Text

Statement of Matl Facts as to Which There Is No Genuine Issue
	ML20098C981
Person / Time
Site:	05000000, Washington Public Power Supply System
Issue date:	08/24/1984
From:	; WASHINGTON PUBLIC POWER SUPPLY SYSTEM
To:	;
Shared Package
ML20093C821	List: GO2-76-563, Application for Ol.Environ Rept - OL Stage Also Encl. W/O Environ Rept; ML20093C818; ML20096H672; ML20096H687; ML20096H696; ML20096H709; ML20098C636; ML20098C644; ML20098C647; ML20098C657; ML20098C670; ML20098C683; ML20098C691; ML20098C698; ML20098C708; ML20098C712; ML20098C722; ML20098C747; ML20098C749; ML20098C757; ML20098C759; ML20098C766; ML20098C771; ML20098C776; ML20098C807; ML20098C837; ML20098C852; ML20098C863; ML20098C876; ML20098C883; ML20098C885; ML20098C910; ML20098C933; ML20098C936; ML20098C944; ML20098C957; ML20098C966; ML20098C976; ML20098C981; ML20098C987; ML20098C998; ML20098D000; ML20098D009; ML20098D014; ML20098D028; ML20098D036; ML20098D047; ML20098D057; ML20098D068; ML20098D070; ... further results
References
	CON-WPPSS-126, FOIA-84-603 CPA, NUDOCS 8409270308
	Download: ML20098C981 (133)
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC ENERGY AND LICENSING BOARD In the Matter of

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WASHINGTON PUBLIC POWER

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Docket No. 50-460-CPA SUPPLY SYSTEM

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8-Vf-N (WPPSS Nuclear Project No. 1)

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STATEMENT OF MATERIAL FACTS AS TO WHICH THERE IS NO GENUINE ISSUE

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1 1

Pursuant to 10 C.F.R.

$ 2.749(a), the Washington Public Powcr Supply System (" Licensee") hereby sets forth a statement of the material facts as to which there is no genuine issue to be heard:

1.

ite Licensee is a municipal corporation and joint operating agency of the State of Washington, organized under the laws of the State of Washington.

RCW Ch. 43.52:

Af fidavit of Alexander Squire Regarding the Construction De ferral at WNP-1

(" Squire Affidavit") at 1.

2.

The Licensee is authorized to acquire, construct and operate works, plants and facilities for the generation and/or transmission of electric power and energy.

Squire Affidavit at 2.

8409270308 e40824 PDR FOIA COMENB4-603 pyg L

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v 3.

The development of electric demand forecasts is per-formed by the Bonneville Power Administration ("BPA") and the Pacific Northwest Electric Power and Conservation Council.

Squire Affidavit at 2.

4.

Financing of the construction of WNP-1 has been 1

through the sale of bonds.

Squire Affidavit at 4.

4 5.

Repayment of those bonds is ultimately based on the i

obligation of BPA to pay out of its rate revenues the bonds issued to finance the construction of WNP-1.

Washington Public Power Supply System (WPPSS Nuclear Projects No. 1 and No. 4), LDP-75-72, 2 NRC 922, 925 l

(1975).

6.

BPA has the authority to disapprove the sale of bonds by Licensee to finance the construction of WNP-1.

Squire Af fidavit at 4.

7 On April 19, 1983, BPA recommended based on its d emand forecasts that WNP-1 be deferred for two to five years.

Squire Af fidavit at 5.

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L 8.

The Licensee subsequently developed several alternatives to the BPA recommendations.

Squire Affidavit 1

at 6.

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' 9.

On April 23, 1983, BPA advised Licensee that none of these alternatives was acceptable; that the BPA recommendation was the only prudent course of future e

conduct; and that BPA would not approve any financing plan inconsistent with its recommendation.

Squire Affidavit at i

i 7.

i 10.

In view of this recommendation and the resulting inability of Licensee to sell bonds to finance the con-struction of WNP-1, Licensee decided to adopt the BPA recommendation and defer the construction of WNP-1 from two to five years.

Squire Affidavit at 4, 6-8.

11.

Af ter making this decision, Licensee sought from the Nuclear Regulatory Commission an extension of its construction permit based on the BPA recommendation and the resulting inability of Licensee to finance the construction of WNP-1.

Squire Af fidavit at 8.

12.

The two to five year duration of the constraction permit extension is commensurate with the length of the construction deferral recommendation by BPA for WNP-1.

Squire Affidavit at 8.

I.ttachment B

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Baarb af Etrettars

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Ersalution No. m 9

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A RESOLUTION PROVIDING A PLAN AND SYSTEM FOR THE ACQUISITION AND CONSTRUCTION BY WASHING.

TON PUBLIC POWER SUPPLY SYSTEM OF A UTILITY SYSTEX CONSISTING OF A NUCLEAR GENERATING PLANT AND ASSOCIATED FACILITIES TO BE ENOWN

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AS THE WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NO.1. AND PROVIDING FOR THE ISSUANCE OF REVENUE BONDS POR SAID PURPOSE.

t 9

4 6=

l TABLE OF CONTENTS PACE RactrAts.......................................................

1 ARTICLE I Cs:TAIN DEFfxmoNs SacTrow 1.1. Deiinitions........................................

5 ARTICLE II Fixn!xcs AND DETIEMINAT!oNs WITE RasFre? To Txt HAstoan Paoi CT AND TW: ExzsTtsc Pown FAc:z. mss SecTrow 2.1.

Inoperability o f the N PR...........................

13 Szctrow 2.2. Reports and Other S urveys.........................

14 Szcfrow 2.3. Agreemets with ERD A............................

13 Sectrow 2.4.

Execution and Delivery of the WPPSS No.1 Project Agreemet. WPPSS.No.1 Project Net Billing Agreemets and WPPSS No.1 Projec:

Exchange Agreemets..............................

13 Smertow 2J. Findirigs and Determinatierts Stade by Resolution No. 690 With Respect to the Plan and Syst'em for the WPPS5 No.1 Project :ipecsed and Adopted by Resolution No. 606................................

17 Szctrow 2.6.

C pinions o f Counset...............................

18 ARTICLE III Tat Pt.Ax Aso STsTtx Scerrox 3.1. Findings and Determinations.......................

18 Sect:ox 3.2.

Pian and S ystem..................................

19 SacT:cx JJ. 3!odiEcstion o f Plan and System...................

22 Ster:ow 3.4.

Cost of Plan and Systen...........................

22 Secrtox 3.3. SufEciency of Reveues............................

22 ARTICLE IV At Tsonz1AT:oM AND IastlAxCE of BONDS SacTrox 4.1.

Artl.Mr.ation of Bonds............................

23 SacTrow 42. Authorization of 1975 Bonds.......................

23 Se:Trox 4J. Redemption of 1975 Bonds..........................

25 SecTtow 4.4 Authorizanon of Seria of Boeds Other Than 1975 Bonds............................

26 1

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11 ARTICLE V a

GsusaAz. Tsans Ann Paonstows or Bonos Pact Szenow 5.1. Execution and Payment of Bonds....................

28 Szenow 5.2. Bonds are Negotiable Instruments...................

29 Secues 5.3. Registration Books; Registration of Coupon Bonds as to Pruunpal Only..................

30 Stenow 5.4.

Transfer of Registered Bonds.......................

JO Sacmw 5.5. Exchange o f Bonds................................

31 SzeneN 5.6.

Disposition of Bonds Surrendered in Exchange or Transfer; Charges for Exchange and Transfer........

32 Esenow 5.7.

Payment of Bonds and Interest......................

32 Szenow 5.3.

I.ost, Destroyed or 5!utilated Bonds..................

33 Sacnow 5.9.

Limitation on Duty of System to Register, Exchange or Trans f er Bonds........................

34 Szenow 5.10. Destruction of Bonds on Pannent. Exchange or Trans f er.........................................

34 ARTICLE VI Rzzsumon or Bowes Sec ton 6.1.

Time o f Redemption...............................

34 Szenow 6.2. Selecuen of Bonds for Redemption.................

35 Szenow 6.3. Notice o f Redemption.............................

35 Szenow 6.4.

Payment of Redeemed Bonds; When Interest on Bonds Called for Redemption Ceases to Accrue..............

36 Szenow 6.5. Redeemed Bonds Not to be Reissued.................

38 i

ARTICLE VII CazAnoN or SFsCIAt. Fenos Ann Accouwis.

ANo PArxzwis Tutaznow Szenen 7.1. Revenue Fund.....................................

38 Szenow 7.2.

Payments to Revenue Fund Created Pursuant to Resolutico No. 178................................

40 Szc;:ow 7.3. Bond Fund......................................

41 i

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i Pact Sze:rox 7.4.

Bonds Charge Only Apinst Bond Fund and Encys Ptedged Thereto: Bonds Prior Chat':e Over Other Charges and Claims Against Bond Fund..............

47 See:ron 7.3. Fuel Fund........................................

47 Sce:rox E6. Reserve and Contingency Fund......................

.58 30 Sce:tox 7.7.

Surplus Encys Ssciron 7.3. Investment o f Funds...............................

30 Scc :ox 7.9. Construction Fund; Application of Proceeds of Sale of Bonds............................................

52 See:ron 7.10. Investment o! mneys in Construcion Fund..........

53 SzcTrox 7.11. Cost of Construction...............................

56 l

Ster:ox 7.12. maner of Paying Cost of Construe: ion..............

58 t

Sec; tex 7.13. Revo ving Fund..................................

