
Rate for such Interest Reset Period shall be deemed to be the same as
the Commercial Paper Rate for the preceding Interest Reset Period (or,
if there was no such previous Interest Reset Period, the rate of
interest hereon for such Interest Reset Period shall be the Initial
Interest Rate).
"Money Market Yield" shall be a yield calculated in accordance
with the following formula:
Money Market Yield = D x 360 x 100
-------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper
quoted on a bank discount basis and expressed as a decimal, and "M"
refers to the actual number of days in the Index Maturity specified
above.]
[DETERMINATION OF FEDERAL FUNDS RATE.
If the Base Rate specified above is the Federal Funds Rate, this
Security shall bear interest for each Interest Reset Period at a rate
calculated with reference to the Federal Funds Rate, determined as set
forth below, and the Spread or Spread Multiplier, if any, specified
above.
The "Federal Funds Rate" for each Interest Reset Period shall be
determined by the Calculation Agent on the Calculation Date and shall
be (a) the rate (expressed as a percentage per annum) as of the second
Business Day prior to the related Interest Reset Date (a "Federal
Funds Rate Determination Date") for Federal funds as published in
H.15(519) under the heading "Federal Funds (Effective)", or (b) if
such rate is not so published by 9:00 A.M., New York City time, on the
Calculation Date, the rate on such Federal Funds Rate Determination
Date as published in Composite Quotations under the heading "Federal
Funds/Effective Rate", or (c) if neither of such rates is published by
3:00 P.M., New York City time, on the Calculation Date, the arithmetic
mean of the rates for the last transaction in overnight Federal funds
as of 11:00 A.M., New York City time, on such Federal Funds Rate
Determination Date arranged by three leading brokers in Federal Funds
transactions in The City of New York selected by the Calculation
Agent, in its discretion (after consultation with the Company);
provided, however, that if the brokers selected as aforesaid by the
Calculation Agent are not quoting as described in clause (c) above,
the Federal Funds Rate for such Interest Reset Period shall be the
same as the Federal Funds Rate for the immediately preceding Interest
Reset Period (or, if there was no such previous Interest Reset Period,
the rate of interest hereon for such Interest Reset Period shall be
the Initial Interest Rate).]
[DETERMINATION OF LIBOR
If the Base Rate specified above is LIBOR, this Security shall
bear interest for each Interest Reset Period at a rate calculated with
reference to LIBOR, determined as set forth below, and the Spread or
Spread Multiplier, if any, specified above.
"LIBOR" for each Interest Reset Period shall be determined by the
Calculation Agent and shall be:
(a)(i) if "LIBOR Reuters" is specified above as the
Reporting Service, the arithmetic mean of the offered rates
(unless the specified Designated LIBOR Page (as hereinafter
defined) by its terms provides only for a single rate, in which
case such single rate shall be used) for deposits in the Index
Currency specified above in the London interbank market, for the
period of the Index Maturity specified above commencing on the
related Interest Reset Date for such Interest Reset Period, which
appear or appears on the Designated LIBOR Page at approximately
11:00 a.m., London time, on the second London Banking Day (as
hereinafter defined) prior to such Interest Reset Date (a "LIBOR"
Determination Date"), or (ii) if "LIBOR Dow Jones Market" is
specified above as the Reporting Service, the rate for deposits
in the Index Currency, for the period of the Index Maturity
commencing on such LIBOR Determination Date, that appears on the
Designated LIBOR Page at approximately 11:00 a.m., London time,
on such LIBOR Determination Date;
(b) with respect to a LIBOR Determination Date on which
fewer than two offered rates appear (if "LIBOR Reuters" is
specified above as the Reporting Service and calculation of LIBOR
is based on the arithmetic mean of the offered rates) or on which
no rate appears (if the Reporting Service specified above is
either (x) "LIBOR Reuters" and the Designated LIBOR Page by its
terms provides only for a single rate or (y) "LIBOR Dow Jones
Market"), the Calculation Agent shall request the principal
London office of each of four major reference banks in the London
interbank market selected by the Calculation Agent, in its
discretion (after consultation with the Company), to provide the
Calculation Agent with its offered quotations for deposits in the
Index Currency, for the period of the Index Maturity commencing
on the Interest Reset Date for such Interest Reset Period and in
a principal amount equal to an amount of not less than U.S.$1
million (or the equivalent amount in the Index Currency) that is
representative of a single transaction in the Index Currency in
such market at such time, to prime banks in the London interbank
market at approximately 11:00 a.m., London time, on such LIBOR
Determination Date; if at least two such quotations are provided,
LIBOR, in respect of such LIBOR Determination Date, shall be the
arithmetic mean of such quotations;
(c) if fewer than two such quotations are so provided, LIBOR
in respect of such LIBOR Determination Date shall be the
arithmetic mean of the rates quoted by three major banks in The
City of New York selected by the Calculation Agent, in its
discretion (after consultation with the Company), at
approximately 11:00 a.m. on such LIBOR Determination Date, for
loans in the Index Currency to leading European banks, for the
period of the Index Maturity commencing on the Interest Reset
Date for such Interest Reset Period and in a principal amount of
not less than U.S.$1 million (or the equivalent amount in the
Index Currency) that is representative of a single transaction in
the Index Currency in such market at such time; provided,
however, that if fewer than three banks selected as aforesaid by
the Calculation Agent are quoting rates described in this clause
(c), LIBOR for such Interest Reset Period shall be the same as
LIBOR for the immediately preceding Interest Reset Period (or, if
there was no such previous Interest Reset Period, the rate of
interest hereon for such Interest Reset Period shall be the
Initial Interest Rate).
"Designated LIBOR Page" means (x) if "LIBOR Reuters" is specified
above as the Reporting Service, the display on the Reuters monitor
money rates service (or any successor service) for the purpose of
displaying the London interbank rates of major banks for the
applicable Index Currency, or (y) if "LIBOR Dow Jones Market" is
specified above as the Reporting Service, the display on the Dow Jones
Market service (formerly, the Dow Jones Telerate Service), or any
successor service, for the purpose of displaying the London interbank
rates of major banks for the Index Currency. If neither LIBOR Reuters
nor LIBOR Dow Jones Market is specified above as the Reporting
Service, LIBOR shall be determined as if LIBOR Dow Jones Market Page
3750 had been specified.
"Index Currency" means the currency (including any composite
currency) so specified above. If no such currency is so specified
above, "Index Currency" means U.S. dollars.
"Dow Jones Market Page 3750" means the display designated as
"Page 3750" on the Dow Jones Market service (formerly, the Dow Jones
Telerate Service), or such other page as may replace Page 3750 on such
service or such other service or services as may be nominated by the
British Bankers' Association as the information vendor for the purpose
of displaying London interbank offered rates for U.S. dollar
deposits.]
[DETERMINATION OF PRIME RATE.
If the Base Rate specified above is the Prime Rate, this Security
shall bear interest for each Interest Rest Period at a rate calculated
with reference to the Prime Rate, determined as set forth below, and
the Spread or Spread Multiplier, if any, specified above.
The "Prime Rate" for each Interest Reset Period shall be
determined by the Calculation Agent on the Calculation Date and shall
be (a) the rate (expressed as a percentage per annum) as of the second
Business Day prior to the related Interest Reset Date (a "Prime Rate
Determination Date") set forth in H.15(519) opposite the caption "Bank
Prime Loan", or (b) if such rate is not so published prior to 3:00
p.m., New York City time, on the Calculation Date, the arithmetic mean
of the rates publicly announced by each bank named on the Reuters
Screen USPRIME1 Page (as defined below) as such bank's prime rate or
base lending rate as in effect on such Prime Rate Determination Date
as quoted on the Reuters Screen USPRIME1 Page on such Prime Rate
Determination Date or (c) if fewer than four such rates appear on the
Reuters Screen USPRIME1 Page for such Prime Rate Determination Date,
the arithmetic mean of the prime rates quoted on the basis of the
actual number of days in the year divided by 360 as of the close of
business on such Prime Rate Determination Date by at least two of
three major money center banks in The City of New York selected by the
Calculation Agent, in its discretion (after consultation with the
Company), from which quotations are requested; provided, however, that
if fewer than two such prime rates are so quoted by major money center
banks as aforesaid, there shall be included in the group of rates
whose arithmetic mean is to be so determined the prime rates or base
lending rates, as of such Prime Rate Determination Date, of that
number of substitute banks or trust companies organized and doing
business under the laws of the United States, or any State thereof, in
each case having total equity capital of at least U.S. $500 million
and being subject to supervision or examination by Federal or State
authority, selected by the Calculation Agent, in its discretion (after
consultation with the Company), which, when added to the number of
rates provided by major money center banks as aforesaid, shall equal
two.
If in any calendar month the Prime Rate is not published in
H.15(519) and the banks or trust companies selected as aforesaid are
not quoting as described in the preceding paragraph, the "Prime Rate"
for the applicable Interest Reset Period shall be Prime Rate for the
immediately preceding Interest Reset Period (or, if there was no such
previous Interest Reset Period, the rate of interest hereon for such
Interest Reset Period shall be the Initial Interest Rate).
"Reuters Screen USPRIME1 Page" means the display designated as
Page "USPRIME1" on the Reuters monitor money rates service (or such
other page as may replace the USPRIME1 Page on that service for the
purpose of displaying prime rates or base lending rates of major
United States banks).]
[DETERMINATION OF TREASURY RATE
If the Base Rate specified above is the Treasury Rate, this
Security shall bear interest for each Interest Reset Period at a rate
calculated with reference to the Treasury Rate, determined as set
forth below, and the Spread or Spread Multiplier, if any, specified
above.
The "Treasury Rate" for each Interest Reset Period shall be
determined by the Calculation Agent on the Calculation Date and shall
be (a) the rate (expressed as a percentage per annum) for the auction
held on the Treasury Rate Determination Date (as hereinafter defined)
for such Interest Reset Period of direct obligations of the United
States ("Treasury bills") having the Index Maturity specified above,
as such rate shall be published in H.15(519) under the heading "U.S.
Government Securities - Treasury bills - auction average
(investment)", or (b) if such rate is not published prior to 9:00
a.m., New York City time, on the Calculation Date, the auction average
rate (expressed as a bond equivalent on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis) on such
Treasury Rate Determination Date as otherwise announced by the United
States Department of Treasury, or (c) if the results of the auction of
Treasury bills having the Index Maturity are not published or reported
as provided above by 3:00 p.m., New York City time, on the Calculation
Date, or if no such auction is held on such Treasury Rate
Determination Date, a yield to maturity (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) of the arithmetic mean of the secondary
market bid rates, as of approximately 3:30 p.m., New York City time,
on such Treasury Rate Determination Date, of three leading primary
United States government securities dealers selected by the
Calculation Agent, in its discretion (after consultations with the
Company), for the issue of Treasury bills with a remaining maturity
closest to the Index Maturity; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting bid
rates as described in clause (c) above, then the "Treasury Rate" for
such Interest Reset Period shall be deemed to be the same as the
Treasury Rate for the immediately preceding Interest Reset Period (or,
if there was no such previous Interest Reset Period, the rate of
interest hereon for such Interest Reset Period shall be the Initial
Interest Rate).
The "Treasury Rate Determination Date" for each Interest Reset
Period shall be the day of the week in which the Interest Reset Date
for such Interest Reset Period falls on which Treasury bills would
normally be auctioned. (As of the Original Interest Accrual Date,
Treasury bills are normally sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is
normally held on the following Tuesday, except that such auction may
be held on the preceding Friday.) If, as the result of a legal
holiday, an auction is so held on the preceding Friday, such Friday
shall be the Treasury Rate Determination Date pertaining to the
Interest Reset Period commencing in the next succeeding week. If an
auction date shall fall on any day that would otherwise be an Interest
Reset Date for a Treasury Rate Note, then such Interest Reset Date
shall instead be the Business Day immediately following such auction
date.]
If, as specified above, this Security is redeemable, this
Security is subject to redemption at any time on or after the Initial
Redemption Date specified above, as a whole or in part, at the
election of the Company, at the applicable redemption price (as
described below) plus accrued interest to the date fixed for
redemption. Such redemption price shall be the Initial Redemption
Price specified above for the twelve-month period commencing on the
Initial Redemption Date and shall decline for the twelve-month period
commencing on each anniversary of the Initial Redemption Date by a
percentage of principal amount equal to the Reduction Percentage
specified above until such redemption price is 100% of the principal
amount of this Security to be redeemed.
Notwithstanding the foregoing, the Company may not, prior to the
Redemption Limitation Date, if any, specified above, redeem this
Security as contemplated above as a part of, or in anticipation of,
any refunding operation by the application, directly or indirectly, of
moneys borrowed having an effective interest cost to the Company
(calculated in accordance with generally accepted financial practice)
less than the effective interest cost to the Company (similarly
calculated) of this Security.
[Insert provisions, if any, for redemption pursuant to a sinking
fund or analogous provision or at the option of the Holder.]
Notice of redemption [(other than at the election of the Holder)]
shall be given by mail to Holders of Securities, not less than 30 days
nor more than 60 days prior to the date fixed for redemption, all as
provided in the Indenture. As provided in the Indenture, notice of
redemption at the election of the Company as aforesaid may state that
such redemption shall be conditional upon the receipt by the Trustee
of money sufficient to pay the principal of and premium, if any, and
interest, if any, on this Security on or prior to the date fixed for
such redemption; a notice of redemption so conditioned shall be of no
force or effect if such money is not so received and, in such event,
the Company shall not be required to redeem this Security.