60 Stcr:ox 7.14. Distribunon of Encys in Construction Fund.........

61 Stettox 7.13. Payment of Funds in Construction Fund to Bond Fund j

Trustee 61 l

Sze :cx 7.16. Encys in Construction Fund Pending the Application Thereof.

62 ARTICLE VIII Arroix xts:. Qt:AurtcArtos. Restex4;:ox. Rzuov4 Powrzs, Dt:::xs Axo I.zaaruitzs or :st Tat:sTzzs Axo PAYrxc Acts:s Sec :ox

3.1. Construe

ion Fund Trustee...........

62 Sec :ox 8.2.

Bond Fund Trustee..

62 63 l

See: ton 8.3.

Resignation of Trustees Szer:ox 8.4.

Appointment of Paying Agents: Each Panng Agent to Hold meey in Trust.........

M l

Sec;:ox 8 3. Acion by Bond Fund in.tstee in Payme=: of Bonds 9

1 i

Src tos 3.6.

Duties and Obliptions of the Trustees 9

Szc;:nx 8.7. Evidence en Which Trustees and Paying Agents 63 my Ac:

Sze:ron 8.8. When Trustees Not Required to Ac:..............

63 Szer:ox 8.9. Compensation of Trustees and Paying Agents.........

63 Szctrox 8.10. No I.iabuity of Trustees for Cerreemess of Rectal.:

66

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iv Pact Sec; ton 3.11. Evidence on Which Trustees May Rely: Rights of Trustees to Dealin Bonds and Any Other Obligations of the System...........................

66 ARTICLE IX Ts Consrat:cTzow Excistza Szc;tox 9.1.

Appointment of Construction Engineer...............

67 Sectron 9.2.

Construction Engineer Noc to be Employed as Consulung Engineer...............................

67 Sec;tox 9.J.

Duties of Construction Engineer.....................

68 Sect:ox 9.4 Report When WPPSS No.1 Projee Ready for Normal Continuous Operanon......................

68 Sec;:ox 9.5.

Detads of Report When WPPSS No.1 Projee Ready for Normal Continuous Ooerstion or the Dare of Commercial Operation, Whichever is Later...........

69 See::ox 9.6.

Report on Final Completion of the WPPSS No. 1 Projec....................................

70 Statex 9.7.

Estr.are of Cost of Cor.struction and Esnm2re o f Cate of Pay =ent.......................

TO ARTI'"7 7 X CoYrNAxTs to Stevez Bo:cs St =:ox 10.1. Ce: ain Coveants bv the System With Respect to Resolution No. 178.............................

70 Sec;tox 102. To Complete the WPPSS No.1 Projec: To Maintain the Properties of the WPPSS No.1 P-oiec:

To Keep the WPPSS No.1 Projec in Good Repur...

72 Szcitos 10.3. t*se of WPPSS No.1 Proiec Capability. Power and Energy: Suscency of Revenues 72 Ste:tox 10.4. To Fix. Establish. Maintain and Collec Suscient Razes and Charges...............................

74 i

Sectrox 10.5. Not to Amend WPPSS No.1 Projee Exchange Agreements. WPPSS No.1 Project Net Billing Agreemmes and WPPSS No.1 Project Agreement.

74 l

Sec;rox 10.6. Not to Furnish Facilities of the WPPSS No.1 Projm Free of Charge; Enforcement of.wounts Due..

75 Sac; ox 10.7. Additional Obligancas.............................

75 Sze: tor 10.8. Not to h=W or Dis Properties............ pose of WPPS S No. 1 Project 79 w s g.w w g, we,.g-,

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Y 7Act 81 See:rox 10.9. Insurance........................................

82

< cct:ox 10.10. Books o f Account ; Annual Audit....................

83 l

s ec:ro x 10.11. Consulting Engineer...............................

Sscitox 10.12. To Make Economically Sound Improvements and I

83

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E.uensions to the Proj ect...........................

8ec:rox 10.13. To Pay Principal. Premium and Interest of Bonds.....

83 S6 i cettox 10.14. Paying Agents.....................................

86 S ze rox 10.15. Protection of Security..............................

iscirox 10.16. Authority of Svstem to Construct and Maintain the WPPSS No.1 Project..

86 Sze rox 10.17. _ syment of Taxes. Assessmems and Other Governmental Charges and Paymen:s in I.ieu Thereof; Payment of i

I Caims........................................

86 S ce rox 10.18. Taking Any Further Action Necessary...........

87 i sc:rox 10.19. Arbitrage Bond Provision.........................

87 ARTICI.E XI Serrt.zwzxTar. Rzsci.tri:oxs Sze::ox 11.1. Adopcion of Supplemental Resolutions and Purposes Thereof...

87 Sect:ow 11.2. Supplemental Resolutien Modifving Resolution Suoject to Consent of Eondholders..............

89 Srcitos 11.3. Supplememal Resolution Afecung Trustees and Other Fiducar:es................................

89 ARTICI.E XII DurAt.t.:s AxD Raucrzs See::ox 12.1. Events o f Default...............

89 See:tox 12.2. Books of the System Open to Inspec=on............

93 Sacitox 17 3. Rights of IIolders of Bonds Upco Default:

93 Appnman o f Revenues...........................

Szcitos 12.4. Suits by Bond Fund Trustee.......................

95 Sec rox 12.3. Suits by Individual Bondholders..........

98 Sre:tox 12.5. Remedies Granted in Resolution Not Exclusive.

100 S acito s 12.7. Waivers o f Def ault................................

100 Sectros 12.S. Waiver o f Extensien I.aws.........................

101 Ste:ro x 12.9. Notice o f Def aults...............................

101 i

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ei PAcz ARTICLE XIII AmtxoMcNTs ANo Boxouot.otas' 51settscs Section 13.1. Call o f Bondhciders' 5!ectings.......................

101 Sect:ox IJ.2. Notices to Bondholders...

102 Sectron 13.3. Proxies: Proof of Ownership of Bonds, Execution of Instruaients by Bondholders............

103 Sac; ox 13.4.

Appc' tment of Officers at Bondholders

5!eeting......

104 m

Sacrios 13.3. Quorum at Bondholders' Sleetings...................

105 Sze:tox 13.6. Vote Required to Amend Resciution..................

105 Section 13.7. Obtaining Approval of Amend-at at Bondholders' Alesung..............................

106 Sect:ox 13.8. Alternate afethod of Obtainin

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/ =-- ' =...............g Approval o f 107 Ster:ox 13.9.

Amendment of Resolution In Any Res Approval of all Bcadholders..........pect by 109 Section 13.10. Exclusion of Bonds Owned by System................

109 Sac;:ox 13.11. Endorsement of Amendment on Bonds...............

109 ARTICLE XIV Foaxs or Bonos Stettow 14.1. Forms of Bonds...............................

110 ARTICLE XV 5!: scar.t.4xtoes : Derzasanct Sze: ox 111.. Resolution and I.aws a Cc itrset with Bondholders.

124 Sec; ton 15.2. Bonds No I.cnger Deemed Outstanding Hereunder...

125 Szcitox 15.3. Stoneys and Investment Securities Held by Bond Fund Trustee or Paying Agents Five Years After Due Date 127 Sacitox 15.4. Relation to WP PS S No. 1 Project Agreement........

123 Szettox 15.3. Dennition of Bonds in Article XV.................

123 ice:tox 15.6. Term " System" Includes Successors 12 See:rox 15.7. S everability......................................

1:3 Sscitox !!.S. Edective Da te.................................

129 Sce tox !!.9 R epealer........................................

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1Baarb af Birrriors EPsaluttalt No. 759 A RESOLUTION PROVIDING A PLAN AND SYSTEM FOR THE ACQUISITION AND CONSTRUCTION 3Y WASHING.

TON PUBLIC POWER SUPPLY SYSTEM OF A UTILITY SYSTEM CONSISTING OF A NUCLEAR GENERA 1'ING PLANT AND ASSOCIATED FACILITIES TO BE ENOWN AS THE WASHINGTON PUELIC POWER SUPPLY SYSTEM NUCLEAR PROJECT No.1, AND PROVIDING FOR THE ISSUANCE OF REVENUE BONDS FOR SAID PURPOSE.

WzzamAs, Washington Public Power Supply System (hereinafter refernd to as the " System") has hentofore been duly organized as a i

joint operating agency and a municipal corporation of the State of Washington, under the laws of the State of Washington (Ransed Code of Washington, Chapter 43.52), and is authorized, among other things, to acquin, construct, own, maintain, operate, develop and regulate plants, works and facilities for the generation and transmission of electric power and energy and to contract for the sale, exchange, trans.

mission or use of electric energy with any person, firm or corporation, including political subdivisions and agencies of any state, or of de United States, at fair and non-discriminatory rates; and l

WazazAs, the System, pursuant to Resolutions Nos.104 and 106, i

adopted by its Board of Dinetors on December 15,1961, and Jan:ary 19, 1962, nspectively, acquired and now owns and operates de Pack rood Lake Hydroelectric Project, and haa issued revenue bonds of the System to pay the cost of acquiring and constructing such project, which bonds are payable solely from the nvenues derived therefrom; and Wuzanas, the System. pursuant to Besolution No.173. adopted by l

its Board of Dinetors on April 15,1963 (hereinafter nferred to as l

"Besolution No.175"), acquired and now owns and operates the Hanford Project (hereinafter dedned), and has issued revenue bonds of the System to pay the cost of acquiring and constructing such project, i

l I

2 which bonds are payable solely from the revenues derived therefrom; and W=n a the System, pursuant to Resolution No. 640, adopted by its Board of Directors on June 2G,1973, is acquiring and constructing the Washington Public Power Supply System Nuclear Project No. 2, and has issued revenue bonds of the System to pay a part of the cost of acquiring and constructing such project, which bonds are payable solely from the revenues derived therefrom; and Wanra the System, pursuant to & solution No. 673, adopted by its Bcad of Directors on October 10,1973, provided for the construe.,

tion Ly the System of the Washington Public Power Supply System Nuclear Project No. 3 and the acquisition by the System of an undi-vided ownership interest therein, and has issued revenue notes of the System to pay a part of the cost of acquiring and constructing such project; and Wazar.as, the System. pursuant to & solution No. 767, adopted by its Board of Directors on July 24,1975, prodded for the acquisition and construction by the System of the Washington Public Power Supply System Nuclear Project No. 4. and for the construction by the System of the Washington Public Power Supply System Nuclear Project No.

5 and the acquisition by the System of an undivided ownership interest therein. and has issued revenue bonds of the System to pay a part of the cost of acquiring and constructing such projects; and Wmm said Lsolutions Nos. IM,106,175 and 40 each prodde that the System may issue, and said hsolutions Nos. 673 and 767 each permit the System to issue,its revenue bonds to pa.r the cost of acquir.

ing and constructing a separate utility system and pledge the revenues derived therefrom to the payment of said bonds issued to pay the cost of acquir:sg and constructing said separate utility system; and Wazar.as, in order to help provide for the power needs. 'acth actual and prospective, of the members of the Svstem and certain other wholesale power purchasers in the State of Washington and the PaciEc

3 Northwest (hereinafter denned as "WPPSS No.1 Project Partici.

pants"), the System has heretofore taken certain actions to obtain for the System and the WPPSS No.1 Project Participants a power supply to consist of a nuclear generating plant and associated facilities, to lie constructed or acquired by the System as a separate utility system to be known as the Washington Public Power. Supply System Nuclear Project No.1 (hereieniter denned as the "WPPSS No.1 Project"); and Watasu, the System has entered into a contract with the United States of America, Department of the Interior, acting by and through i

the Bonneville Power Administrator (hereinafter referred to as the

" Administrator"), with respect to the construction and operation of the i

WPPSS No.1 Project by the System; and f

I i

Wasar.u. the WPPSS No.1 Project is part of the Hydro Therinal Power Program for the Pacide Northwest: and Wraar.u. the System haa entered into contracts # hereinafter de-fined as the "WPPSS No.1 Project Exchance Agreements") with the Adndnistrator and certain of the WPPSS No.1 Project Participants whereby, among other things, the System acrees to sell and said Par-ticipants agrae to purchase a portion of the WPPSS No.1 Project capability; and said Participants and the Administrator have agreed to exchange said Participants' respective shares of said espability for electric power and energy delivered b-the Administrator in accordance with the terms of said Agreements; and WanzaAs, the System has entered into contracts (hereinafter dedned as the "WPPSS No.1 Project Net Billing Agreements) with the Administrator and the other WPPSS No.1 Project Participants l

whereby, among other things, the System agrees to sell and said l

Participants agree to purchase the balance of the capability of the WPPSS No.1 Project: the WPPSS No.1 Project Participants agree to assign their respective shares of said espability to the Administrator and the Administrator agrees to acquire all of said -hares of the Par.

ticipants. The System and each of the WPPSS No.1 Project Partici.

pants which is a party to said WPPSS No.1 Project Net Billing Agree, s

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l i

4 ments hr.ve determined that the sale by & System to seh Participants l

of its share of 6 espability of the WPPSS No.1 Project and 6 assignment thereof by such Participant to the Administrator will be l

benedeial to it by reducing & cost of and increasing the amounts of arm power and energy which will be available to serve its members or i

customers in the future; and J

W-a the Administrator has determined that the exchanp of power as provided in the WPPSS No.1 Project Exchange Agreements and the acquisition of the WPPSS No.1 Project Participants' shares of capability of the WPPSS No.1 Project as provided in the WPPSS No.

i 1 Project Net Billing Agreements will assist la attaining the objectives I

of the Bonneville Project Act and other statutes which pertain to 6 i

disposition of electric power and energy from projects of the United States of America in & Paciac Northwest by enabling the United States of America to make optimum use of the Federal Columbia River Power System, and that 6 integrntion of 6 espability of the WPPSS No.1 Project with the generating resources of the Federal Columbia River Power System will enable the Administrator to make available i

additional arm power and energy to meet the needs cf his customers; and i

Wnans, the System has heretofore obtained certidestion of the j

WPPSS No.1 Project site by the State of Washington and a limited work authorization from the United States Nuclear Regulator. Com.

I mission; and b System expects to obtain a construction permit from said Commission in late 1975 or early 1976 to enable it to proceed with the construction of the WPPSS No.1 Project; and Wnnus, the System has heretofore issued One Hundred Two MlIlion Dollars ($102,000,000) prmeipal amount of revenue notes for 6 purpose of paying the cost of prelimmary work and expenses in connection with & WPPSS No.1 Project, Seventy.Seven Million Dol.

lars ($77,000,000) principal amount of which notes are presently out.

standing and unpaid; and Warans,6 System now deems it advisable to proceed with the acquisition and constreetion of the WPPSS No.1 Project and to issue its revenue bonds for the purpose of paying the cost of such acquisition

.I 5

and construction and to provide for the payment of the aforesaid presently outstanding revenuo notes issued in connection with the WPPS6 No.1 Project, Now, Tutstroar, se rr asset.vco ar ruz Boino or Dtascicas or Wisuzxotos Prauc Powta Serrr.r Srstr.x:

ARTICLE I Czants Dzrtsmoss Scenox 1.1.

De/nitions. As used in this Resolution the follow.

Ing words and phrases shall have the c:eanings hereinafter set forth unless the context shall clearly indicate that another meaning is intended:

(a) The term " Board" shall mean the Board of Directors of the System, including the Executive Committee thereof when acting under authority delegated to it by the Board, or if the Board shill be abol.

ished, the board. body, commission or agency succeedhg to the prmeipal functions thereof or to whom the powers and duties granted or imposed by this Resolution shall be given by law.

(b) The term " Bond Fund Trustee

shall mean the trustee ap-pointed pursuant to Section S.2 hereof, and its successor or scecessors and any other corporation which tasy at any time be substituted in its place pursuant to this Resolution.

(e) The term " Bonds" shall mess the Washington Public Power Supply System Nuclear Project No.1 Revenue Bonds of the System l

issued pursuant to and under the authority of Section 4.1 of this Reso-lation. The term "1975 Bonds" shall mean the s175,000.000 Washington t'

Public Power Supply System Nuclear Project No.1 Revenue Bonds, Series 1975, of the System initially issued pursuant to and under the authority of Section 4.2 of this Resolution. The term " bonds issued pursuant to this Resolution'shall mean the Bonds and all additional bonds issued pursuant to and under authority of Section 10.7 of this j

Resolution.

(d) The term " Bondholder" or " holder of a bond" shall mean any person who shall be the bearer of any coupon bond or bonds issued s

1.1

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pursuant to this Resolution, or the registered owner of any bond or bonds issued pursuant to this Resolution without coupons.

(e) The term " Capitalized Fuel" shall mean all Fuel the cost of which shall have been paid before the Date of Commercial Operation.

(f) The term " Construction Engineer" shall mean at any time the ecastruction engineer or engineering titta appointed pursuant to Sec.

tion 9.1 hereof.

(g) The term"Constructios Fund Trustee" shall mean the trustee appointed pursuant to Section S.1 hereof. its successor or successors and any other corporation which may at any time be substituted in its place pursuant to this Resolution.

(h) The term " Consulting Engineer" shall mean at any time the-consulting engineer or engineering nem appointed pursuant to Section 10.11 hereof.

(i) The term " Cost of Construction" shall mean all costs paid or incurred by the System in connection with the planninn. acquisition and construction of the WPPSS No.1 Project, as such costs are dedned in Section 7.11 of this Resolution.

(j) The term"Date of Commercial Operation ~ shall =ean the date axed by the System and the Administrator pursuant to the WPPSS No.1 Project Agreement as the point in time when the WPPSS No.1 Project is ready to be operated on a commercial basis pursuant to schedules agreed to by said parties.

(k) The term " Dual Purpose Operation" shall have the same meaning as in the Hanford Project Exchange Agreements.

(1) The term"ERDA" shall mean the Energy Research and Devel.

opment Administration of the United States, a successor to the Atomic Energy Commission of the United States, unless such term shall be used in a context applicable to a point la time occurring before Jann.

ary 19,1973, in which case such term shall mean said Commission.

(e) The term " Existing Power Facilities" shall mean the power l

house with two turbine generator units with a combined nameplate rating of $60 megawatts and related auxiliary equipment, transforma.

tion and transmission facilities, heretofore acquired and constructed by the System in connection with the Hanford Project.

See.1.1

7 (n) The term " Fuel" shall mean any nuclear fuel, fuel assemblies and components. and rights relating thereto, including any and all nuclear material therefor, together with all associated and related prop-erty incilent to the acquisition, processing. reprocessing and disposal of the nuclear fuel used or usable in connection with the acquisition. con-struction, maintenance and operation of the WPPSS No.1 Project.