In the event of redemption of this Security in part only, a new
Security or Securities of this series, of like tenor, for the
unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the
principal of this Security may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the Trustee to enter into one or more supplemental
indentures for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, the Indenture with
the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities of all series then Outstanding
under the Indenture, considered as one class; provided, however, that
if there shall be Securities of more than one series Outstanding under
the Indenture and if a proposed supplemental indenture shall directly
affect the rights of the Holders of Securities of one or more, but
less than all, of such series, then the consent only of the Holders of
a majority in aggregate principal amount of the Outstanding Securities
of all series so directly affected, considered as one class, shall be
required; and provided, further, that if the Securities of any series
shall have been issued in more than one Tranche and if the proposed
supplemental indenture shall directly affect the rights of the Holders
of Securities of one or more, but less than all, of such Tranches,
then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all Tranches so
directly affected, considered as one class, shall be required; and
provided, further, that the Indenture permits the Trustee to enter
into one or more supplemental indentures for limited purposes without
the consent of any Holders of Securities. The Indenture also contains
provisions permitting the Holders of a majority in principal amount of
the Securities then Outstanding, on behalf of the Holders of all
Securities, to waive compliance by the Company with certain provisions
of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange therefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon
this Security.
As provided in the Indenture and subject to certain limitations
therein set forth, this Security or any portion of the principal
amount hereof will be deemed to have been paid for all purposes of the
Indenture and to be no longer Outstanding thereunder, and, at the
election of the Company, the Company's entire indebtedness in respect
thereof will be satisfied and discharged, if there has been
irrevocably deposited with the Trustee or any Paying Agent (other than
the Company), in trust, money in an amount which will be sufficient
and/or Eligible Obligations, the principal of and interest on which
when due, without regard to any reinvestment thereof, will provide
moneys which, together with moneys so deposited, will be sufficient to
pay when due the principal of and interest on this Security when due.
The Indenture 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 Person,
to the assumption by such other Person, in certain circumstances, of
all of the obligations of the Company under the Indenture and on the
Securities and to the release and discharge of the Company, in certain
circumstances, from such obligation.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Security Register, upon surrender of this Security for registration of
transfer at the corporate trust office of The Chase Manhattan Bank in
New York, New York or such other office or agency as may be designated
by the Company from time to time, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company
and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new
Securities of this series of authorized denominations and of like
tenor and aggregate principal amount, will be issued to the designated
transferee or transferees.
The Securities of this series are issuable only as registered
Securities, without coupons, and in denominations of $100,000 or any
amount in excess thereof that is an integral multiple of $1,000. As
provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of the same series and
Tranche, of any authorized denominations, as requested by the Holder
surrendering the same, and of like tenor upon surrender of the
Security or Securities to be exchanged at the corporate trust office
of The Chase Manhattan Bank in New York, New York or such other office
or agency as may be designated by the Company from time to time.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due surrender of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered
as the absolute owner hereof for all purposes (subject to Section 307
of the Indenture), whether or not this Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected
by notice to the contrary.
The Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York, except
to the extent that the Trust Indenture Act shall be applicable.
As used herein,
(1) "Business Day" means any day, other than a Saturday or
Sunday, which is (a) not a day on which banking institutions
or trust companies in The City of New York, New York or
other city in which is located any office or agency
maintained for the payment of principal of or premium, if
any, or interest on this Security, are authorized or
required by law, regulation or executive order to remain
closed and (b) if the Base Rate specified above is LIBOR, a
London Banking Day. "London Banking Day" means any day on
which dealings in deposits in the Index Currency, if any,
specified above are transacted in the London Interbank
market;
(2) "Calculation Date", with respect to an Interest
Determination Date, means the earlier of (a) the tenth
calendar day after such Interest Determination Date, or, if
such day is not a Business Day, the next succeeding Business
Day, and (b) the Business Day next preceding the related
Interest Payment Date or the Maturity Date, as the case may
be;
(3) "Composite Quotations" means the daily statistical release
entitled "Composite 3:30 p.m. Quotations for U.S. Government
Securities," or any successor release, published by the
Federal Reserve Bank of New York; and
(4) "H.15(519)" means the publication entitled "Statistical
Release H.15(519)," Selected Interest Rates, or any
successor publication, published by the Board of Governors
of the Federal Reserve System.
All other terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
As provided in the Indenture, no recourse shall be had for the
payment of the principal of or premium, if any, or interest on any
Securities, or any part thereof, or for any claim based thereon or
otherwise in respect thereof, or of the indebtedness represented
thereby, or upon any obligation, covenant or agreement under the
Indenture, against, and no personal liability whatsoever shall attach
to, or be incurred by, any incorporator, shareholder, officer or
director, as such, past, present or future of the Company or of any
predecessor or successor corporation (either directly or through the
Company or a predecessor or successor corporation), whether by virtue
of any constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being
expressly agreed and understood that the Indenture and all the
Securities are solely corporate obligations and that any such personal
liability is hereby expressly waived and released as a condition of,
and as part of the consideration for, the execution of the Indenture
and the issuance of the Securities.
Unless the certificate of authentication hereon has been executed
by the Trustee or an Authenticating Agent by manual signature, this
Security shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
THE WASHINGTON WATER POWER COMPANY
By:___________________________________________
[Title]
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:___________________________
___________________________ OR _______________________________
___________________________, _______________________________,
AS TRUSTEE AS TRUSTEE
By:______________________________ BY:[ ],
Authorized Officer AS AUTHENTICATING AGENT
By:___________________________
Authorized Officer
<PAGE>
This Security may not be transferred or exchanged, nor may any
purported transfer be registered, except (i) this Security may be
transferred in whole, and appropriate registration of transfer
effected, if such transfer is by Cede & Co., as nominee for The
Depository Trust Company (the "Depositary"), to the Depositary, or by
the Depositary to another nominee thereof, or by any nominee of the
Depositary to any other nominee thereof, or by the Depositary or any
nominee thereof to any successor securities depositary or any nominee
thereof; and (ii) this Security may be exchanged for definitive
Securities registered in the respective names of the beneficial
holders hereof, and thereafter shall be transferable without
restrictions if: (A) the Depositary, or any successor securities
depositary, shall have notified the Company and the Trustee that it is
unwilling or unable to continue to act as securities depositary with
respect to the Securities and the Trustee shall not have been notified
by the Company within ninety (90) days of the identity of a successor
securities depositary with respect to the Securities; (B) the Company
shall have delivered to the Trustee a Company Order to the effect that
the Securities shall be so exchangeable on and after a date specified
therein; or (C)(1) an Event of Default shall have occurred and be
continuing, (2) the Trustee shall have given notice of such Event of
Default pursuant to Section 802 of the Indenture and (3) there shall
have been delivered to the Company and the Trustee an Opinion of
Counsel to the effect that the interests of the beneficial owners of
the Securities in respect thereof will be materially impaired unless
such owners become Holders of definitive Securities.
------------------------
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
- ----------------------------------------------------------------------
[please insert social security or other identifying number of assignee]
- ----------------------------------------------------------------------
[please print or typewrite name and address of assignee]
- ----------------------------------------------------------------------
the within Security of THE WASHINGTON WATER POWER COMPANY and does
hereby irrevocably constitute and appoint _________________, Attorney,
to transfer said Security on the books of the within-mentioned Company,
with full power of substitution in the premises.
Dated:_____________________
-------------------------------------------
Notice: The signature to this assignment must correspond with the name
as written upon the face of the Security in every particular without
alteration or enlargement or any change whatsoever.
================================================================
THE WASHINGTON WATER POWER COMPANY
______________________
OFFICER'S CERTIFICATE
(Under Section 301 of the Indenture,
dated as of ________, 1997)
Establishing Series of Securities Designated
Medium-Term Notes, Series C
__________________________
__________, 1997
================================================================
<PAGE>
THE WASHINGTON WATER POWER COMPANY
OFFICER'S CERTIFICATE
(Under Section 301 of the Indenture,
dated as of _______, 1997)
I, __________________, a ________________________ of
THE WASHINGTON WATER POWER COMPANY (the "Company"), in accordance
with Section 301 of the Indenture, dated as of _________ __, 1997
(the "Indenture", capitalized terms used herein and not defined
herein having the meanings specified in the Indenture), of the
Company to The Chase Manhattan Bank, trustee (the "Trustee"), do
hereby establish a series of Securities having the terms and
characteristics set forth in this Officer's Certificate.
PART I
Set forth below in this Part I are the terms and
characteristics of the series of Securities established hereby
referred to in clauses (a) through (t) in the second paragraph of
Section 301 of the Indenture (the lettered clauses set forth
herein corresponding to such clauses in said Section 301).
(a) the title of the Securities of such series, being
Series No. 1 under the Indenture, shall be "Medium-Term Notes,
Series C" (the Securities of such series, for purposes of this
Officer's Certificate, being sometimes hereinafter called the
"Notes");
(b) the aggregate principal amount of Notes which may
be authenticated and delivered under the Indenture shall not be
limited;
(c) interest on the Notes shall be payable to the
Person or Persons in whose names the Notes are registered at the
close of business on the Regular Record Date for such interest,
except as otherwise expressly provided in the forms of Note
attached hereto and hereby authorized and approved;
(d) the date or dates on which the principal of the
Notes shall be payable shall be determined at the time of sale of
the Notes, or any Tranche thereof, by the proper officers of the
Company and communicated to the Trustee by Company Order, or by
the proper officers of the Company pursuant to the Administrative
Procedure (the "Administrative Procedure") attached as Annex II
to the Distribution Agreement dated _________ __, 1997 among the
Company, Morgan Stanley & Co. Incorporated, Merrill Lynch & Co.
and Smith Barney Inc.; provided, however, that in no event shall
any Note have a term less than nine months or more than 40 years;
(e) the Notes, or any Tranche thereof, may bear
interest at a fixed rate (any such Note being hereinafter called
a "Fixed Rate Note") or at a floating rate (any such Note being
hereinafter called a "Floating Rate Note"), or they may bear no
interest. There shall be determined by the proper officers of
the Company and communicated to the Trustee by Company Order, or
by the proper officers of the Company pursuant to the
Administrative Procedure, at the time of sale of the Notes or any
Tranche thereof,
(i) in the case of Fixed Rate Notes, the interest rate
or rates (including the interest rate, if any, on overdue
principal, premium or interest, if any) applicable to such
Fixed Rate Notes, or Tranche thereof and
(ii) in the case of Floating Rate Notes, the Initial
Interest Rate, the Base Rate (which shall be the CD Rate,
the CMT Rate, Commercial Paper Rate, the Federal Funds Rate,
LIBOR, the Prime Rate, the Treasury Rate or any other Base
Rate determined at the time of sale of the Notes or Tranche
thereof), the Maximum Interest Rate, if any, the Minimum
Interest Rate, if any, the Interest Payment Period, the
Interest Reset Period, the Interest Reset Dates, the Rate
Determination Dates, the Index Maturity, the Spread, if any,
the Spread Multiplier, if any (each of such terms being
referred to in the form of Floating Rate Note attached
hereto), any other terms relating to the determination of
the interest rates on Floating Rate Notes and the interest
rate, if any, on overdue principal, premium or interest, if
any, applicable to such Floating Rate Notes or Tranche
thereof;
interest shall accrue on any Note from the Original Interest
Accrual Date specified in such Note or the most recent date to
which interest has been paid or duly provided for; the Interest
Payment Dates on the Notes shall be determined at the time of
sale of the Notes of each Tranche by the proper officers of the
Company and communicated to the Trustee by Company Order, or
determined by the proper officers of the Company pursuant to the
Administrative Procedure, and the Regular Record Date with
respect to each such Interest Payment Date shall be the date 15
calendar days immediately preceding such Interest Payment Date
(whether or not a Business Day); and interest on Floating Rate
Notes which employ the Treasury Rate as the Base Rate shall be
computed on the basis of the actual number of days in the year;
(f) the corporate trust office of The Chase Manhattan
Bank in New York, New York shall be the place at which (i) the
principal of, premium, if any, and interest, if any, on the Notes
at Maturity shall be payable upon presentment, interest prior to
Maturity to be paid as specified in the forms of Note attached
hereto, (ii) registration of transfer of the Notes may be
effected, (iii) exchanges of Notes may be effected and (iv)
notices and demands to or upon the Company in respect of the
Notes and the Indenture may be served; and The Chase Manhattan
Bank shall be the Security Registrar and a Paying Agent for the
Notes; provided, however, that the Company reserves the right to
change, by one or more Officer's Certificates supplemental to
this Officer's Certificate, any such place or the Security
Registrar or such Paying Agent; and provided, further, that the
Company reserves the right to designate, by one or more Officer's
Certificates supplemental to this Officer's Certificate, its
principal corporate office in Spokane, Washington as any such
place or itself as the Security Registrar;
(g) the Notes, or any Tranche thereof, shall be
redeemable in whole or in part, at the option of the Company as
and to the extent determined at the time of sale of the Notes or
any Tranche thereof by the proper officers of the Company and
communicated to the Trustee by Company Order, or determined by
the proper officers of the Company pursuant to the Administrative
Procedures;
(h) the obligation, if any, of the Company to redeem
or purchase the Notes or any Tranche thereof pursuant to any
sinking fund or analogous provisions or at the option of a Holder
thereof and the period or periods within which, the price or
prices at which, and the terms and conditions upon which, such
Notes or Tranche thereof shall be redeemed or purchased, in whole
or in part, pursuant to such obligation shall be determined at
the time of sale of the Notes or Tranche thereof by the proper
officers of the Company and communicated to the Trustee by
Company Order, or determined by the proper officers of the
Company pursuant to the Administrative Procedures;
(i) the Notes shall be issued in denominations of
$100,000 or any amount in excess thereof that is an integral
multiple of $1,000 or in such other denominations as shall be
determined at the time of sale of the Notes or Tranche thereof by
the proper officers of the Company and communicated to the
Trustee by Company Order, or determined by the proper officers of
the Company pursuant to the Administrative Procedures;
(j) inapplicable;
(k) inapplicable;
(l) inapplicable;
(m) inapplicable;
(n) inapplicable;
(o) inapplicable;
(p) inapplicable;
(q) the Notes are initially to be issued in global
form, registered in the name of Cede & Co., as nominee for The
Depository Trust Company (the "Depositary"). Such Notes shall
not be transferable or exchangeable, nor shall any purported
transfer be registered, except as follows:
(i) such Notes may be transferred in whole, and
appropriate registration of transfer effected, if such
transfer is by such nominee to the Depositary, or by the
Depositary to another nominee thereof, or by any nominee of
the Depositary to any other nominee thereof, or by the
Depositary or any nominee thereof to any successor
securities depositary or any nominee thereof; and
(ii) such Notes may be exchanged for definitive Notes
registered in the respective names of the beneficial holders
thereof, and thereafter shall be transferable without
restriction, if:
(A) The Depositary, or any successor securities
depositary, shall have notified the Company and the
Trustee that it is unwilling or unable to continue to
act as securities depositary with respect to such Notes
and the Trustee shall not have been notified by the
Company within ninety (90) days of the identity of a
successor securities depositary with respect to such
Notes;
(B) the Company shall have delivered to the Trustee a
Company Order to the effect that such Notes shall be so
exchangeable on and after a date specified therein; or
(C) (I) an Event of Default shall have occurred and be
continuing, (II) the Trustee shall have given notice of
such Event of Default pursuant to Section 802 of the
Indenture and (III) there shall have been delivered to
the Company and the Trustee an Opinion of Counsel to
the effect that the interests of the beneficial owners
of such Notes in respect thereof will be materially
impaired unless such owners become Holders of
definitive Notes;
it being understood that any such registration of transfer or
exchange shall be effected in accordance with Section 305 of the
Indenture;
(r) inapplicable;
(s) no service charge shall be made for the
registration of transfer or exchange of the Notes, or any Tranche
thereof; provided, however, that the Company may require payment
of a sum sufficient to cover any tax or other governmental charge
payable in connection with the exchange or transfer; and
(t) Section 113 of the Indenture shall apply to the
Notes, except to the extent that the provisions of the Floating
Rate Notes hereinafter authorized and approved which are
inconsistent with Section 113, and, to the extent of such
inconsistency, the provisions of the Floating Rate Notes shall
apply in lieu of the provisions of Section 113.