(o) The term"Hanford Project" shall mean the works. plants and facilities heretofore acquired and constructed by the System for the generation, transformation and transmission of electric power and energy in conjunction with ERDA's New Production Reactor, pursuant to Resolution No.178.

(p) The term "Hanford Project Exchange Agreements" shall mean the agreements dated April 12. 1963, for the sale by the Systerr of power and enerer from the Hanford Project to the Hanford Project Participants, and the exchange thereof by such Participants with the Administrator for arm energy and capacity, and entered into among the Admtnistrator, the System, and each of the Hanford Project Par.

ticipants.

(q) The term "Hanford Project Participants" shall mean the public utility districts and other wholesale power purchasers. both pub-lie ami private. listed in subparagraph H of Section 1.1 of Resolution No.175. which are parties to Hanford Project Enchange A.treements.

(r) The term " Investment Securities'shall mean any of the fol-lowing,if and to the extent that the same are now or hereafter become legal for the investment of funds of the System:

1.

Direct obligations of. or obligations the principal of and interest on which are unconditionally guaranteed by. the Uni:ed States of Ameries;

2. General obligation bonds of any state of the United States of Arnerica rated by any nationally recognized bond rating agency in either of the two highest rating categories assigned by such rating agency;

3. Bonds, debentures. notes or participation certi$ cates is.

sued by the Bank for Coolseratives, the Federal Intermediate Credit Bank, the Federal Home Loan Bank System. the Export.

Import Bank of the United States, Federal Land Banks or the 5.e.1.1 l.

l.'

l S

Federal Natlocal Mortgage Association or of any other agency of the United States of America or of any corporation wholly owned by the United States; 4.

Public Housing Bonds or Project Notes issued by Public Housing Authorities and fully secural as to the payment of Imth peine; pal and interest by a pledge of annual contributions to be paid by the United States of Junerica or any agency thereof; and

5. Evidences of indebtedness issued by any corporation or.

ganized and elisting under the laws of any state of the United States of America rated by any nationally recognized bond rating agency in either of the two higt.est rating categories assigned by such rating agency.

6. Bank time deposits evidenced by certi8 cates of depesit, and bankers' acceptances, issued by any bank, trust company or national banking association authorized to do business in the State of Washington. which is a member of the Federsi Reserve System, provided that the aggregate of such bank time deposits and bankers' acceptances issced by any bank. trust company or banking association do not exceed at any one time afty per centum t$0G) of the aggregato of the capital stock. surplus and undivided prodts of such bank, trust company or banking association.

7. Bank time deposits evidenced by certi6 cates of deposit, and bankers' acceptances, issued by any bank. trust company or national banking association authort:ed to do businest in any state of the United States ol Ameries other than the State of Washing.

ton, which is a member of the Federal Reserve System. provided that the aggregate of such bank time depcaits and bankers' accept.

anees issued by any bank, trust company or banking association do not exceed at any one time twenty Ave per centum d5%) of the aggregate of the capital stock, surplus and undivided prodes of such bank, trust company or banking association and provided fur.

ther that such capital stock, surplus and undivided prorits aa!!

not be less than Fifty Million Dollars (450,000,000).

(s) The term "1963 Bonds" shall mean the System's Hanford Project Electric Revenue Bonds. Series of 1963. issued pursuant to and under the authority of Resolution No.178, for the purpose of ac.

See.1.1 l

(

9 quiring and constructing the Hanford Project, and for the other pur.

poses prescribed in Lsolution No.178, at any time outstanding and unpaid from and after the efective date of this Resolution.

(t) The term "1974 Notes" sha11 mean the Seventy.Seven Million Dollars (s77,000,000) principal amount of Washington Public Power Supply System Nuclear Project No.1 Revenue Notes, Series 1974, issued pannant to Resolution No. 690, all of which notes are presently outstanding and unpaid.

(u) The term " Operating and Construction Contract" shall mean

Contract No. AT (451).1355, entered into by and between the United States of America, represented by ERDA, and the System, dated April 11, 1963, as supplemented from time to time, with respect to the con.

struction and operation of the Hanford Project by the System.

(v) The term " outstanding", when used with reference to any bonds issued pursuant to this bsolution, shall have the meaning set forth in Section 15.2 hereof.

(w) The term " Period of Construction" shall mean the period of time beginning with the date of adoption of this hoolution and ending on the date of Sling of the report by the Construction Engineer pur.

scant to Section 9.6 hereof.

(I) The term " Resolution" shall mean this msolution, except when used in Articles III and IIII hereof, in which esse the term "Resolu.

tion" shall have the meaning as dedned in Section 12.1 hereof.

(y) The term " Resolution No. 606" shall mean Resolution No. 606, adopted by the Board on February 5,1M3.

(2) The term "Lsolution No. 690" shall mean Resolution No. 690, adopted by the Board on May 10,1974.

(aa) The term " Series of Bonds" or " Bonds of a Series" shall mean a series of Bonds authorized by this msolution or by a Series Resolution.

(bb) The term " Series Resolution" shall mean a resolution sup.

plemental to the Resolution authorizing the issuance of a Series of Bonds.

(ee) The term "WPPSS No.1 Project" shall mean the Washing.

ton Public Power Supply System Nuclear Project No.1 of the System See.1.1

l 10 l

as more fully described in Article III hereof and all additions, better.

ments and improvements thereto and extensions thereof, but shall not i

melude any generation. transmission and distribution facilities hereto.

l fore or hereafter constructed or acquired by the System as a separate i

utility system and created or established from funds other than the proceeds of bonds issued pursuant to this Resolution.

4 1dd) The term "WPPSS No.1 Project Agreement" shall mean I

the agreement dated February 6,1973, designated " Washington Public Power Supply System Nuclear Project No.1 Agree =ent" (Contract l

No.14 03 39211), as amended by Amendatory Agreement No.1 thereto, dated as of May 31,1974, with respect to the construction and opera-tion of the WPPSS No.1 Project by the System, ed entered into by i

l and between the Administrator ud the System.

(ee) The term "WPPSS No.1 Project Exchange Agreements

shall mean the agreements dated February 6,1973, designated "W2.sh.

ington Public Power Supply System Nuclear Project No.1 Agreement" (Contraet Nos.1M3-30212 to IM3-39216, inclusive), each as amended by Amendatory Agreement No. I thereto, dated as of May 31. 1974, for the sale by the System of power and energy from the WPPSS No.1 Project to Paci:le Power & L.ight Company, Portland General Electric

{

Company, Puget Sound Power & Light Company, The Montana Power Company and The Washington Water Power Company, ud the i

exchange thereof by such Participants with the Administrator for drm i

energy and capacity, and entered into by and between the Ad=inistra.

l tor, the System and each of the aforesaid electrie utility companies.

(ff) The term "WPPSS No.1 Project Net Billing Agreements' shall =ean the agreements dated February 6.1973, designated " Wash.

ington Pnblic Power Supply System Nuclear Project No.1 Agreement" (Contract Nos. IM3 39217 to IM3-39300, inclusive). each as amended I

by Amendatory Agreement No.1 thereto, dated as of May 31,1974, for

[

the sale by the System of power and energy from the WPPSS No.1 Project to certain of the WPPSS No.1 Project Participants and the a.ssignment thereof to the Adminstrator, and entered into by and between the Ad=inistrator, the System and each of the WPPSS No.1 Project Participants with the exception of the WPPSS No.1 Project Participants which are parties to the WPPSS No.1 Project Ezehange Agreements.

i

~

f ee.1.1 l

~

11 (gg) The term -WPPSS No.1 Project Participants" shall mean the parties to the WPPSS No.1 Project Exchange Agreements other than the Administrator and the System, together with the parties to the WPPSS No.1 Project Net Billing Agreements listed below:

Cityof Albion. Idaho City of Bandon. Oregon Public Utility District No.1 of Benton Cosnty, Washington Benton RuralElectric Association Big Bend Electric Cooperative. Inc.

Blachiv. Lane County Cooperative Electric Association City of Blaine,Washir.gton City of Bonners Ferry, Idaho City of Burley, Idaho Cityof Canby,Oregen City of Cascade Locks, Oregon Central Electrie Cooperative,Inc.

City of Centralia Washington Central Lincoln Peoples' Ctility District Public Ctility District No.1 of Chelan County, Washington City of Cheney. Washington Public Utility District No.1 of C!allam County. Washington Public Ctility District No.1 of Clark County, Washington Clatskanie Peoples' Ctility District Clearwater Power Company Colum'la Basin Electric Cooperative,Inc.

Columbin Power Cooperative Association,Inc.

Columbia Rural Electric Association, Inc.

Consolidated Irrigation District No.19 Consumers Power,Inc.

Coos. Curry Electrie Cooperative,Inc.

Town of Ccalee Dam, Washington Public Utility District No. l of Cowlitz County, Washington City of Declo,Ibho Public Ctility District No.1 of Douglas County, Washington Douglas Electric Cooperative, Inc.

City of Drain. Oregon The East End Mutual Electric Co., Ltd.

City of Ellensburg, Washington See.1.1

I l

l 12 l

City of Eugene, Oregon i

Fall River Rural Electric Cooperative, Inc.

Farriers Electric Co., Ltd.

Public Utility District No.1 of Ferry Couty, Washington Flathead Electric Cooperative, he.

City of Forest Grove, Oregon Public Ctility District No.1 of Franklin County, Washington Public Utility District No. 2 of Grant County, Washington g

l Public Utility District No.1 of Grays Harbor Conty, Washington Harney Electric Cooperative, he.