PART II
Set forth below in this Part II are additional terms of
the Medium-Term Notes, Series C, as contemplated by clause (u) in
the second paragraph of Section 301 of the Indenture.
(a) the Notes shall have such further terms as are set
forth in the forms of Fixed Rate Note and Floating Rate Note
attached hereto as Exhibits A and B, respectively;
(b) if the Company shall make any deposit of money
and/or Government Obligations with respect to any Notes, or any
portion of the principal amount thereof, as contemplated by
Section 601 of the Indenture, the Company shall not deliver an
Officer's Certificate described in clause (z) in the first
paragraph of said Section 601 unless the Company shall also
deliver to the Trustee, together with such Officer's Certificate,
either:
(i) an instrument wherein the Company, notwithstanding
the satisfaction and discharge of its indebtedness in
respect of the Notes, shall assume the obligation (which
shall be absolute and unconditional) to irrevocably deposit
with the Trustee or Paying Agent such additional sums of
money, if any, or additional Government Obligations (meeting
the requirements of Section 601), if any, or any combination
thereof, at such time or times, as shall be necessary,
together with the money and/or Government Obligations
theretofore so deposited, to pay when due the principal of
and premium, if any, and interest due and to become due on
such Notes or portions thereof, all in accordance with and
subject to the provisions of said Section 601; provided,
however, that such instrument may state that the obligation
of the Company to make additional deposits as aforesaid
shall be subject to the delivery to the Company by the
Trustee of a notice asserting the deficiency accompanied by
an opinion of an independent public accountant of nationally
recognized standing showing the calculation thereof (which
opinion shall be obtained at the expense of the Company); or
(ii) an Opinion of Counsel to the effect that the
Holders of such Notes, or portions of the principal amount
thereof, will not recognize income, gain or loss for United
States federal income tax purposes as a result of the
satisfaction and discharge of the Company's indebtedness in
respect thereof and will be subject to United States federal
income tax on the same amounts, at the same times and in the
same manner as if such satisfaction and discharge had not
been effected; and
(c)(i) So long as any of the Notes shall remain
Outstanding, the Company shall not create, issue, incur or assume
any Secured Debt other than Permitted Secured Debt without the
consent of the Holders of a majority in principal amount of the
Outstanding Securities of all series (including the Notes) and
Tranches with respect to which this covenant is specified as
contemplated by Section 301, considered as one class (all such
Securities being hereinafter called the "Benefitted Securities").
(ii) The provisions of clause (c)(i) above shall not
prohibit the creation, issuance, incurrence or assumption of any
Secured Debt if either
(A) the Company shall make effective provision whereby
all Benefitted Securities then Outstanding shall be secured
equally and ratably with such Secured Debt; or
(B) the Company shall deliver to the Trustee bonds,
notes or other evidences of indebtedness secured by the Lien
which secures such Secured Debt (hereinafter called "Secured
Obligations") (I) in an aggregate principal amount equal to
the aggregate principal amount of the Benefitted Securities
then Outstanding, (II) maturing (or being subject to
mandatory redemption) on such dates and in such principal
amounts that, at each Stated Maturity of the Outstanding
Benefitted Securities, there shall mature (or be redeemed)
Secured Obligations equal in principal amount to the
Securities then to mature and (III) containing, in addition
to any mandatory redemption provisions applicable to all
Secured Obligations outstanding under such Lien and any
mandatory redemption provisions contained therein pursuant
to clause (II) above, mandatory redemption provisions
correlative to the provisions, if any, for the mandatory
redemption (pursuant to a sinking fund or otherwise) of the
Benefitted Securities or for the redemption thereof at the
option of the Holder, as well as a provision for mandatory
redemption upon an acceleration of the maturity of all
Outstanding Benefitted Securities following an Event of
Default (such mandatory redemption to be rescinded upon the
rescission of such acceleration); it being expressly
understood that such Secured Obligations (X) may, but need
not, bear interest, (Y) may, but need not, contain
provisions for the redemption thereof at the option of the
issuer, any such redemption to be made at a redemption price
or prices not less than the principal amount thereof and (Z)
shall be held by the Trustee for the benefit of the Holders
of all Benefitted Securities from time to time Outstanding
subject to such terms and conditions relating to surrender
to the Company, transfer restrictions, voting, application
of payments of principal and interest and other matters as
shall be set forth in an indenture supplemental hereto
specifically providing for the delivery to the Trustee of
such Secured Obligations.
(iii) If the Company shall elect either of the
alternatives described in clause (c)(ii) above, the Company shall
deliver to the Trustee:
(A) an indenture supplemental to the Indenture (I)
together with appropriate inter-creditor arrangements,
whereby all Securities then Outstanding shall be secured by
the Lien referred to in clause (c)(ii) above equally and
ratably with all other indebtedness secured by such Lien or
(II) providing for the delivery to the Trustee of Secured
Obligations;
(B) an Officer's Certificate (I) stating that, to the
knowledge of the signer, (1) no Event of Default has
occurred and is continuing and (2) no event has occurred and
is continuing which entitles the secured party under such
Lien to accelerate the maturity of the indebtedness
outstanding thereunder and (II) stating the aggregate
principal amount of indebtedness issuable, and then proposed
to be issued, under and secured by such Lien;
(C) an Opinion of Counsel (I) if the Benefitted
Securities then Outstanding are to be secured by such Lien,
to the effect that all such Securities then Outstanding are
entitled to the benefit of such Lien equally and ratably
with all other indebtedness outstanding under such Lien or
(II) if Secured Obligations are to be delivered to the
Trustee, to the effect that such Secured Obligations have
been duly issued under such Lien and constitute valid
obligations, entitled to the benefit of such Lien equally
and ratably with all other indebtedness then outstanding
under such Lien.
(iv) For all purposes of this clause (c), except as
otherwise expressly provided or unless the context otherwise
requires:
"DEBT", with respect to any Person, means (A)
indebtedness of such Person for borrowed money evidenced by
a bond, debenture, note or other written instrument or
agreement by which such Person is obligated to repay such
borrowed money and (B) any guaranty by such Person of any
such indebtedness of another Person. "Debt" does not
include, among other things, (X) indebtedness of such Person
under any installment sale or conditional sale agreement or
any other agreement relating to indebtedness for the
deferred purchase price of property or services, (Y)
obligations of such Person under any lease agreement
(including any lease intended as security), whether or not
such obligations are required to be capitalized on the
balance sheet of such Person under generally accepted
accounting principles, or (Z) liabilities secured by any
Lien on any property owned by such Person if and to the
extent that such Person has not assumed or otherwise become
liable for the payment thereof.
"EXCEPTED PROPERTY" means
(A) all cash on hand or in banks or other financial
institutions, deposit accounts, shares of stock, interests
in general or limited partnerships, bonds, notes, other
evidences of indebtedness and other securities, of
whatsoever kind and nature, not hereafter paid or delivered
to, deposited with or held by the Trustee hereunder or
required so to be;
(B) all contracts, leases, operating agreements and
other agreements of whatsoever kind and nature; all contract
rights, bills, notes and other instruments and chattel paper
(except to the extent that any of the same constitute
securities, in which case they are separately excepted from
the operation of this clause (w) under clause (A) above);
all revenues, income and earnings, all accounts, accounts
receivable and unbilled revenues, and all rents, tolls,
issues, products and profits, claims, credits, demands and
judgments; all governmental and other licenses, permits,
franchises, consents and allowances; and all patents, patent
licenses and other patent rights, patent applications, trade
names, trademarks, copyrights, claims, credits, choses in
action and other intangible property and general intangibles
including, but not limited to, computer software;
(C) all automobiles, buses, trucks, truck cranes,
tractors, trailers and similar vehicles and movable
equipment; all rolling stock, rail cars and other railroad
equipment; all vessels, boats, barges and other marine
equipment; all airplanes, helicopters, aircraft engines and
other flight equipment; all parts, accessories and supplies
used in connection with any of the foregoing; and all
personal property of such character that the perfection of a
security interest therein or other Lien thereon is not
governed by the Uniform Commercial Code as in effect in the
jurisdiction in which such property is located;
(D) all goods, stock in trade, wares, merchandise and
inventory held for the purpose of sale or lease in the
ordinary course of business; all materials, supplies,
inventory and other items of personal property which are
consumable (otherwise than by ordinary wear and tear) in
their use in the operation of any property of the Company;
all fuel, including nuclear fuel, whether or not any such
fuel is in a form consumable in the operation of any
property of the Company, including separate components of
any fuel in the forms in which such components exist at any
time before, during or after the period of the use thereof
as fuel; all hand and other portable tools and equipment;
all furniture and furnishings; and computers and data
processing, data storage, data transmission,
telecommunications and other facilities, equipment and
apparatus, which, in any case, are used primarily for
administrative or clerical purposes or are otherwise not
necessary for the operation or maintenance of the
facilities, machinery, equipment or fixtures of the Company
for (I) the generation, transmission or distribution of
electric energy, (II) the transmission, storage or
distribution of gas or (III) the appropriation, storage,
transmission or distribution of water;
(E) all coal, ore, gas, oil and other minerals and all
timber, and all rights and interests in any of the
foregoing, whether or not such minerals or timber shall have
been mined or extracted or otherwise separated from the
land; and all electric energy, gas (natural or artificial),
steam, water and other products generated, produced,
manufactured, purchased or otherwise acquired by the
Company;
(F) all real property, leaseholds, gas rights, wells,
gathering, tap or other pipe lines, or facilities, equipment
or apparatus, in any case used or to be used primarily for
the production or gathering of natural gas; and
(G) all property which is the subject of a lease
agreement designating the Company as lessee and all right,
title and interest of the Company in and to such property
and in, to and under such lease agreement, whether or not
such lease agreement is intended as security.
"LIEN" means any mortgage, deed of trust, pledge,
security interest, conditional sale or other title retention
agreement or any lease in the nature thereof.
"PERMITTED SECURED DEBT" means, as of any particular
time, any of the following:
(A) Secured Debt which matures less than one year from
the date of the issuance or incurrence thereof and is not
extendible at the option of the issuer; and any refundings,
refinancings and/or replacements of any such Secured Debt by
or with similar Secured Debt;
(B) Secured Debt secured by Purchase Money Liens or
any other Liens existing or placed upon property at the time
of, or within one hundred eighty (180) days after, the
acquisition thereof by the Company, and any refundings,
refinancings and/or replacements of any such Secured Debt;
provided, however, that no such Purchase Money Lien or other
Lien shall extend to or cover any property of the Company
other than (I) the property so acquired and improvements,
extensions and additions to such property and renewals,
replacements and substitutions of or for such property or
any part or parts thereof and (II) with respect to Purchase
Money Liens, other property subsequently acquired by the
Company;
(C) Secured Debt relating to governmental obligations
the interest on which is not included in gross income for
purposes of federal income taxation pursuant to Section 103
of the Internal Revenue Code of 1986, as amended (or any
successor provision of law), for the purpose of financing or
refinancing, in whole or in part, costs of acquisition or
construction of property to be used by the Company, to the
extent that the Lien which secures such Secured Debt is
required either by applicable law or by the issuer of such
governmental obligations or is otherwise necessary in order
to establish or maintain such exclusion from gross income;
and any refundings, refinancings and/or replacements of any
such Secured Debt by or with similar Secured Debt;
(D) Secured Debt (I) which is related to the
construction or acquisition of property not previously owned
by the Company or (II) which is related to the financing of
a project involving the development or expansion of property
of the Company and (III) in either case, the obligee in
respect of which has no recourse to the Company or any
property of the Company other than the property constructed
or acquired with the proceeds of such transaction or the
project financed with the proceeds of such transaction (or
the proceeds of such property or such project); and any
refundings, refinancings and/or replacements of any such
Secured Debt by or with Secured Debt described in clause
(III) above;
(E) Secured Debt permitted under clause (c)(ii) above;
and
(F) in addition to the Permitted Secured Debt
described in clauses (A) through (E) above, Secured Debt not
otherwise permitted in this clause (c) in an aggregate
principal amount not exceeding 10% of the total assets of
the Company and its consolidated subsidiaries, as shown on
the latest balance sheet of the Company and its consolidated
subsidiaries, audited by independent certified public
accountants, dated prior to the date of the creation,
issuance, incurrence or assumption of such Secured Debt.
"PURCHASE MONEY LIEN" means, with respect to any
property being acquired by the Company, a Lien on such
property which
(A) is taken or retained by the transferor of such
property to secure all or part of the purchase price
thereof;
(B) is granted to one or more Persons other than the
transferor which, by making advances or incurring an
obligation, give value to enable the grantor of such Lien to
acquire rights in or the use of such property;
(C) is held by a trustee or agent for the benefit of
one or more Persons described in clause (A) or (B) above,
provided that such Lien may be held, in addition, for the
benefit of one or more other Persons which shall have
theretofore given, or may thereafter give, value to or for
the benefit or account of the grantor of such Lien for one
or more other purposes; or
(D) otherwise constitutes a purchase money mortgage or
a purchase money security interest under applicable law;
and, without limiting the generality of the foregoing, for
purposes of this Indenture, the term Purchase Money Lien
shall be deemed to include any Lien described above whether
or not such Lien (X) shall permit the issuance or other
incurrence of additional indebtedness secured by such Lien
on such property, (Y) shall permit the subjection to such
Lien of additional property and the issuance or other
incurrence of additional indebtedness on the basis thereof
and/or (Z) shall have been granted prior to the acquisition
of such property, shall attach to or otherwise cover
property other than the property being acquired and/or shall
secure obligations issued prior and/or subsequent to the
issuance of the obligations delivered in connection with
such acquisition.
"SECURED DEBT", with respect to any Person, means Debt
created, issued, incurred or assumed by such Person which is
secured by a Lien upon any property (other than Excepted
Property) of the Company, real, personal or mixed, of
whatever kind or nature and wherever located, whether owned
at the date of the initial authentication and delivery of
the Notes, or thereafter acquired.
____________
<PAGE>
IN WITNESS WHEREOF, I have executed this Officer's
Certificate this ___ day of ____, 1997.
______________________________
Name:
Title:
<PAGE>
FORM OF FIXED RATE NOTE
(See legend at the end of this Security for
restrictions on transfer and change of form)
THE WASHINGTON WATER POWER COMPANY
Medium-Term Notes, Series C
Original Interest Accrual Date: Redeemable: Yes__ No__
Stated Maturity: Initial Redemption Date:
Interest Rate: Initial Redemption Price:
Interest Payment Dates: Reduction Percentage:
Regular Record Dates: Redemption Limitation Date:
Other Provisions:
OID: Yes__ No__
Total Amount of OID (%):
Yield to Maturity (%):
Initial Accrual
Period OID (%):
(Constant Yield Method)
This Security is not a Discount Security
within the meaning of the within-mentioned Indenture.
-------------------------------
Principal Amount Registered No.
$ CUSIP
THE WASHINGTON WATER POWER COMPANY, a corporation organized
and existing under the laws of the State of Washington (herein
called the "Company," which term includes any successor
corporation under the Indenture referred to below), for value
received, hereby promises to pay to
or registered assigns, the principal sum of
DOLLARS
on the Stated Maturity specified above, and to pay interest
thereon from the Original Interest Accrual Date specified above
or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semi-annually in arrears on
the Interest Payment Dates specified above in each year,
commencing with the Interest Payment Date next succeeding the
Original Interest Accrual Date specified above, and at Maturity,
at the Interest Rate per annum specified above, until the
principal hereof is paid or duly provided for. The interest so
payable, and paid or duly provided for, on any Interest Payment
Date shall, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular
Record Date specified above (whether or not a Business Day) next
preceding such Interest Payment Date. Notwithstanding the
foregoing, (a) if the Original Interest Accrual Date of this
Security is after a Regular Record Date and before the
corresponding Interest Payment Date, interest so payable for the
period from and including the Original Interest Accrual Date to
but excluding such Interest Payment Date shall be paid on the
next succeeding Interest Payment Date to the Holder hereof on the
related Regular Record Date; and (b) interest payable at Maturity
shall be paid to the Person to whom principal shall be paid.
Except as otherwise provided in said Indenture, any such interest
not so paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date and may either
be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on
a Special Record Date for the payment of such Unpaid Interest to
be fixed by the Trustee, notice of which shall be given to
Holders of Securities of this series not less than 15 days prior
to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be
listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture.
Payment of the principal of and premium, if any, on this
Security and interest hereon at Maturity shall be made upon
presentation of this Security at the Corporate Trust Office of
The Chase Manhattan Bank in New York, New York, or at such other
office or agency as may be designated for such purpose by the
Company from time to time. Payment of interest on this Security
(other than interest at Maturity) shall be made by check mailed
to the address of the Person entitled thereto as such address
shall appear in the Security Register, except that if such Person
shall be a securities depositary, such payment may be made by
such other means in lieu of check, as shall be agreed upon by the
Company, the Trustee and such Person. Payment of the principal
of and premium, if any, and interest on this Security, as
aforesaid, shall be made in such coin or currency of the United
States of America as at the time of payment shall be legal tender
for the payment of public and private debts.
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and issuable in one or more series under and equally
secured by an Indenture, dated as of ___________ __, 1997 (such
Indenture as originally executed and delivered and as
supplemented or amended from time to time thereafter, together
with any constituent instruments establishing the terms of
particular Securities, being herein called the "Indenture"),
between the Company and The Chase Manhattan Bank, trustee (herein
called the "Trustee," which term includes any successor trustee
under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description
of the respective rights, limitations of rights, duties and
immunities of the Company, the Trustee and the Holders of the
Securities thereunder and of the terms and conditions upon which
the Securities are, and are to be, authenticated and delivered
and secured. The acceptance of this Security shall be deemed to
constitute the consent and agreement by the Holder hereof to all
of the terms and provisions of the Indenture. This Security is
one of the series designated above.
If any Interest Payment Date, any Redemption Date or the
Stated Maturity shall not be a Business Day (as hereinafter
defined), payment of the amounts due on this Security on such
date may be made on the next succeeding Business Day; and, if
such payment is made or duly provided for on such Business Day,
no interest shall accrue on such amounts for the period from and
after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, to such Business Day.
If, as specified above, this Security is redeemable, this
Security is subject to redemption at any time on or after the
Initial Redemption Date specified above, as a whole or in part,
at the election of the Company, at the applicable redemption
price (as described below) plus accrued interest to the date
fixed for redemption. Such redemption price shall be the Initial
Redemption Price specified above for the twelve-month period
commencing on the Initial Redemption Date and shall decline for
the twelve-month period commencing on each anniversary of the
Initial Redemption Date by a percentage of principal amount equal
to the Reduction Percentage specified above until such redemption
price is 100% of the principal amount of this Security to be
redeemed.
Notwithstanding the foregoing, the Company may not, prior to
the Redemption Limitation Date, if any, specified above, redeem
this Security as contemplated above as a part of, or in
anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an effective
interest cost to the Company (calculated in accordance with
generally accepted financial practice) less than the effective
interest cost to the Company (similarly calculated) of this
Security.
[Insert provisions, if any, for redemption pursuant to a
sinking fund or analogous provision or at the option of the
Holder.]
Notice of redemption [(other than at the election of the
Holder)] shall be given by mail to Holders of Securities, not
less than 30 days nor more than 60 days prior to the date fixed
for redemption, all as provided in the Indenture. As provided in
the Indenture, notice of redemption at the election of the
Company as aforesaid may state that such redemption shall be
conditional upon the receipt by the Trustee of money sufficient
to pay the principal of and premium, if any, and interest, if
any, on this Security on or prior to the date fixed for such
redemption; a notice of redemption so conditioned shall be of no
force or effect if such money is not so received and, in such
event, the Company shall not be required to redeem this Security.
In the event of redemption of this Security in part only, a
new Security or Securities of this series, of like tenor, for the
unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the
principal of this Security may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the Trustee to enter into one or more supplemental
indentures for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of,
the Indenture with the consent of the Holders of not less than a
majority in aggregate principal amount of the Securities of all
series then Outstanding under the Indenture, considered as one
class; provided, however, that if there shall be Securities of
more than one series Outstanding under the Indenture and if a
proposed supplemental indenture shall directly affect the rights
of the Holders of Securities of one or more, but less than all,
of such series, then the consent only of the Holders of a
majority in aggregate principal amount of the Outstanding
Securities of all series so directly affected, considered as one
class, shall be required; and provided, further, that if the
Securities of any series shall have been issued in more than one
Tranche and if the proposed supplemental indenture shall directly
affect the rights of the Holders of Securities of one or more,
but less than all, of such Tranches, then the consent only of the
Holders of a majority in aggregate principal amount of the
Outstanding Securities of all Tranches so directly affected,
considered as one class, shall be required; and provided,
further, that the Indenture permits the Trustee to enter into one
or more supplemental indentures for limited purposes without the
consent of any Holders of Securities. The Indenture also
contains provisions permitting the Holders of a majority in
principal amount of the Securities then Outstanding, on behalf of
the Holders of all Securities, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange therefor or in
lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As provided in the Indenture and subject to certain
limitations therein set forth, this Security or any portion of
the principal amount hereof will be deemed to have been paid for
all purposes of the Indenture and to be no longer Outstanding
thereunder, and, at the election of the Company, the Company's
entire indebtedness in respect thereof will be satisfied and
discharged, if there has been irrevocably deposited with the
Trustee or any Paying Agent (other than the Company), in trust,
money in an amount which will be sufficient and/or Eligible
Obligations, the principal of and interest on which when due,
without regard to any reinvestment thereof, will provide moneys
which, together with moneys so deposited, will be sufficient to
pay when due the principal of and interest on this Security when
due.
The Indenture 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 Person, to the assumption by such other Person, in
certain circumstances, of all of the obligations of the Company
under the Indenture and on the Securities and to the release and
discharge of the Company, in certain circumstances, from such
obligation.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is
registrable in the Security Register, upon surrender of this
Security for registration of transfer at the corporate trust
office of The Chase Manhattan Bank in New York, New York or such
other office or agency as may be designated by the Company from
time to time, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and
the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more
new Securities of this series of authorized denominations and of
like tenor and aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities of this series are issuable only as
registered Securities, without coupons, and in denominations of
$100,000 or any amount in excess thereof that is an integral
multiple of $1,000. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series
are exchangeable for a like aggregate principal amount of
Securities of the same series and Tranche, of any authorized
denominations, as requested by the Holder surrendering the same,
and of like tenor upon surrender of the Security or Securities to
be exchanged at the corporate trust office of The Chase Manhattan
Bank in New York, New York or such other office or agency as may
be designated by the Company from time to time.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due surrender of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security
is registered as the absolute owner hereof for all purposes
(subject to Section 307 of the Indenture), whether or not this
Security be overdue, and neither the Company, the Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York,
except to the extent that the Trust Indenture Act shall be
applicable.
As used herein, "Business Day" means any day, other than a
Saturday or Sunday, which is not a day on which banking
institutions or trust companies in The City of New York, New York
or other city in which is located any office or agency maintained
for the payment of principal, premium, if any, or interest on
this Security, are authorized or required by law, regulation or
executive order to remain closed. All other terms used in this
Security which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
As provided in the Indenture, no recourse shall be had for
the payment of the principal of or premium, if any, or interest
on any Securities, or any part thereof, or for any claim based
thereon or otherwise in respect thereof, or of the indebtedness
represented thereby, or upon any obligation, covenant or
agreement under the Indenture, against, and no personal liability
whatsoever shall attach to, or be incurred by, any incorporator,
shareholder, officer or director, as such, past, present or
future of the Company or of any predecessor or successor
corporation (either directly or through the Company or a
predecessor or successor corporation), whether by virtue of any
constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being
expressly agreed and understood that the Indenture and all the
Securities are solely corporate obligations and that any such
personal liability is hereby expressly waived and released as a
condition of, and as part of the consideration for, the execution
of the Indenture and the issuance of the Securities.
Unless the certificate of authentication hereon has been
executed by the Trustee or an Authenticating Agent by manual
signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed.