City of Heyburn, Idaho Hood River Electric Cooperative l-Idaho County Light & Power Cooperstive.issociation, he.

City ofIdaho Falls, Idaho bland Power & Light Company l

Public Utility District No.1 of Kittitas County, Washington Public Utility District No. l of Klickitat County, Washington Ecoteul Electric Cooperative, he.

Lane Electric Cooperative, he.

Public Utility District No. l of Lewis County, Washington Lincoln Electric Cooperative, Inc. (Montana)

Lincoln Electric Cooperative,Inc. (Washington)

Lost River E!ectric Cooperative,Iu.

l Lower Valley Power & Light, he.

Public Ctility District No.1 of Mason County, Washington l-Public Ctility District No. 3 of Mason County, Washington Town of McCleary, Washington City of McMinnville, Oregon Midstate Electric Cooperative, he.

City of Milton Freewater, Oregon City of Minidoka, Idaho Mi.ssoula Electrie Cooperative, be.

City of Monmouth. Oregon i

Nespelem Valley Electric Cooperative, he.

Northern Lights, Inc.

Northern Wasco County Peoples' Ceility District Okanogan County Electric Cooperative, Inc.

Public Utility District No.1 of Okanogan County, Washington Orcas Power and Light Company s

1.2

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13 Public Utility District No. 2 of Pacific County, Washington Public Utility District No.1 of Pond Oreille County, Washington City of Port Angeles, Washington Prairie Power Cooperative,Inc.

Raft River Rural Electrie Cooperative. Inc.

Ravalli County Electric Cooperative,Inc.

City of Richland. Washington Riverside Electric Company, Ltd.

City of Rupert, Idaho Rural Electric Company Salem Deetric Calmon River Eeetric Cooperative, Inc.

City of Seattle. Washingtes Public Utility District No.1 of Sk===ai= County, Washington Public Utility District No.1 of Snohomish County, Washington South Side Beetric Lines,Inc.

City of Springfeld, Oregon Cityof Sumas. Washington Surprise Valley Doctridention Corporation City of Tacoma. Washington Tanner Electric Tillamook Peoples' Utility District Umatilla Eectric Cooperative Association Unity Light and Power Company VersIrrigstion District No.15 Vigilante Eectrie Cooperative, Inc.

Pnblic Utility District No.1 of WaW4 m County, Washtngton Wasco Eeetric Cooperative,Inc.

Wells Rural Electric Company West Oregon Electric Cooperative. Inc.

Public Utility District No.1 of Whatcom County, Washington ARTICLE II Factros aso Dc zaxmanoss w::n Resne: To :xz Hasrono Paoner Aso raz E.turno Powra Fie:u::ss Sacnos 2.L Inoperability of the NPR. On Augast 17,1972, the Artmmistrator, after reviewing studies prepared by independent con.

sulting engineers retained by the Administrator and approved by the l

Seen.1.1 and 2.1 l

l l

14 System notiSed the System that the Hanford Project will be inoperable when ERDA ceases to operate its new production reactor on its Hanford Reservation (the "NPR") for the purposes of ERDA and the produe.

tion of steam energy; that such inoperability will continue for the period necessary to make repairs, replacements and modi $ cations to the NPR as a commercially licensable project; that the costs of the required repairs, replacements and modineations had been demonstrated to be beyond the scope of economic feasability: and that in the absence of a substantial change in the physical condition of the NPR. the require.

ments of ERDA. or other signiScant factors constituting the basis of the studies of the said independent consulting engineers, the Ad=inis.

trator could not approve the expenditure of funds for the purpose of malcng such repairs, replae.ments and modineations, and at the appro.

priate time the Administrator would be required to direct the Srste.m to discontinue the operation of the Hanford Project in secordance with the provisions of Section 5 (i) of the Hanford Project Exchange Agreements.

Szer:os 11 Reports and Other Surveys. The Board caused to be made and submitted to it, and was furnished with. various engi.

neering reports surveys, economic and leent studies and reports wtth respect to (1) the engineering and economic feasibility of continuing tne operation of the Hanford Project from and siter the date ERDA ceases to operate the NPR for the purposes of ERDA. as provided for I

in the Operating and Construction Contract. and (ii) the most practical and econonucal means for the continued utilization of the Existing Power Facilities for the production, transfor=ation and transmusion l

of electric power and energy. consistent with the System's obligstions under the Operating and Construction Contract, the Hanford Proj+ct Exchange Agreements and Resolution No.173. so as to (a) enable the System to assist in meeting the present and prospective needs of the Hanford Project Participants and the WPPSS No.1 Project Partici.

pants, including those which are members of the System. for electricity for all uses, (b) conserve the valuable public resource of the Existing Power Facilities and prevent in the public interest the economie waste which will result from the abandonment and consequen. idleness of the Existing Power Facilities from and after the date ERDA ceases to operate the NPR in a deal purpose mode if an alternate source of steam energy is not provided, and (c) enable the System to dischar;e its public functions and responsibilities in an efeient and economical manner.

Sese. 2.1 aed 2.2

I l

15 The Board. after due consideration and analysis of the said engi.

neering reports. surveys, economic and !* gal studies, accepted and concurred in the foregoing rindings and determinations of the Adminis.

trator, and found and determined that it was necessary and advisable in the public interest and in the interests of economical and efficient operation of the System and the dischstge of its public duties and responsibilities to provide for the use and employment of the Existing Power Facilities as part of the WPPSS No.1 Project in the manner set forth in Resolution No. GOG. and the Board further found, deter.

mined and declared that from and after the date upon which the Han.

ford Project became inoperable, the Existing Power Facilities should and would be modiSed, renovated and adapted and thereafter should and would be used and employed by the System as prescribed in the plan and system set forth in Resolution No. 606.

Stenox 13. Jgreements with ERDJ. The System entered into agreements with the United States of America, represented by ERDA.

designated Supplemental Agreement No. 3. Contract No. AT (451).

1355, and Supplemental Agreement No. 3. Contract No. AT (431).1357, which, among other things, settled and provided for the discharge of all obligations and liabilities of ERDA and the System under the Oper.

ating and Construction Contract. and continued the lease of the land on which the Existing Pcwer Facilities are located so as to permit the System to operate the Existing Power Facilities with an alternate source of steam energy.

The Board found and detertr.ined that in authorizin'g the execution and delivery of the said Suppletsental Agreements. it recognized the System's duties and obligations to the holders of the 1963 Bonds under Resolution No.178, and that the execution and delivery by the System of said Supplemental Agreements in no way impaired or adversely afected the rights of the holders of the 1963 Bonds, or the security for the pannent of the principal of and interest on the 1903 Bonds afforded by the provisions of the Operating and Construction Contract.

Stenos 14. E:ecution and Delivery of the TVPPSS No.1 Project Jgreement, IVPPSS No.1 Project Set Billing Agreements and TVPPSS No.1 Project E: change Agreements. The System, on February 6, 1973, executed and delivered the WPPSS No.1 Project Agreement, the WPPSS No.1 Project Net Billing Agreements and the WPPSS No.1 Project Exchange Agreements, in their respective original forms.

Sees. 2.2. 2.3 and 2.4 m

i

- l 16 By such agreements, the other parties thereto which are parties to the Hanford Project Exchange Agecments agreed, among other things, (i) to the use and employment of the Existing Power Facilities by the System for the purposes and in the manner prescribed in the plan and n.rstem specified and adopted in Resolution No. tXhi. (ii) that the electric power and energy to be produced pursuant to said plan and system, includine the electric power and energy to be produced by the Existing Power Facilities, might sud should be disposed of to the parties, in the quantities, for the periods and under the terms and conditions pre.

sertbed in such WPPSS No. L Project Exchange Apeements and WPPSS No.1 Project Net Billing A;rreements and (iii) that the execution and delivery of auch WPPSS No.1 Project Ezehange Agree.

ments and WPPSS No.1 Project Net Billing Agreementa by the said parties in no way adected, limited. modirled. altered. released or' discharged their respective rights and obligntiens ander the Hanford Project Exchange Agreements, or reduced the pannents which the Hanford Project Participants are obligated to make thereunder in order to safeguard and protect the security for the payment of the 1963 Bonds adorded by the provisions of the Hanford Project Ex.

change Agreements in the event that suficient moneys to make such payments are not otherwise available for such purpose pursuant to such WPPSS No.1 Project Exchange Agreements and WPPSS No.1 Project Net Billing Agreements.

The WPPSS No.1 Project Agreement, the WPPSS No. ? Project Net Billing Agreements and the WPPSS No.1 Projcet Ex:hange Agree =ents in their respective original forms and Resolution No. 606 provided that the Existing Power Facilities would be used as a part of and in connection with the WPPSS No.1 Project. said Project as therein described to consist of a nuclear steam supply system, a topping turbine generator with a nameplate rating of approximately 3~)0 megs.

watts, the Esisting Power Facilities, and associated facilities and to l

have a total nameplate rating of approximately 1.000 megawatts. and l

further provided that the System's costs in connection with the Hanford Project, including its costs ander Resolution No.173. would be paid from the revenues derived by the System from the WPPSS No.1 Project.

(

In order to provide funds to pay a part of the cost of the plan ar !

system specided in Besolution No. 606, the S,vstem issued Twenty F e Sw. 2.4

17 Million Dollars ($25,000.000) principal amount of Washington Public Power Supply System Nuclear Project No.1 Revenue Notes, Series 1973. Provision for the payment of the principal of said notes was made by depositing with a Paying Agent appointed pursuant to Reso-lution No. 606 a portion of the proceeds of the sale of the 1974 Notes.