THE WASHINGTON WATER POWER COMPANY
By:_______________________________
[Title]
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
Dated: __________________________
___________________________ OR ________________________
__________________________, ________________________,
AS TRUSTEE AS TRUSTEE
By:___________________________ BY:[ ],
Authorized Officer AS AUTHENTICATING AGENT
By:______________________
Authorized Officer
This Security may not be transferred or exchanged, nor may
any purported transfer be registered, except (i) this Security
may be transferred in whole, and appropriate registration of
transfer effected, if such transfer is by Cede & Co., as nominee
for The Depository Trust Company (the "Depositary"), to the
Depositary, or by the Depositary to another nominee thereof, or
by any nominee of the Depositary to any other nominee thereof, or
by the Depositary or any nominee thereof to any successor
securities depositary or any nominee thereof; and (ii) this
Security may be exchanged for definitive Securities registered in
the respective names of the beneficial holders hereof, and
thereafter shall be transferable without restrictions if: (A) the
Depositary, or any successor securities depositary, shall have
notified the Company and the Trustee that it is unwilling or
unable to continue to act as securities depositary with respect
to the Securities and the Trustee shall not have been notified by
the Company within ninety (90) days of the identity of a
successor securities depositary with respect to the Securities;
(B) the Company shall have delivered to the Trustee a Company
Order to the effect that the Securities shall be so exchangeable
on and after a date specified therein; or (C)(1) an Event of
Default shall have occurred and be continuing, (2) the Trustee
shall have given notice of such Event of Default pursuant to
Section 802 of the Indenture and (3) there shall have been
delivered to the Company and the Trustee an Opinion of Counsel to
the effect that the interests of the beneficial owners of the
Securities in respect thereof will be materially impaired unless
such owners become Holders of definitive Securities.
___________________
<PAGE>
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
_________________________________________________________________
[please insert social security or other identifying number of
assignee]
_________________________________________________________________
[please print or typewrite name and address of assignee]
_________________________________________________________________
the within Security of THE WASHINGTON WATER POWER COMPANY and
does hereby irrevocably constitute and appoint
______________________, Attorney, to transfer said Security on
the books of the within-mentioned Company, with full power of
substitution in the premises.
Dated: ___________________________
______________________________
Notice: The signature to this assignment must correspond with
the name as written upon the face of the Security in every
particular without alteration or enlargement or any change
whatsoever.
<PAGE>
FORM OF FLOATING RATE NOTE
(See legend at the end of this Security for
restrictions on transfer and change of form)
THE WASHINGTON WATER POWER COMPANY
Medium-Term Notes, Series C
ORIGINAL INTEREST ACCRUAL DATE: MAXIMUM INTEREST RATE:
STATED MATURITY: MINIMUM INTEREST RATE:
INITIAL INTEREST RATE: INTEREST PAYMENT PERIOD:
BASE RATE: INTEREST PAYMENT DATES:
-- CD RATE REGULAR RECORD DATES:
-- CMT RATE INTEREST RESET PERIOD:
DESIGNATED CMT MATURITY INDEX: INTEREST RESET DATES:
DESIGNATED CMT DOW JONES MARKET
PAGE: RATE DETERMINATION DATES:
-- COMMERCIAL PAPER RATE INDEX MATURITY:
-- FEDERAL FUNDS RATE SPREAD: (+ BASIS PTS.)
-
-- LIBOR
REPORTING SERVICE: REDEEMABLE: YES NO
-- --
-- LIBOR REUTERS INITIAL REDEMPTION DATE:
-- LIBOR DOW JONES MARKET INITIAL REDEMPTION PRICE:
INDEX CURRENCY: REDUCTION PERCENTAGE:
-- PRIME RATE REDEMPTION LIMITATION DATE:
-- TREASURY RATE OTHER PROVISIONS:
OID: YES NO
-- --
TOTAL AMOUNT OF OID (%):
YIELD TO MATURITY (%):
INITIAL ACCRUAL
PERIOD OID (%):
(CONSTANT - YIELD METHOD)
------------------------------------
This Security is not a Discount Security
within the meaning of the within-mentioned Indenture.
------------------------------------
Principal Amount Registered No.
$ CUSIP
THE WASHINGTON WATER POWER COMPANY, a corporation organized
and existing under the laws of the State of Washington (herein
called the "Company," which term includes any successor
corporation under the Indenture referred to below), for value
received, hereby promises to pay to
or registered assigns, the principal sum of
DOLLARS
on the Stated Maturity specified above, and to pay interest
thereon from the Original Interest Accrual Date specified above
or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, quarterly, semi-annually or
annually, as specified above for the Interest Payment Period, in
arrears on the Interest Payment Dates specified above in each
year, commencing with the Interest Payment Date next succeeding
the Original Interest Accrual Date specified above, and at
Maturity, until the principal hereof is paid or duly provided
for. Except as otherwise provided herein, the rate of interest
to be so paid shall be the Initial Interest Rate specified above
until the first Interest Reset Date specified above following the
Original Interest Accrual Date and thereafter a rate determined,
in accordance with the provisions hereinafter set forth, by
reference to the Base Rate specified above plus or minus the
Spread, if any, specified above or multiplied by the Spread
Multiplier, if any, specified above. The interest so payable,
and paid or duly provided for, on any Interest Payment Date
shall, as provided in such Indenture, be paid to the Person in
whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date
specified above (whether or not a Business Day) next preceding
such Interest Payment Date. Notwithstanding the foregoing, (a)
if the Original Interest Accrual Date of this Security is after a
Regular Record Date and before the corresponding Interest Payment
Date, interest so payable for the period from and including the
Original Interest Accrual Date to but excluding such Interest
Payment Date shall be paid on the next succeeding Interest
Payment Date to the Holder hereof on the related Regular Record
Date; and (b) interest payable at Maturity shall be paid to the
Person to whom principal shall be paid. Except as otherwise
provided in said Indenture, any such interest not so paid or duly
provided for shall forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on a Special Record Date
for the payment of such Unpaid Interest to be fixed by the
Trustee, notice of which shall be given to Holders of Securities
of this series not less than 15 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully
provided in said Indenture.
Payment of the principal of and premium, if any, on this
Security and interest hereon at Maturity shall be made upon
presentation of this Security at the Corporate Trust Office of
The Chase Manhattan Bank in New York, New York or at such other
office or agency as may be designated for such purpose by the
Company from time to time. Payment of interest on this Security
(other than interest at Maturity) shall be made by check mailed
to the address of the Person entitled thereto as such address
shall appear in the Security Register, except that if such Person
shall be a securities depositary, such payment may be made by
such other means in lieu of check, as shall be agreed upon by the
Company, the Trustee and such Person. Payment of the principal
of and premium, if any, and interest on this Security, as
aforesaid, shall be made in such coin or currency of the United
States of America as at the time of payment shall be legal tender
for the payment of public and private debts.
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and issuable in one or more series under and equally
secured by an Indenture, dated as of November 1, 1997 (such
Indenture as originally executed and delivered and as
supplemented or amended from time to time thereafter, together
with any constituent instruments establishing the terms of
particular Securities, being herein called the "Indenture"),
between the Company and The Chase Manhattan Bank, trustee (herein
called the "Trustee," which term includes any successor trustee
under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description
of the respective rights, limitations of rights, duties and
immunities of the Company, the Trustee and the Holders of the
Securities thereunder and of the terms and conditions upon which
the Securities are, and are to be, authenticated and delivered
and secured. The acceptance of this Security shall be deemed to
constitute the consent and agreement by the Holder hereof to all
terms and provisions of the Indenture. This Security is one of
the series designated above.
Interest payments on this Security shall be the amount of
interest accrued from and including the last date to which
interest has been paid or duly provided for, or, if no interest
has been paid or duly provided for, from and including the
Original Interest Accrual Date, to but excluding the next
succeeding Interest Payment Date; provided, however, that if the
interest rate on this Security is reset daily or weekly as
specified on the face hereof for the Interest Reset Period,
interest payments shall be the amount of interest accrued from
and including the most recent date to which interest has been
paid or duly provided for, or, if no interest has been paid, from
the Original Interest Accrual Date, to, but excluding, the
Regular Record Date next preceding such Interest Payment Date,
except that at Maturity the interest payable shall include
interest accrued to but excluding the date of Maturity.
Accrued interest on this Security shall be calculated by
multiplying the principal amount of this Security by an accrued
interest factor. Such accrued interest factor shall be computed
by adding the interest factors calculated for each day in the
Interest Payment Period for which accrued interest is being
calculated. The interest factor (expressed as a decimal
calculated to seven decimal places without rounding) for each
such day shall be computed by dividing the interest rate
applicable to such day by 360 if the Base Rate is the CD Rate,
the Commercial Paper Rate, the Federal Funds Rate, LIBOR or the
Prime Rate, as indicated above, or by the actual number of days
in the year if the Base Rate is the CMT Rate or the Treasury
Rate, as indicated above. For purposes of making the foregoing
calculation, the interest rate in effect on any Interest Reset
Date shall be the applicable rate as reset on such date. Unless
otherwise specified above, all percentages resulting from any
calculation of the rate of interest hereon shall be rounded
upwards, if necessary, to the nearest 1/100,000 of 1% (.0000001),
with five one-millionths of a percentage point rounded upward,
and all dollar amounts used in or resulting from such calculation
shall be rounded to the nearest one-hundredth cent (with .005 of
a cent being rounded upward).
Except as otherwise provided herein, commencing with the
first Interest Reset Date specified above following the Original
Interest Accrual Date and thereafter upon each succeeding
Interest Reset Date specified above, the rate at which interest
on this Security is payable shall be reset daily, weekly,
monthly, quarterly, semi-annually or annually as specified above
for the Interest Reset Period, and such rate, as so reset, shall
be effective as of and for the related Interest Reset Date and
for the balance of the related Interest Reset Period to but
excluding the next succeeding Interest Reset Date. Unless
otherwise specified above, the Interest Reset Dates shall be, if
the interest rate on this Security resets daily, each Business
Day; if the interest rate on this Security (unless the Base Rate
is the Treasury Rate) resets weekly, Wednesday of each week; if
the Base Rate specified above is the Treasury Rate and resets
weekly, Tuesday of each week (except as provided below under
"Determination of Treasury Rate"); if the interest rate on this
Security resets monthly, the third Wednesday of each month; if
the interest rate on this Security resets quarterly, the third
Wednesday of March, June, September and December of each year; if
the interest rate on this Security resets semi-annually, the
third Wednesday of the two months of each year specified above;
and if the interest rate on this Security resets annually, the
third Wednesday of the month of each year specified above;
provided, however, that the interest rate in effect for the ten
days immediately prior to Maturity will be that in effect on the
tenth day preceding Maturity. If an Interest Reset Date for this
Security would otherwise be a day that is not a Business Day (as
hereinafter defined), such Interest Reset Date shall be postponed
to the next succeeding Business Day, except that, if the Base
Rate specified on the face hereof is LIBOR and such Business Day
is in the next succeeding calendar month, such Interest Reset
Date shall be the immediately preceding Business Day.
Anything herein to the contrary notwithstanding, the
interest rate hereon shall not be greater than the Maximum
Interest Rate, if any, or less than the Minimum Interest Rate, if
any, specified above. In addition, the interest rate hereon
shall in no event be higher than the maximum rate permitted by
New York law as the same may be modified by United States law of
general application.
Unless otherwise specified above, interest will be payable,
if the interest rate on this Security resets daily, weekly or
monthly, on the third Wednesday of each month or on the third
Wednesday of March, June, September and December of each year, as
specified above; if the interest rate on this Security resets
quarterly, on the third Wednesday of March, June, September and
December of each year; if the interest rate on this Security
resets semi-annually, on the third Wednesday of the two months of
each year specified above; and if the interest rate on this
Security resets annually, on the third Wednesday of the month of
each year specified above (each such day being an "Interest
Payment Date").
If any Interest Payment Date other than a Redemption Date or
the Stated Maturity would otherwise be a day that is not a
Business Day, such Interest Payment Date shall be postponed to
the next succeeding Business Day, except that, if the Base Rate
specified above is LIBOR and such next succeeding Business Day is
in the next succeeding calendar month, such payment shall be made
on the next preceding Business Day. If a Redemption Date or the
Stated Maturity shall not be a Business Day, payment of the
amounts due on this Security on such date in respect of
principal, premium, if any, and/or interest may be made on the
next succeeding Business Day; and if payment is made or duly
provided for on such Business Day, no interest shall accrue on
such amounts for the period from and after such Redemption Date
or Stated Maturity, as the case may be, to such Business Day.
The Company will appoint, and enter into an agreement with,
an agent (the "Calculation Agent") to calculate the interest
rates on floating rate Securities (including this Security).
Unless otherwise specified above, The Chase Manhattan Bank shall
be the Calculation Agent. All determinations of interest rates
by the Calculation Agent shall, in the absence of manifest error,
be conclusive for all purposes and binding on the Holder hereof.
Subject to applicable provisions of law and except as
otherwise specified herein, on each Interest Reset Date the rate
of interest shall be determined in accordance with the provisions
of the applicable heading below.
DETERMINATION OF CD RATE.
If the Base Rate specified above is the CD Rate, this
Security shall bear interest for each Interest Reset Period at an
interest rate calculated with reference to the CD Rate,
determined as set forth below, and the Spread or Spread
Multiplier, if any, specified above.
The "CD Rate" for each Interest Reset Period shall be
determined by the Calculation Agent on the Calculation Date (as
hereinafter defined) and shall be (a) the rate (expressed as a
percentage per annum) as of the second Business Day prior to the
related Interest Reset Date (a "CD Rate Determination Date") for
negotiable certificates of deposit having the Index Maturity
specified above as published in H.15(519) under the heading "CDs
(Secondary Market)", or (b) if such rate is not so published by
9:00 A.M., New York City time, on the Calculation Date, the rate
as of such CD Rate Determination Date for negotiable
certificates of deposit of the Index Maturity specified above as
published in Composite Quotations (as hereinafter defined), or
(c) if neither of such rates is published by 3:00 P.M., New York
City time, on the Calculation Date, the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City
time, on such CD Rate Determination Date for certificates of
deposit in the denomination of U.S. $5 million with a remaining
maturity closest to the Index Maturity specified above of three
leading nonbank dealers in negotiable U.S. dollar certificates of
deposit in The City of New York selected by the Calculation
Agent, in its discretion (after consultation with the Company);
provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as described in clause (c)
above, the CD Rate for such Interest Reset Period shall be the
same as the CD Rate for the immediately preceding Interest Reset
Period (or, if there was no such previous Interest Reset Period,
the rate of interest hereon for such Interest Reset Period shall
be the Initial Interest Rate).
DETERMINATION OF CMT RATE.
If the Base Rate specified above is the CMT Rate, this
Security shall bear interest for each Interest Reset Period at a
rate calculated with reference to the CMT Rate, determined as set
forth below, and the Spread or Spread Multiplier, if any,
specified above.
The "CMT Rate" for each Interest Reset Period shall be
determined by the Calculation Agent on the Calculation Date and
shall be the rate (expressed as a percentage per annum) displayed
on the Designated CMT Dow Jones Market Page (as defined below)
under the caption "...Treasury Constant Maturities... Federal
Reserve Board Release H.15...Mondays Approximately 3:45 p.m."
under the column for the Designated CMT Maturity Index (as
defined below) for (a)(i) if the Designated CMT Dow Jones Market
Page is 7055, the second Business Day prior to the related
Interest Reset Date (a "CMT Rate Determination Date") or (ii) if
the Designated CMT Dow Jones Market Page is 7052, the week or the
month, as applicable, ended immediately preceding the week in
which such CMT Rate Determination Date occurs, or (b) if such
rate is no longer displayed on the relevant page, or if not
displayed by 3:00 p.m., New York City time on the Calculation
Date, the Treasury Constant Maturity rate for the Designated CMT
Maturity Index as published in H.15(519), or (c) if such rate is
no longer published or, if not published by 3:00 p.m., New York
City time, on the Calculation Date, the Treasury Constant
Maturity rate for the Designated CMT Maturity Index (or other
United States Treasury rate for the Designated CMT Maturity
Index) for such CMT Rate Determination Date as may then be
published by either the Board of Governors of the Federal Reserve
System or the United States Department of the Treasury that the
Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Dow Jones Market Page
and published in H.15(519), or (d) if such information is not
provided by 3:00 p.m., New York City time, on the Calculation
Date, then the CMT Rate for the CMT Rate Determination Date shall
be a yield to maturity, based on the arithmetic mean of the
secondary market closing offer side prices as of approximately
3:30 p.m., New York City time, on the CMT Rate Determination Date
reported, according to their written records, by three leading
primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York selected by the
Calculation Agent (from five such Reference Dealers selected by
the Calculation Agent, in its discretion (after consultation with
the Company), and eliminating the highest quotation (or, in the
event of equality, one of the highest) and the lowest quotation
(or, in the event of equality, one of the lowest)), for the most
recently issued direct noncallable fixed rate obligations of the
United States ("Treasury notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining
term to maturity of not less than such Designated CMT Maturity
Index minus one year, or (e) if the Calculation Agent cannot
obtain three such Treasury notes quotations, a yield to maturity
based on the arithmetic mean of the secondary market offer side
prices as of approximately 3:30 p.m., New York City time, on the
CMT Rate Determination Date of three Reference Dealers in The
City of New York (from five such Reference Dealers selected by
the Calculation Agent, in its discretion (after consultation with
the Company), and eliminating the highest quotation (or, in the
event of equality, one of the highest) and the lowest quotation
(or, in the event of equality, one of the lowest)), for Treasury
notes with an original maturity of the number of years that is
the next highest to the Designated CMT Maturity Index and a
remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least $100 million, or (f) if three
or four (and not five) of such Reference dealers are quoting as
described above, the arithmetic mean of the offer prices obtained
without the elimination of either the highest or the lowest of
such quotes; provided, however, that if fewer than three
Reference Dealers selected by the Calculation Agent are quoting
as described above, the CMT Rate for such Interest Reset Period
will be the same as the CMT Rate for the immediately preceding
Interest Reset Period (or, if there was no such previous Interest
Reset Period, the rate of interest hereon for such Interest Reset
Period shall be the Initial Interest Rate). For purposes of
clause (e) in the first sentence of this paragraph, if two
Treasury notes have remaining terms to maturity equally close to
the Designated CMT Maturity Index, the quotes for the Treasury
note with the shorter remaining term to maturity shall be used.
"Designated CMT Maturity Index" shall be the original period
to maturity of the U.S. Treasury securities (either 1, 2, 3, 5,
7, 10, 20 or 30 years) specified above with respect to which the
CMT Rate will be calculated. If no such maturity is specified
above, the Designated CMT Maturity Index shall be 2 years.
"Designated CMT Dow Jones Market Page" means the display on
the Dow Jones Market service (formerly the Dow Jones Telerate
Service) on the page specified above (or any other page as may
replace such page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519)), for the
purpose of displaying Treasury Constant Maturities as reported in
H.15(519). If no such page is specified above, the page shall be
7052, for the most recent week.
DETERMINATION OF COMMERCIAL PAPER RATE.
If the Base Rate specified above is the Commercial Paper
Rate, this Security shall bear interest for each Interest Reset
Period at a rate calculated with reference to the Commercial
Paper Rate, determined as set forth below, and the Spread or
Spread Multiplier, if any, specified above.
The "Commercial Paper Rate" for each Interest Reset Period
shall be determined by the Calculation Agent on the Calculation
Date and shall be (a) the Money Market Yield (as hereinafter
defined) as of the second Business Day prior to the related
Interest Reset Date (a "Commercial Paper Rate Determination
Date") of the rate (expressed as a percentage per annum) for
commercial paper having the Index Maturity specified above, as
such rate shall be published in H.15(519) (as hereinafter
defined) under the heading "Commercial Paper - Nonfinancial", or
(b) if such rate is not so published prior to 9:00 a.m., New York
City time, on the Calculation Date, the Money Market Yield as of
such Commercial Paper Rate Determination Date of the rate for
commercial paper of the Index Maturity as published in Composite
Quotations (as hereinafter defined) under the heading "Commercial
Paper", or (c) if none of such rates is published by 3:00 p.m.,
New York City time, on the Calculation Date, the Money Market
Yield of the arithmetic mean of the offered rates, as of 11:00
a.m., New York City time, on such Commercial Paper Rate
Determination Date, of three leading dealers in commercial paper
in The City of New York selected by the Calculation Agent, in its
discretion (after consultation with the Company), for commercial
paper of the Index Maturity placed for a nonfinancial issuer
whose bond rating is "AA," or the equivalent, from a nationally
recognized statistical rating organization; provided, however,
that if the dealers selected as aforesaid are not quoting offered
rates as described in clause (c) above, the Commercial Paper Rate
for such Interest Reset Period shall be deemed to be the same as
the Commercial Paper Rate for the preceding Interest Reset Period
(or, if there was no such previous Interest Reset Period, the
rate of interest hereon for such Interest Reset Period shall be
the Initial Interest Rate).
"Money Market Yield" shall be a yield calculated in
accordance with the following formula:
Money Market Yield = D x 360 x 100
---------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial
paper quoted on a bank discount basis and expressed as a decimal,
and "M" refers to the actual number of days in the Index Maturity
specified above.
DETERMINATION OF FEDERAL FUNDS RATE.
If the Base Rate specified above is the Federal Funds Rate,
this Security shall bear interest for each Interest Reset Period
at a rate calculated with reference to the Federal Funds Rate,
determined as set forth below, and the Spread or Spread
Multiplier, if any, specified above.
The "Federal Funds Rate" for each Interest Reset Period
shall be determined by the Calculation Agent on the Calculation
Date and shall be (a) the rate (expressed as a percentage per
annum) as of the second Business Day prior to the related
Interest Reset Date (a "Federal Funds Rate Determination Date")
for Federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)", or (b) if such rate is not so
published by 9:00 A.M., New York City time, on the Calculation
Date, the rate on such Federal Funds Rate Determination Date as
published in Composite Quotations under the heading "Federal
Funds/Effective Rate", or (c) if neither of such rates is
published by 3:00 P.M., New York City time, on the Calculation
Date, the arithmetic mean of the rates for the last transaction
in overnight Federal funds as of 11:00 A.M., New York City time,
on such Federal Funds Rate Determination Date arranged by three
leading brokers in Federal Funds transactions in The City of New
York selected by the Calculation Agent, in its discretion (after
consultation with the Company); provided, however, that if the
brokers selected as aforesaid by the Calculation Agent are not
quoting as described in clause (c) above, the Federal Funds Rate
for such Interest Reset Period shall be the same as the Federal
Funds Rate for the immediately preceding Interest Reset Period
(or, if there was no such previous Interest Reset Period, the
rate of interest hereon for such Interest Reset Period shall be
the Initial Interest Rate).
DETERMINATION OF LIBOR
If the Base Rate specified above is LIBOR, this Security
shall bear interest for each Interest Reset Period at a rate
calculated with reference to LIBOR, determined as set forth
below, and the Spread or Spread Multiplier, if any, specified
above.
"LIBOR" for each Interest Reset Period shall be determined
by the Calculation Agent and shall be:
(a)(i) if "LIBOR Reuters" is specified above as the
Reporting Service, the arithmetic mean of the offered rates
(unless the specified Designated LIBOR Page (as hereinafter
defined) by its terms provides only for a single rate, in
which case such single rate shall be used) for deposits in
the Index Currency specified above in the London interbank
market, for the period of the Index Maturity specified above
commencing on the related Interest Reset Date for such
Interest Reset Period, which appear or appears on the
Designated LIBOR Page at approximately 11:00 a.m., London
time, on the second London Banking Day (as hereinafter
defined) prior to such Interest Reset Date (a "LIBOR"
Determination Date"), or (ii) if "LIBOR Dow Jones Market" is
specified above as the Reporting Service, the rate for
deposits in the Index Currency, for the period of the Index
Maturity commencing on such LIBOR Determination Date, that
appears on the Designated LIBOR Page at approximately 11:00
a.m., London time, on such LIBOR Determination Date;
(b) with respect to a LIBOR Determination Date on
which fewer than two offered rates appear (if "LIBOR
Reuters" is specified above as the Reporting Service and
calculation of LIBOR is based on the arithmetic mean of the
offered rates) or on which no rate appears (if the Reporting
Service specified above is either (x) "LIBOR Reuters" and
the Designated LIBOR Page by its terms provides only for a
single rate or (y) "LIBOR Dow Jones Market"), the
Calculation Agent shall request the principal London office
of each of four major reference banks in the London
interbank market selected by the Calculation Agent, in its
discretion (after consultation with the Company), to provide
the Calculation Agent with its offered quotations for
deposits in the Index Currency, for the period of the Index
Maturity commencing on the Interest Reset Date for such
Interest Reset Period and in a principal amount equal to an
amount of not less than U.S.$1 million (or the equivalent
amount in the Index Currency) that is representative of a
single transaction in the Index Currency in such market at
such time, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on such LIBOR
Determination Date; if at least two such quotations are
provided, LIBOR, in respect of such LIBOR Determination
Date, shall be the arithmetic mean of such quotations;
(c) if fewer than two such quotations are so provided,
LIBOR in respect of such LIBOR Determination Date shall be
the arithmetic mean of the rates quoted by three major banks
in The City of New York selected by the Calculation Agent,
in its discretion (after consultation with the Company), at
approximately 11:00 a.m. on such LIBOR Determination Date,
for loans in the Index Currency to leading European banks,
for the period of the Index Maturity commencing on the
Interest Reset Date for such Interest Reset Period and in a
principal amount of not less than U.S.$1 million (or the
equivalent amount in the Index Currency) that is
representative of a single transaction in the Index Currency
in such market at such time; provided, however, that if
fewer than three banks selected as aforesaid by the
Calculation Agent are quoting rates described in this
clause (c), LIBOR for such Interest Reset Period shall be
the same as LIBOR for the immediately preceding Interest
Reset Period (or, if there was no such previous Interest
Reset Period, the rate of interest hereon for such Interest
Reset Period shall be the Initial Interest Rate).
"Designated LIBOR Page" means (x) if "LIBOR Reuters" is
specified above as the Reporting Service, the display on the
Reuters monitor money rates service (or any successor service)
for the purpose of displaying the London interbank rates of major
banks for the applicable Index Currency, or (y) if "LIBOR Dow
Jones Market" is specified above as the Reporting Service, the
display on the Dow Jones Market service (formerly, the Dow Jones
Telerate Service), or any successor service, for the purpose of
displaying the London interbank rates of major banks for the
Index Currency. If neither LIBOR Reuters nor LIBOR Dow Jones
Market is specified above as the Reporting Service, LIBOR shall
be determined as if LIBOR Dow Jones Market Page 3750 had been
specified.
"Index Currency" means the currency (including any composite
currency) so specified above. If no such currency is so
specified above, "Index Currency" means U.S. dollars.
"Dow Jones Market Page 3750" means the display designated as
"Page 3750" on the Dow Jones Market service (formerly, the Dow
Jones Telerate Service), or such other page as may replace Page
3750 on such service or such other service or services as may be
nominated by the British Bankers' Association as the information
vendor for the purpose of displaying London interbank offered
rates for U.S. dollar deposits.
DETERMINATION OF PRIME RATE.
If the Base Rate specified above is the Prime Rate, this
Security shall bear interest for each Interest Rest Period at a
rate calculated with reference to the Prime Rate, determined as
set forth below, and the Spread or Spread Multiplier, if any,
specified above.