Pannent of the interest on the notes issued pursuant to Resolution No.

606 had been provided for from the proceeds of sale thereof.

Sscno:t 2.5. Findings and Determinations 3 fade by Resolution

No. 690 R*ith Respect to the Plan and System for the WPPSS No.1 Project Specifed and Adopted by Resolution No. 60s. The Board found and determined in Resolution 690 that the schedule for the acquisition and construction of the WPPSS No.1 Project in accordance with the plan and system specined in Resolution No. 606 would require the shutdown of the Hanford Project on or about October 31,1977, and would e minte the availability of the Hanford Project as a source of n

power and energy until such time as a new steam supply system and other essential facilities could be provided therefor. The Administratur had advised the System that due to delays in the construction of vari-ons generating projects in the Pacine Northwest and anticipated fuel shortages, planned power generating resources under the Hydro Thermal Power Program were expected to be inadentiate to meet the needs of the Hanford Project Participants and the WPPSS No.1 Proj-eet Participants, including such Participants which were members of the System. for power and energy during the period 197S through the early 1950's. The Board, therefore, in Resolution No. 690, further found and determined that it was in the best interests of the System, the Hanford Project Participants and the WPPSS No.1 Project Par-ticipants, including such Particiesnts which were members of the System, to keep the Hanford Project available for continuous operation after October,1977, and that in order to accomplish that purpose it was appropriate that the acquisition, construction ooeration and main.

tenance of the WPPSS No.1 Project be disassociated from the opera-tion of the Hanford Project and that the said WPPSS No.1 Project not be acquired, constructed, operated or maintained in conjunction with the Existing Power Facilities. The System and the Administrator have determined that such action will be benetleial by improving the probability that sufficient electric power resources will be available to meet the requirements of said Participants in the late 1970's and early 1980's.

Sees. 2.4 and 2.3 l

l 1

13 The Board, in Resolution No. 600, further found and determined that it was advisable and in the best interests of the System, the partin to the Hanford Project Exchange Agreements and the parties to the WPPSS No.1 Project Net Billing Agreements and WPPSS No, t Project Exchange Agreements that the plan and system.9pecided in Resolution No. 606 be rescinded and that there be adopted in lieu thereof the plan and system prescribed in Article III of this Resolution, but that the arrangements originally entered into and contemplated by the WPPSS No.1 Project Agreement. the WPPSS No. t Project Lt Billing Agreements and the WPPSS No.1 Project Exchange Agre.

ments in their respective original forms with respect to the payment of the costs of the Hanford Project be carried out fully and in accordance with such agreements as presently in e!Yect. in order to protect and, secure the rights of the parties to said agreements and the holders and owners from time to time of the 1963 Bonds.

The Board hereby 8 ads and determines that the adoption of this Resolution and the performance by the System of its duties and obli.

rations under the WPPSS No.1 Project agreement, the WPPSS No.1 Project Lt Billing Agreements and the WPPSS No.1 Project Ex.

change Agreements will accomplish this latter objective.

I The Board hereby approves and rear!irms such rindings made by Resolution No.-690, and further ends and determines that it will con.

tinue to investigate the continued operation of the Haniced Project beyond October,19U, within the requirements of this Resolation, the WPPSS No.1 Project agreement. the WPPSS No.1 Le Billing Agreements and the WPPSS No.1 Exchange Agreements.

Sze:tos 2.6. Opinions of Counsel. Simultan onsly vith de adnp.

tion of this Resolution, the System has been furnished with the opinions of Messrs. Houghton Cluck Coughlin & Riley. Seattle. Washingon. an i Lssrs. Wood Dawson Love & Sabatine Lw York. Lw York, that this Resolution has been duly adopted by the Board. and that the provisions hereof are valid and binding in accordance with their terms.

1 l

ARTICLE III

\\

Tan Ptas em Stsrut Sncitos 3.1. Findings and Determinations. The Board has caus*d various engineering reports and surveys and economic and environ.

I mental studies to be made and submitted to !t with respect to de Seas. 2.3. 2.e and 3.1 i

1

o 19 present and prospective needs of the WPPSS No.1 Project Partici.

pants, including auch Participants which are members of the System, for electricity for all uses, and the Board. After due consideration and analysis of said engineering reports and surveys and economic and environmental studies. hereby llads and determines that the construe.

tion of the WPl'SS No.1 Project is necessary and advisable in order to provide for the present and prospective power and encryy needs of the WPPSS No.1 Project Participants. that the ennstruction of the WPPSS No.1 Project by the Sptem nnd the disposition of the power and energy therefrom, as provided in the WPPSS No.1 Project Ex.

change Agreements and the Wl'PSS No.1 Project Net Billing.\\ gree.

ments, will result in substantial ceonomics and advantagM to the WPPSS No.1 Projut Participants, the people of the State of Washing.

ton, and the Pacitie Northwent. and that the WPPSS No.1 Projet is economically feasible and urgvntly required to cen:::ve the resourers of the region.

The Board further finds and determines that the power and ener77 which will be produced at the WPPSS No.1 Project can be disposed of at prices suficient. with all other available revenues. to retire all Bonds, to establish reserves as herein provided, to retire the 1974 Notes and to pay the cost of operation and maintenance of the WPPSS No.1 Project and renewals, replacements and repairs thereto.

The Board hereby also dnds and determines that the public inter.

est, welfare, convenience and necessity require the acquisition and con.

struction by the System of the WPPSS No.1 Project as a separate utility system for the purpose of supplying the power needs of the WPPSS No.1 Project Participants which are members of the S. stem v

and the inhabitants thereof and any other persons, including public or private corporations, within or without their limits, with electricity for all uses.

Saenow 3.2. Pfan and System. The Sptem hereby specifies and adopts the plan and sptem hereinafter set forth for the nequisition, by purchase or condemnation. and construction of the following nuclear electric generating plant and associated facilities as a separate utility system constituting the Washington Public Power Supply Sptem Nuclear Project No.1 of the System. to wit:

A. The System shall acquire and construct a nuetear electrie generating plant and associated facilities. having a net electrical plant capability of approximately 1250 megawatts. The WPPSS No.1 Prob Sees. 3.t and 3J l

I eet shall Include, but shall not be limited to, a nuclear steam suppip system, fuel and reactor coolant systems and all related contamment structures and safety features including all instrumentation, control and auxiliary systems required therefor: turbine generator. condensers, circulating water systems and facilities and piping therefor, electrical and mechanical systems and all other equipment, facilities or appurten.

anees thereto: all electrical facilities required to deliver the output of the WPPSS No.1 Project to the Federal Columbia River Power Sys, tem; all structures, railroad sidings, shops, warehouses, construction facilities. ce!ces and all other structures, astures. equipment or facilities used or useful in the construction, maintenance. operation and adminis.

tration of the WPPSS No.1 Project and all necessary water rights, development rights, permits and licenses, leases, easements and rights of way.

B. The site of the WPPSS No.1 Project sha!! be toested on the Hanford Reservation of ERDA. north of the City of Richland in Benton County, Washington. However,in the event that the Sptom and the Administrator shall and that any order or standard of the Thermal Power Plant Site Evaluation Council of the State of Washington, the Nnelear Regulatory Commission of the United States or any other governmental apney or authority having jurisdiction makes it advisable that said site be changed, or that the feasibility of the WPPSS No.1 Project will be improved by chann of site. then the System, with the approval of the Administrator and after consultation with the WPPSS No.1 Projut Participants to the extent re'tuired by the WPPSS No.1 Project Net Billing Agruments and the WPPSS No.1 Project Ezehange Agruments, may adopt an amendatory resolu.

tion providing for such alternate site within the State of Washington which t e System ands may be feasibly inter. connected with the trans.

mission system of the Administrator. In such event, the Sptem shall make such further chanc in the plan and sptem set forth in this Section as reasonably may be deemed required to conform to such chane in site; provided. that there shall be d!ed with the Secretary of the System and the Adnunistrator a certidente of the Construet:en Enginur which shall certify that in his opinion such chane (1) is appropriate to meet the order or standard of such governmental agency or authority, or (2) will result in Impronment of the feasibility of the WPPSS No.1 Project.

l

21 i

C. The System shall obtain all perinits and licenses required by any regulatory agency or governmental authority having jurisdiction and any other licenses, permits, approvals, easements.or legal rights of any kind required for, used or useful in connection with the acquisition, t

construction, maintenance and operation of the WPPSS No.1 Project.

D. The System shall acquire, by lease or purchase, all nuclear fuel, fuel assemblies and components, and rights relating thereto, including i

any and all nuclear material therefor, together with all associated and related property incident to the acquisition, processing, reprocessing and disposal of the nuclear fuel used or usable in connection with the acquisition, construction, maintanance and operation of the WPPSS No.1 Project.

E. The System shall acquire all tools, equipment, spare parts.

automotive equipment, instruments, operators' dwellings, warehouses and other associated and related property necessary in connection with the acquisition and construction, maintenance, operation and adminis.

tration of the WPPSS No.1 Projet.

F. The System shall acquire alllands. rights in land, leans, ease.

ments, permits and other physical property related to or necessary for use in connection with the WPPSS No.1 Project. together mth all and singular, the tenements hereditaments and appurtenances belonging or in anywise appertaining to the aforesaid Project, or any part thereof.