The "Prime Rate" for each Interest Reset Period shall be
determined by the Calculation Agent on the Calculation Date and
shall be (a) the rate (expressed as a percentage per annum) as of
the second Business Day prior to the related Interest Reset Date
(a "Prime Rate Determination Date") set forth in H.15(519)
opposite the caption "Bank Prime Loan", or (b) if such rate is
not so published prior to 3:00 p.m., New York City time, on the
Calculation Date, the arithmetic mean of the rates publicly
announced by each bank named on the Reuters Screen USPRIME1 Page
(as defined below) as such bank's prime rate or base lending rate
as in effect on such Prime Rate Determination Date as quoted on
the Reuters Screen USPRIME1 Page on such Prime Rate Determination
Date or (c) if fewer than four such rates appear on the Reuters
Screen USPRIME1 Page for such Prime Rate Determination Date, the
arithmetic mean of the prime rates quoted on the basis of the
actual number of days in the year divided by 360 as of the close
of business on such Prime Rate Determination Date by at least two
of three major money center banks in The City of New York
selected by the Calculation Agent, in its discretion (after
consultation with the Company), from which quotations are
requested; provided, however, that if fewer than two such prime
rates are so quoted by major money center banks as aforesaid,
there shall be included in the group of rates whose arithmetic
mean is to be so determined the prime rates or base lending
rates, as of such Prime Rate Determination Date, of that number
of substitute banks or trust companies organized and doing
business under the laws of the United States, or any State
thereof, in each case having total equity capital of at least
U.S. $500 million and being subject to supervision or examination
by Federal or State authority, selected by the Calculation Agent,
in its discretion (after consultation with the Company), which,
when added to the number of rates provided by major money center
banks as aforesaid, shall equal two.
If in any calendar month the Prime Rate is not published in
H.15(519) and the banks or trust companies selected as aforesaid
are not quoting as described in the preceding paragraph, the
"Prime Rate" for the applicable Interest Reset Period shall be
Prime Rate for the immediately preceding Interest Reset Period
(or, if there was no such previous Interest Reset Period, the
rate of interest hereon for such Interest Reset Period shall be
the Initial Interest Rate).
"Reuters Screen USPRIME1 Page" means the display designated
as Page "USPRIME1" on the Reuters monitor money rates service (or
such other page as may replace the USPRIME1 Page on that service
for the purpose of displaying prime rates or base lending rates
of major United States banks).
DETERMINATION OF TREASURY RATE
If the Base Rate specified above is the Treasury Rate, this
Security shall bear interest for each Interest Reset Period at a
rate calculated with reference to the Treasury Rate, determined
as set forth below, and the Spread or Spread Multiplier, if any,
specified above.
The "Treasury Rate" for each Interest Reset Period shall be
determined by the Calculation Agent on the Calculation Date and
shall be (a) the rate (expressed as a percentage per annum) for
the auction held on the Treasury Rate Determination Date (as
hereinafter defined) for such Interest Reset Period of direct
obligations of the United States ("Treasury bills") having the
Index Maturity specified above, as such rate shall be published
in H.15(519) under the heading "U.S. Government Securities -
Treasury bills - auction average (investment)", or (b) if such
rate is not published prior to 9:00 a.m., New York City time, on
the Calculation Date, the auction average rate (expressed as a
bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) on such Treasury Rate
Determination Date as otherwise announced by the United States
Department of Treasury, or (c) if the results of the auction of
Treasury bills having the Index Maturity are not published or
reported as provided above by 3:00 p.m., New York City time, on
the Calculation Date, or if no such auction is held on such
Treasury Rate Determination Date, a yield to maturity (expressed
as a bond equivalent on the basis of a year of 365 or 366 days,
as applicable, and applied on a daily basis) of the arithmetic
mean of the secondary market bid rates, as of approximately 3:30
p.m., New York City time, on such Treasury Rate Determination
Date, of three leading primary United States government
securities dealers selected by the Calculation Agent, in its
discretion (after consultations with the Company), for the issue
of Treasury bills with a remaining maturity closest to the Index
Maturity; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting bid rates as
described in clause (c) above, then the "Treasury Rate" for such
Interest Reset Period shall be deemed to be the same as the
Treasury Rate for the immediately preceding Interest Reset Period
(or, if there was no such previous Interest Reset Period, the
rate of interest hereon for such Interest Reset Period shall be
the Initial Interest Rate).
The "Treasury Rate Determination Date" for each Interest
Reset Period shall be the day of the week in which the Interest
Reset Date for such Interest Reset Period falls on which Treasury
bills would normally be auctioned. (As of the Original Interest
Accrual Date, Treasury bills are normally sold at auction on
Monday of each week, unless that day is a legal holiday, in which
case the auction is normally held on the following Tuesday,
except that such auction may be held on the preceding Friday.)
If, as the result of a legal holiday, an auction is so held on
the preceding Friday, such Friday shall be the Treasury Rate
Determination Date pertaining to the Interest Reset Period
commencing in the next succeeding week. If an auction date shall
fall on any day that would otherwise be an Interest Reset Date
for a Treasury Rate Note, then such Interest Reset Date shall
instead be the Business Day immediately following such auction
date.
If, as specified above, this Security is redeemable, this
Security is subject to redemption at any time on or after the
Initial Redemption Date specified above, as a whole or in part,
at the election of the Company, at the applicable redemption
price (as described below) plus accrued interest to the date
fixed for redemption. Such redemption price shall be the Initial
Redemption Price specified above for the twelve-month period
commencing on the Initial Redemption Date and shall decline for
the twelve-month period commencing on each anniversary of the
Initial Redemption Date by a percentage of principal amount equal
to the Reduction Percentage specified above until such redemption
price is 100% of the principal amount of this Security to be
redeemed.
Notwithstanding the foregoing, the Company may not, prior to
the Redemption Limitation Date, if any, specified above, redeem
this Security as contemplated above as a part of, or in
anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an effective
interest cost to the Company (calculated in accordance with
generally accepted financial practice) less than the effective
interest cost to the Company (similarly calculated) of this
Security.
[Insert provisions, if any, for redemption pursuant to a
sinking fund or analogous provision or at the option of the
Holder.]
Notice of redemption [(other than at the election of the
Holder)] shall be given by mail to Holders of Securities, not
less than 30 days nor more than 60 days prior to the date fixed
for redemption, all as provided in the Indenture. As provided in
the Indenture, notice of redemption at the election of the
Company as aforesaid may state that such redemption shall be
conditional upon the receipt by the Trustee of money sufficient
to pay the principal of and premium, if any, and interest, if
any, on this Security on or prior to the date fixed for such
redemption; a notice of redemption so conditioned shall be of no
force or effect if such money is not so received and, in such
event, the Company shall not be required to redeem this Security.
In the event of redemption of this Security in part only, a
new Security or Securities of this series, of like tenor, for the
unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the
principal of this Security may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the Trustee to enter into one or more supplemental
indentures for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of,
the Indenture with the consent of the Holders of not less than a
majority in aggregate principal amount of the Securities of all
series then Outstanding under the Indenture, considered as one
class; provided, however, that if there shall be Securities of
more than one series Outstanding under the Indenture and if a
proposed supplemental indenture shall directly affect the rights
of the Holders of Securities of one or more, but less than all,
of such series, then the consent only of the Holders of a
majority in aggregate principal amount of the Outstanding
Securities of all series so directly affected, considered as one
class, shall be required; and provided, further, that if the
Securities of any series shall have been issued in more than one
Tranche and if the proposed supplemental indenture shall directly
affect the rights of the Holders of Securities of one or more,
but less than all, of such Tranches, then the consent only of the
Holders of a majority in aggregate principal amount of the
Outstanding Securities of all Tranches so directly affected,
considered as one class, shall be required; and provided,
further, that the Indenture permits the Trustee to enter into one
or more supplemental indentures for limited purposes without the
consent of any Holders of Securities. The Indenture also
contains provisions permitting the Holders of a majority in
principal amount of the Securities then Outstanding, on behalf of
the Holders of all Securities, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange therefor or in
lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As provided in the Indenture and subject to certain
limitations therein set forth, this Security or any portion of
the principal amount hereof will be deemed to have been paid for
all purposes of the Indenture and to be no longer Outstanding
thereunder, and, at the election of the Company, the Company's
entire indebtedness in respect thereof will be satisfied and
discharged, if there has been irrevocably deposited with the
Trustee or any Paying Agent (other than the Company), in trust,
money in an amount which will be sufficient and/or Eligible
Obligations, the principal of and interest on which when due,
without regard to any reinvestment thereof, will provide moneys
which, together with moneys so deposited, will be sufficient to
pay when due the principal of and interest on this Security when
due.
The Indenture 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 Person, to the assumption by such other Person, in
certain circumstances, of all of the obligations of the Company
under the Indenture and on the Securities and to the release and
discharge of the Company, in certain circumstances, from such
obligation.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is
registrable in the Security Register, upon surrender of this
Security for registration of transfer at the corporate trust
office of The Chase Manhattan Bank in New York, New York or such
other office or agency as may be designated by the Company from
time to time, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and
the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more
new Securities of this series of authorized denominations and of
like tenor and aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities of this series are issuable only as
registered Securities, without coupons, and in denominations of
$100,000 or any amount in excess thereof that is an integral
multiple of $1,000. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series
are exchangeable for a like aggregate principal amount of
Securities of the same series and Tranche, of any authorized
denominations, as requested by the Holder surrendering the same,
and of like tenor upon surrender of the Security or Securities to
be exchanged at the corporate trust office of The Chase Manhattan
Bank in New York, New York or such other office or agency as may
be designated by the Company from time to time.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due surrender of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security
is registered as the absolute owner hereof for all purposes
(subject to Section 307 of the Indenture), whether or not this
Security be overdue, and neither the Company, the Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York,
except to the extent that the Trust Indenture Act shall be
applicable.
As used herein,
(1) "Business Day" means any day, other than a Saturday or
Sunday, which is (a) not a day on which banking
institutions or trust companies in The City of New
York, New York or other city in which is located any
office or agency maintained for the payment of
principal of or premium, if any, or interest on this
Security, are authorized or required by law, regulation
or executive order to remain closed and (b) if the Base
Rate specified above is LIBOR, a London Banking Day.
"London Banking Day" means any day on which dealings in
deposits in the Index Currency, if any, specified above
are transacted in the London Interbank market;
(2) "Calculation Date", with respect to an Interest
Determination Date, means the earlier of (a) the tenth
calendar day after such Interest Determination Date,
or, if such day is not a Business Day, the next
succeeding Business Day, and (b) the Business Day next
preceding the related Interest Payment Date or the
Maturity Date, as the case may be;
(3) "Composite Quotations" means the daily statistical
release entitled "Composite 3:30 p.m. Quotations for
U.S. Government Securities," or any successor release,
published by the Federal Reserve Bank of New York; and
(4) "H.15(519)" means the publication entitled "Statistical
Release H.15(519)," Selected Interest Rates, or any
successor publication, published by the Board of
Governors of the Federal Reserve System.
All other terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the
Indenture.
As provided in the Indenture, no recourse shall be had for
the payment of the principal of or premium, if any, or interest
on any Securities, or any part thereof, or for any claim based
thereon or otherwise in respect thereof, or of the indebtedness
represented thereby, or upon any obligation, covenant or
agreement under the Indenture, against, and no personal liability
whatsoever shall attach to, or be incurred by, any incorporator,
shareholder, officer or director, as such, past, present or
future of the Company or of any predecessor or successor
corporation (either directly or through the Company or a
predecessor or successor corporation), whether by virtue of any
constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being
expressly agreed and understood that the Indenture and all the
Securities are solely corporate obligations and that any such
personal liability is hereby expressly waived and released as a
condition of, and as part of the consideration for, the execution
of the Indenture and the issuance of the Securities.
Unless the certificate of authentication hereon has been
executed by the Trustee or an Authenticating Agent by manual
signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed.
THE WASHINGTON WATER POWER COMPANY
By:
------------------------------------------
[Title]
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
Dated:
-------------------
__________________________ OR ______________________
__________________________, ______________________,
AS TRUSTEE AS TRUSTEE
By: BY:[ ],
-----------------------
Authorized Officer AS AUTHENTICATING AGENT
By:
---------------------------
Authorized Officer
<PAGE>
This Security may not be transferred or exchanged, nor may
any purported transfer be registered, except (i) this Security
may be transferred in whole, and appropriate registration of
transfer effected, if such transfer is by Cede & Co., as nominee
for The Depository Trust Company (the "Depositary"), to the
Depositary, or by the Depositary to another nominee thereof, or
by any nominee of the Depositary to any other nominee thereof, or
by the Depositary or any nominee thereof to any successor
securities depositary or any nominee thereof; and (ii) this
Security may be exchanged for definitive Securities registered in
the respective names of the beneficial holders hereof, and
thereafter shall be transferable without restrictions if: (A) the
Depositary, or any successor securities depositary, shall have
notified the Company and the Trustee that it is unwilling or
unable to continue to act as securities depositary with respect
to the Securities and the Trustee shall not have been notified by
the Company within ninety (90) days of the identity of a
successor securities depositary with respect to the Securities;
(B) the Company shall have delivered to the Trustee a Company
Order to the effect that the Securities shall be so exchangeable
on and after a date specified therein; or (C)(1) an Event of
Default shall have occurred and be continuing, (2) the Trustee
shall have given notice of such Event of Default pursuant to
Section 802 of the Indenture and (3) there shall have been
delivered to the Company and the Trustee an Opinion of Counsel to
the effect that the interests of the beneficial owners of the
Securities in respect thereof will be materially impaired unless
such owners become Holders of definitive Securities.
-----------------------
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
-----------------------------------------------------------------
[please insert social security or other identifying number of
assignee]
-----------------------------------------------------------------
[please print or typewrite name and address of assignee]
-----------------------------------------------------------------
the within Security of THE WASHINGTON WATER POWER COMPANY and
does hereby irrevocably constitute and appoint
------------------
, Attorney, to transfer said Security on the books of
----------
the within-mentioned Company, with full power of substitution in
the premises.
Dated:
--------------
-----------------------------
Notice: The signature to this assignment must correspond with
the name as written upon the face of the Security in every
particular without alteration or enlargement or any change
whatsoever.
PAINE, HAMBLEN, COFFIN, BROOKE & MILLER LLP
717 West Sprague Avuenue, Suite 1200
Spokane, Washington 99201-3505
(509) 455-6000
FAX (509) 838-0007
November 5, 1997
Exhibit 5(a)
The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Ladies and Gentlemen:
We are acting as counsel to The Washington Water Power
Company (the "Company") in connection with the proposed issuance
of unsecured debt securities (the "Debt Securities") of the
Company to be issued pursuant to the terms of an indenture from
the Company to the The Chase Manhattan Bank, as trustee (the
"Indenture"), to be issued and sold from time to time by the
Company in one or more underwritten public offerings. The Debt
Securities are to be issued in an aggregate principal amount of
up to $250,000,000, as contemplated by the registration statement
on Form S-3 proposed to be filed by the Company with the
Securities and Exchange Commission on or about the date hereof
for the registration of the Debt Securities under the Securities
Act of 1933, as amended (the "Act"), said registration statement,
as it may be amended, being hereinafter called the "Registration
Statement".
We have examined and are familiar with originals or copies,
certified or otherwise identified to our satisfaction, of (i) the
Registration Statement, (ii) the Indenture, and (iii) a
Certificate of Existence/Authorization issued by the Secretary of
State of Washington. We have also examined such other documents
and satisfied ourselves as to such other matters as we have
deemed necessary in order to render this opinion. As to various
facts material to the opinions expressed below, we have relied on
certificates of public officials, certificates of officers or
employees of the Company, representations contained in the
documents, and other oral or written assurances by officers or
employees of the Company.
Based upon the foregoing and subject to the qualifications
hereinafter expressed, we are of the opinion that the Company is
a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Washington; and we are of
also of the opinion that, when:
(a) the Company's Board of Directors shall have taken
such action as may be necessary to authorize the issuance
and sale by the Company of the Debt Securities on the terms
set forth or contemplated by the Registration Statement, as
to be amended or supplemented, and exhibits thereto, and to
authorize such other action as may be necessary in
connection with the issuance and sale by the Company of the
Debt Securities from time to time; and
(b) the Washington Utilities and Transportation
Commission, the California Public Utilities Commission, the
Idaho Public Utilities Commission and the Public Utility
Commission of Oregon shall have issued, pursuant to
applications filed by the Company with said regulatory
authorities, appropriate orders authorizing the issuance and
sale by the Company of the Debt Securities;
the issuance and sale of the Debt Securities by the Company, on
such terms and otherwise as contemplated by and in conformity
with the acts, proceedings and documents referred to above,
will have been duly authorized by all necessary corporate action
on the part of the Company, and no further approval, authorization,
consent or other order of, or filing with, any governmental agency
of the States of Washington, California, Idaho, Montana and Oregon
will be legally required for the authorization of the issuance and
sale by the Company of the Debt Securities or in order for the Debt
Securities to constitute valid and binding obligations of the
Company, all on such terms and otherwise as contemplated by and
in conformity with the acts, proceedings and documents referred
to above.
The opinions expressed herein are limited to the laws of the
States of Washington, California, Idaho, Montana and Oregon
(excluding therefrom principles of conflicts of laws, state
securities or blue sky laws and laws of political subdivisions of
such States).
This opinion is given as of the date hereof, without any
obligation upon us to update this opinion or to advise the
addressee hereof or any other party of any changes in
circumstances or laws that may hereafter be brought to our
attention or occur which may affect this opinion.
This opinion is not being delivered for the benefit of, nor
may it be relied upon by, the holders of the Debt Securities or
any other party to which it is not specifically addressed or to
which reliance is not expressly permitted hereby.
We hereby consent to the filing of this opinion as Exhibit
5(a) to the Registration Statement and to the references to our
firm under the headings "Legal Matters" in both the Prospectus
and the Prospectus Supplement which form a part of the
Registration Statement. In giving the foregoing consent, we do
not admit that we are within the category of persons whose
consent is required under Section 7 of the Act or the rules and
regulations promulgated thereunder. Except as expressly
permitted hereby, this opinion may not be used, delivered,
circulated, filed, quoted or otherwise referred to.
Very truly yours,
/s/ Paine - Hamblen
PAINE, HAMBLEN, COFFIN, BROOKE
& MILLER LLP
Exhibit 5(b)
REID & PRIEST LLP
40 West 57th Street
New York, NY 10019-4097
Telephone 212 603-2000
Fax 212 603-2001
November 5, 1997
The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Ladies and Gentlemen:
We are acting as counsel to The Washington Water Power
Company (the "Company") in connection with the proposed issuance
of unsecured debt securities (the "Debt Securities") of the
Company to be issued pursuant to the terms of an indenture from
the Company to the The Chase Manhattan Bank, as trustee (the
"Indenture"), to be issued and sold from time to time by the
Company in one or more underwritten public offerings. The Debt
Securities are to be issued in an aggregate principal amount of
up to $250,000,000, as contemplated by the registration statement
on Form S-3 proposed to be filed by the Company with the
Securities and Exchange Commission on or about the date hereof
for the registration of the Debt Securities under the Securities
Act of 1933, as amended (the "Act"), said registration statement,
as it may be amended, being hereinafter called the "Registration
Statement".
We have examined and are familiar with originals or copies,
certified or otherwise identified to our satisfaction, of (i) the
Registration Statement and (ii) the Indenture. We have also
examined such other documents and satisfied ourselves as to such
other matters as we have deemed necessary in order to render this
opinion.
Based upon the foregoing and subject to the qualifications
hereinafter expressed, we are of the opinion that all action
necessary to make valid the proposed issuance and sale by the
Company of the Debt Securities from time to time will have been
taken when:
(a) the Registration Statement shall have become
effective under the Act and the Indenture shall have been
qualified under the Trust Indenture Act of 1939, as amended;
(b) the Washington Utilities and Transportation
Commission, the California Public Utilities Commission, the
Idaho Public Utilities Commission and the Public Utility
Commission of Oregon shall have issued, pursuant to
applications filed by the Company with said regulatory
authorities, appropriate orders authorizing the issuance and
sale by the Company of the Debt Securities (such matters
having been addressed in the opinion of Paine, Hamblen,
Coffin, Brooke & Miller LLP, which is being filed as Exhibit
5(a) to the Registration Statement);
(c) the Company's Board of Directors shall have taken
such action as may be necessary to authorize the issuance
and sale by the Company of the Debt Securities on the terms
set forth or contemplated by the Registration Statement, as
to be amended or supplemented, and exhibits thereto, and to
authorize such other action as may be necessary in
connection with the consummation of the issuance and sale of
the Debt Securities from time to time (such matters having
been addressed in the aforesaid opinion of Paine, Hamblen,
Coffin, Brooke & Miller LLP);
(d) the Indenture shall have been appropriately
executed and delivered by the Company and the Trustee, and
an Officer's Certificate establishing the Debt Securities as
a series shall have been appropriately executed and declared
by the Company under the Indenture;
(e) each Debt Security shall have been appropriately
executed by the Company and appropriately authenticated by
the Trustee in accordance with the applicable provisions of
the Indenture; and
(f) the specific terms of the Debt Securities shall
have been determined, and such Debt Securities shall have
been issued and delivered by the Company to the purchasers
thereof against payment therefor, all on such terms and
otherwise as contemplated by and in conformity with, the
acts, proceedings and documents referred to above.
We are further of the opinion that, when the foregoing steps
have been taken with respect to the Debt Securities, such Debt
Securities will be legal, valid and binding obligations of the
Company.
The opinions expressed herein are limited to the laws of the
State of New York and the federal law of the United States
(excluding therefrom principles of conflicts of laws, state
securities or blue sky laws). To the extent that such opinions
relate to or are dependent upon matters governed by the laws of
other States, we have assumed the legal conclusions set forth in
the opinion of Paine, Hamblen, Coffin, Brooke & Miller LLP, which
is being filed as Exhibit 5(a) to the Registration Statement.
This letter is not being delivered for the benefit of, nor
may it be relied upon by, the holders of the Debt Securities or
any other party to which it is not specifically addressed or to
which reliance is not expressly permitted hereby.
We hereby consent to the filing of this opinion as Exhibit
5(b) to the Registration Statement and to the references to our
firm in the Registration Statement.
Very truly yours,
/s/ Reid & Priest LLP
REID & PRIEST LLP
INDEPENDENT AUDITORS' CONSENT
=================================================================
We consent to the incorporation by reference in this Registration
Statement of The Washington Water Power Company on Form S-3 of
our report dated January 31, 1997, appearing in the Annual Report
on Form 10-K of The Washington Water Power Company for the year
ended December 31, 1996 and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this
Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Seattle, Washington
November 4, 1997
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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
--------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2)
--------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
--------------------------------------
THE WASHINGTON WATER POWER COMPANY
(Exact name of obligor as specified in its charter)
WASHINGTON 91-0462470
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99202
(Address of principal executive offices) (Zip Code)
-------------
MEDIUM-TERM NOTES, SERIES C
(Title of the indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
New York State Banking Department, State House, Albany, New
York 12110.
Board of Governors of the Federal Reserve System,
Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C.,
20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
2
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now
in effect, including the Organization Certificate and the Certificates
of Amendment dated February 17, 1969, August 31, 1977, December 31,
1980, September 9, 1982, February 28, 1985, December 2, 1991 and July
10, 1996 (see Exhibit 1 to Form T-1 filed in connection with
Registration Statement No. 333-06249, which is incorporated by
reference).
2. A copy of the Certificate of Authority of the Trustee to
Commence Business (see Exhibit 2 to Form T-1 filed in connection with
Registration Statement No. 33-50010, which is incorporated by
reference. On July 14, 1996, in connection with the merger of Chemical
Bank and The Chase Manhattan Bank (National Association), Chemical
Bank, the surviving corporation, was renamed The Chase Manhattan
Bank).
3. None, authorization to exercise corporate trust powers
being contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit
4 to Form T-1 filed in connection with Registration Statement No.
333-06249, which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of
the Act (see Exhibit 6 to Form T-1 filed in connection with
Registration Statement No. 33-50010, which is incorporated by
reference. On July 14, 1996, in connection with the merger of Chemical
Bank and The Chase Manhattan Bank (National Association), Chemical
Bank, the surviving corporation, was renamed The Chase Manhattan
Bank).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or
examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939 the Trustee, The Chase Manhattan Bank, a corporation organized
and existing under the laws of the State of New York, has duly caused
this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of New York
and State of New York, on the 4th day of November, 1997.
THE CHASE MANHATTAN BANK
By /s/ David G. Safer
-----------------------
/s/ David G. Safer
3
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1997, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Millions
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .................................... $ 13,892
Interest-bearing balances ............................ 4,282
Securities:
Held to maturity securities ............................. 2,857
Available for sale securities ........................... 34,091
Federal funds sold and securities purchased under
agreements to resell ................................. 29,970
Loans and lease financing receivables:
Loans and leases, net of unearned income .... $124,827
Less: Allowance for loan and lease losses ... 2,753
Less: Allocated transfer risk reserve ....... 13
-------
Loans and leases, net of unearned income,
allowance, and reserve ............................... 122,061
Trading Assets .......................................... 56,042
Premises and fixed assets (including capitalized
leases) ................................................. 2,904
Other real estate owned ................................. 306
Investments in unconsolidated subsidiaries and
associated companies ................................. 232
Customers' liability to this bank on acceptances
outstanding .......................................... 2,092
Intangible assets ....................................... 1,532
Other assets ............................................ 10,448
--------
TOTAL ASSETS ............................................ $280,709
========
4
<PAGE>
LIABILITIES
Deposits
In domestic offices .................................. $ 91,249
Noninterest-bearing .........................$ 38,157
Interest-bearing ............................ 53,092
------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ............................................ 70,192
Noninterest-bearing .........................$ 3,712
Interest-bearing ............................ 66,480
Federal funds purchased and securities sold under agree-
ments to repurchase .................................. 35,185
Demand notes issued to the U.S. Treasury ................ 1,000
Trading liabilities ..................................... 42,307
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less ........ 4,593
With a remaining maturity of more than one year
through three years .................................. 260
With a remaining maturity of more than three years 146
Bank's liability on acceptances executed and outstanding 2,092
Subordinated notes and debentures ....................... 5,715
Other liabilities ....................................... 11,373
TOTAL LIABILITIES ....................................... 264,112
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ........... 0
Common stock ............................................ 1,211
Surplus (exclude all surplus related to preferred stock) 10,283
Undivided profits and capital reserves .................. 5,280
Net unrealized holding gains (losses)
on available-for-sale securities ........................ (193)
Cumulative foreign currency translation adjustments ..... 16
TOTAL EQUITY CAPITAL .................................... 16,597
--------
TOTAL LIABILITIES AND EQUITY CAPITAL .................... $280,709
========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do
hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the appropriate Federal
regulatory authority and is true to the best of my knowledge and
belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us, and
to the best of our knowledge and belief has been prepared in
conformance with the instructions issued by the appropriate Federal
regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR. )
5