G. Subject to the WPPSS No.1 Project.igrument, the WPPSS No.1 Project sha!! also include any additional works, plants or facilities subsquently acquired or constructed by the System for the same uses, whether or not physically connected therewith, which,if so nuthorized by resolution of the Board, may bwome additions or betterments to or extensions of the WPPSS No.1 Projet.

H. The System shallcann to be made any and all surveys, studies, appraisals and financial and enginnring investigations necessary or incidental to the location, acquisition and construction of the electrio works plants and facilities of the WPPSS No.1 Projut and the plaetng of the same into operation, including all such surveys, studies. investiga.

tions and other work necessary to comply with all environmental laws and with all environmental orders, regulations and standards of any federal or state agency having jurisdiction over the WPPSS No.1 Project now or hereafter in etfect.

s s.2 I

1 m

22 Szenos 3.3. JIodi/catioe of l' tan and System. In addition to the change of site permitted by paragraph B of Section 3.2, and subject to the WPPSS No.1 Project 4reement, the System may modify details of the foregoing plan and system. including modideations to make pro-visions for the installation of additional (setlities, provided that if such modi 6 cation occurs during the Parimi of Construetton, the system shall have died with the Construction Fund Trusteo and the Bon.1 Fund Trustu certinestes of the System and of the Construction Engsnur as to the matters set forth below, and if such modidestion occurs after the Period of Construction, the System shall have Aled with the Bond Fund Trusta entinentes o' the System and the Consulting Enginur as to the matters set forth below. Such certidentes of the System, the Construction Engineer and the Consulting Enginor shall provide that in the oplalon of the signers. such mediacation (i) does not substantiauy change the plan and system specided in Section 3.2 of this Lsolution, and (ii) is proper and necessary for the er!!cient and economical opers.

tion and maintensnee of the WPPSS No.1 Projet.

The Board ends and determines that the acquisition and construe.

tion of the WPPSS No.1 Project will properly and advantsgeously contribute to the conduct of the business of the System m an edelent and economical manner.

Szer:ox 3.4. Cost of Plan and System. The estimated cost of the plan and system herein speided and 2dopted for the acquisinon and construction of the WPPSS No.1 Project,laeluding as a part of such cost funds nuessary to be paid or set aside for Capitalized Fuel. for worldng capital for the operation thereof, for the payment of expenses heretofore and hereafter incurred in the sequisition and constnenon thereof, including expenses !ncurred and to be incurred in connetton with the plan and system for the WPPSS No.1 Project speelded and adopted in biolation No. 606. and the repayment of the 1974 Notes, heretofore issued for the purpose of paying the cost of pre!!minary work and expenses in connetion with the WPPSS No.1 Project, is hereby dulated. as near as m..y be, to be the sum of One Billion T vo IInndred Sennry.Thru 111111on Dollars (41.273.000.000).

Stenow 3.5. Safeiency of ht enues. The gross rennnes and procuds to be derived by the System from the operation of the WPPSS No.1 Project at the rates and charges to be d.xed for the power and i

energy furnished thereby will be sudetent,in the judg=ent of the Board, l

s u.u..a u

i 23 to meet all e.tpenses of operation and mainter.ance of the WPPSS No.1 Project and u make a!! necessary repairs, replaevments and renewals thereof, to make the payments into the Hanford Project Revenue Fund required by the provisions t f Sntion 7.2 of this Rosolution and to permit the setting aside out of such groes revenues. In the special fund created pursuant to the provisions of Section 7.3 of tids bsolution, of such amounts as inny be required to pay the principal of and interest on the Bonds as the same becomo due and payable.

ARTICLE IV At.rucarzmox co Issnses or Boxes Stemox 4.1.

.luthori:ation of Bats. There is hereby erented and establishel an issue of Bonds of the System to be know as the "Wasidneton Public Power Supply System. Nuclear Project No.1 hvenue Bonds" (the Bonds").which Bonds may be issued pursuant a

to the terms, conditions and Ihnitations of this Lsolution in series, in such amounts and f rom time to tiruv. as inay be requird to pay the Cost of Construction, to establish reserves as herein provided and to retire the 1974 Notes.

Stenox 4.2..hthorisation of JorJ Bonds. There is hereby authorized to be issued a series of One Hundred Seventy.Five lulllon Dollars ($175.000'40) principal amount of Bonds. Series 1975 (the a19*5 Bonds"), which shall bear interest 4t the rates and shall mature on July lla each of the years and in the amounts as show.t belowt ta==

tain m h

Amewt

_ 34't _

.Xg3t.

Amt A

1991.... $ 1,000.000 5.73 %

1992.... $ 0.100,000 7.00 %

1992....

1,000.000 S.75 1993....

2.300,000 7.10 1993....

1.100,000 S.75 1994....

2.500.000 7.10 1964....

1,000,000 S.75 1993....

2.700.000 7.00 1993....

1.300,000 5.00 1996....

2.900,000 7.03 1996....

1.400,000 6.10 1997....

3.100,000 7.30 1997....

1.300.000 6.23 1996....

3.000.000 7.30 1966....

1.600.000 6.40 1999....

3.600.000 7.40 1999....

1,700,000 6.60 0000....

3.500.000 7.40 1990....

1,000,000 6.75 0010.... 39.000.000 7.70 1991....

2,000.000 6.90 2017...

74,700,000 7.75 l

Sew. 3.3. 4.1 sed 4.2 an.

.~

l 24 The 1975 Bonds maturing on July 1, 2010, shall be redeemed by sinking fund installments which shall be accumulated in the Bond Betirement lecount in the Bond Fund (hereinafter created and estab.

lished) in amounts sudicient to redeem on July 1 of each year the prin.

cipal amount of such 1975 Bonds specified for each of the years shown below.

Year Arnowie Year Amount 2001

$4.100,000 2006......... $5,9%.000 200*

4,400,000 2007..___....

6,400,000 2003....___..

4,500,000 2003........

6,S00,000 2004..._..___

5,100,000 2009.........

7,400,000 2005______.__

5,500,000 2010_____...

7,900,000 The 1975 Bonds maturing on July 1,2017, shall be redeemed by sinking fund installments which shall be accumulated in the Bond Re.

tirement Account in the Bond Fund in amounts surficient to redeeta on July 1 of each year the principal amount of such 1975 Bonds specia.ed for each of the years show below:

Year Amount Year Amount 2011....____

$ S.500,000 2015 ___..__. $11,400,'X0 2012.__...

9,100,000 0016.......

12.200,000 2013. _ __..

9,S00,000 2017____.__.

13,100,000 2014__ __

10,600,000 The 1975 Bonds shall be issued either in coupon form (hereinsiter in this Article called"1975 Coupon Bonds"), registrable as to principal only, or in the form of fully regir ered Bonds (hereinafter in nis Article enlled "1975 Begistered Bonds"), or a combination of both forms, and may contain such variations, amounts and insertions as are incidental to such diferences of numbering, denominations and forms, including variations in the provisions for the repstration and transfer of the 1975 Bends.1975 Coupon Bonds shall be issued in the denomination of $5,000. 1975 Registered Bonds may be issued in denominations of $5,000 and any multiples of $5.000.1975 Coupon Bonds and 1975 Begistered Bonds initisily issued shall be dated Sep.

tember 1, 1975. 1975 Registered Bonds issued upon exchanges and transfers of 1975 Registered Bonds and upon exchanges of 1975 Coupon Bonds for 1975 Begistered Bonds, as hereinafter provided, shall be

(

See. 4.2 l

l-

l l

=.

I 25 i

i dated so that no gain or loss of interest shall result from such exchange or transfer. Each 1975 Registered Bond shall bear interest from the date thereof.1975 Coupon Bonds shall be numbend from i upwards, and 1975 Registered Bonds shall be numbered from B.1 upwards.

Interest on the 1975 Bonds shall be payable semi. annually on Janu-ary 1 and July 1 of each year, beginning January 1.1976, but, except as to any 1975 Registered Bond, only upon presentation and surrender of the respective interest coupons attached as they severally become due. Each of such coupons shall be numbered in order of its respective maturity.1975 Coupon Bonds may be regStered as to principal only in accordance with the provisions of Section 5.3 of this Resolution.

Szenos 4.3. Redemption of 2rts Bonds. At the option of the System,the 1975 Bonds shall be subject to redemption prior to maturity on and after September 1,1985, as a whole at any time. or in part from time to time on any intenst pannent date and in inverse order of their maturities (and in the event that less than all of the 1975 Bonds of a maturity are called for redemption, the particular 1975 Bonds of such maturity to be redeemed shall be selected by lot), upon published notice as provided in Article VI of this Resolution, at the redemption prices with respect to each 1975 Bond expressed as a percentage of the principal amount of the 1975 Bonds to be redeemed, set forth below, together with the interest accrued thereon to the date fixed for ndemption:

Period Durine Whice Redeemed Redemption e Both Dates Inetusm)

P ees September 1,1985 to June 30,1990.............

103 "o July 1,1990 to Juna 30,1995

................ 102 July 1,1995 to June 30,2000...

......... 101 July 1,2000 and thereafter 100 provided, however, that the System further nserves the right to redeem, prior to the maturity thereof, upon published notice as pro-vided in Article VI of this Resolution, (a) the 1975 Bonds maturing on July 1,2010, and or July 1,5017, in part on any interest payment date on and after January 1,2001, and on and after January 1. 2011, respectively, upon payment of the principal amount thereof from the amounts credited to the Bond Retirement Account in the Bond Fund seas. 4.2 and 4.3 L

2G pursuant to paragraph C of Section 7.3 of this Resolution, and (h) the 1975 Donds niaturing on Jul> 1,0017, in part on any interest pay, ment date on and after January 1,1966, upon payment of one hun.

dred one per cent (1019) of the principal amount thereof from excess moneys available therefor in the Bond Retirement.iccount in the Bond Fund resulting from the payments therein pursuant to Section 7.14 of this Roolution, in each essa to:nther with the interest accrued to the date dred for redemption. The System further reserves the right to redeem all of the 1975 Bonds, at its option, as a whole at any time, or in part from time to time on any interest payment date in the inverse order of their maturities (and in the event that less than all of the 1975 Bonds of a maturity are called for redemption, the particular1975 Bonds of such maturity to be redeemed shall be selected by lot), upon published notice as provided in Article \\*I of this Re>olu.

tion, from moneys available therefor in the Bond Retirement Account in the Bond Fund resulting from the payments therein pursuant to Section 10.S of :his Resolution, or in the event the WPPM No.1 Profeet is terminated as provided in.-ub[>aragraph (a) of Section 15 of the WPPSS No.1 Project.igreemente at the principal amount of the Bond or Bonds to be redeemed, together with the interest acerned thereon to the date Exed for redemption.

Stenox 4.4.

.Luthan:ation of series of Bands Other Than im Bonds. Subsequent to the issuance of the 1975 Bonds. the System. for the purpose of paying the Cost of Construction and to establish re.

serves as herein provided. may issue hereunder at one time or from ti=e to time an additional Series or additional Series of Bonds by means of a Series Resolution or Resolutions. but only upon compliance with the following conditions; (1) There shall have been delivered to the S stem a certiSeate 3

of the Bond Fund Trustee that no default exists in the pay =ent of the principal of or interest and premium, if any, on any Bond and all mandatory sinking fund redemptions, if any, required to have been

=ade shall have been made: and (2) There shall have been delivered to the Bond Fund Trustee a certideate of the Secretary of the Board that ti) no default exists in the pannent of the principal of or interest on the 1963 Bonds: tii) there has been no amendment of, or modidestion to, the WPPSS No.1 Project Net Billing Agreements, the WPPSS No.1 Project Exchange Sean. 4.3 end 4.4

i I

l l

I 27 Agreements or the WPPSS No.1 Project Agreement which will re-duce the aggregate amount of the payments provided for therein or which will release any party thereto from its obligntions thereunder l

(except as permitted by the last paragraph of Section 10.1 hereof) or which will in any manner impair or adversely afect the rights of the System or of the holders from time to time of the bonds issued pursuant to this Resolution: and (iii) the WPPSS No.1 Project Net Billing Agreements. the WPPSS No.1 Projact Exchange Agreements and the WPPSS No.1 Project Agreement are in full force and efect.

(3) At the time of delivery of each Series of Bonds, other than the 1975 Bonds, to the initial purchasers thereof, there shall be Aled with the Construction Fund Trustec, the Bond Fund Trustee and the Sys-tem a certidente of the Construction Engineer setting forth (i) his then current estimate of the Cost of Construction, exclusive of pay-ments to the Beserve Account in the Bond Fund and the Beserve and Contingency Fund required by this Resolution, if any, capitalized in-terest. if any, on the Bonds and the expenses of issuing the Bonds: (ii) the amount which has theretofore been expended to pay the Cost of Con-struction: (iii) the amount of moneys available for the payment of the Cost of Construction (including any moneys then held in the Con-struction Fund available for such payment): (iv) if the Construction Engineer's estimate of the Cost of Construction set forth in his cer-tidente pursuant to clause (i) above is greater than such Cost esti-mated prior to the delivery of the most recent issue of Bonds to the initial purchasers thereof, a statement of the reasons for the increase in estimated Cost of Construction; and (v) an estimate of the amounts that will be needed from time to time to pay the Cost of Construe-tion and the estimated dates of such payments. In rendering his cer-tiscate the Construction Engineer may rely upon estimates by the Supply System of owner's cost, including the expenses of Capitalized Fuel.

Each Series of Bonds, other than the 1975 Bonds, shall be dated, numbered and bear interest at the rate or rates per annum and be payable, both as to principal and interest, at such time or times and place or places as shall be prescribed in the Series Resolution or Reso-lations providing for the issuance thereof: provided that the express maturity date or dates of such Bonds which are term Bonds shall be no later than July 1,0017. The Series Resolution authorizing the issuance i

5 e. 4.4,

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5 of each Series of Bonds may also provide that the Bonds of such Series shall be redeemable prior to their respective maturities at the optieg of the System.at such time or times and upon such terms and condi.

tions as the System may prescribe. I~nless or except as otherwise provided in the Series Besolution providing for the issuance thereof, the Bonds of each Series shall be issued either in coupon form ihereinafter, together with the 1975 Coupon Bonds, called Coupon Bonds") of the denomination of $5,000, ngistrable as to principal only, or in the form of fully registered bonds (hereinafter, together with the 1975 Reg.

istand Bonds, called " Registered Bonds") of denominations of $5,000 and any multiples of $5,000, or a combination of both forms.

The Series Resolution or Resolutions shall contain an appropriate series designation. shall specify the authorized principal amount of such Series of Bonds, shall provide that the interest on such Series of Bon'ds shall be payable on January 1 and July 1, and the principal parnents and sinking fund payments for the retirement of term Bonds in advance of maturity shall be payable on July 1, and shall specify such othar provisions as may be required to be set forth therein by other provisions of this Resolution, and not inconsistent or in condiet with the provi.

sions hereof, as =sy be deemed necessary or advisable by the System.

The System hereby covenants and agrees that it will take all lawful measures reqtired to issue and sell from time to time or at one tima additional Series of Bonds to the extent required to enable de System to pay the remamng balance of the Cost of Construction.

ARTICLE V GzszaAt. Trasts axo Paovtstoxs or Boxes Ste=or 5.1.

I:ecution and Payment of Bonds. The 1975 Bonds and, unless or except as otherwise provided in the Series Resolution providing for the issuance thereof, the Bonds of all other Series of Bonds shall be executed on behalf of the System with the facsimile signature of the President of the Board and attested with the manual signatun of the Seentary of the Board or Treasurer of de System.

and the facsimile seal of the System shall be imprinted on each of the Bonds, and the ecupons thereto attached, if any, shall be executed tvith the facsimile signatures of said President and Seentary. In case any of the oEcers who shall have signed, attested, authenticated. registered or sealed any of the Bonds or interest mupons shall cease to be such l

5.es. 4.4 and 3.1 l

. -.... - -,...... - ~,.. _..,.. _ _

.____,____-___,_-_,_n.aw,

l l

1

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i l

29 o5cers before the Bonds and interest coupons so signed, attested, authentiented. registered or sealed shall have been actually issued and delivered. such Bonds and interest coupons shall be valid nevertheless and may be issued by the System with the same effect as thoueh the persons who had signed. attested, authenticated, registered or sealeil such Bonds and interest coupons had not ceasel to be such otficers. All Bonds shall be payable as to interest, principal and premium, if any, in such coin or currency of the United States of America which at the time of payment is legal tender for public and private debts; and, except as otherwise provided in Section 5.7 hereof, with respect to the payment of interest on Registered Bonds, shall be payable at the principal o$ce of the paying agents of the System for such Series of Donds in the City of Seattle, Washington, or, at the option of the holder, at the principal oEce of either of the Paying Agents of the System in the City of Chicago, Blinois, or in the City of New York, New York, to be designated and appointed from time to time by resolu.

tion of the Board (hereinafter referred to collectively as the -Paying Agents").

Ste tos 5.2. Bonds are Negotiable Instruments. All of the Bonds and the interest coupons attached thereto shall be neeotiable instruments to the extent provided by Section M.24.120 of the Revised Code of Washington. Coupcn Bonds, except while registered as to principal otherwise than to bearer, shall pass by delivery. The regis-tration of any Coupon Bond as to principal only shall not afect the negotiability of the coupons thereto appertaining, which shall remain payable to bearer and pass by delivery, whethat or not the Bond to which any coupon appertains is registered. The System, the Bond Fund Trustee, the Paying Agents and any other person may treat the bearer (or if such Bond be registered, the registered owner) of any Coupon Bond, the registered ouer of any Registered Bond. the bearer of any Coupon Bond registered as payable to bearer and the b arer of any coupon whether or not the Bond to which said coupon appertains is registered as to principal, as the absolute ouer of such Bond or coupon, as the case may be, for the purpose of making payment thereof and for all other purposes and neither the System nor the Bond Fund Trustee nor the Paying Agents shan be bound by any notice or knowledge to the contrary, whether such Bond or coupon shall be over.

due or not. All payments of or on account of interest to any bearer of any coupon, or to any registered owner of any Begistered Bond (or to I

Sees. 3.1 nad 3.2 i

1 l

i

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l i

30 l

his assigns), and all payments of or on secount of princips! to any bearer of any Coupon Bond (or if such Bond be registered, to the reg.

istered owner, or to any bearer of such Bond registered to bearer), or to any registend owner of any Registered Bond (or to his sssiens) shall be valid and effectual and shall be a discharge of the System, the Bond Fund Trustee sad the Paying Agents,in respect of the liability t

upon the Bonds or coupons or claims for interest, as the esse may be, to the extent of the sum or sums paid.

Secrtos 5.3. Registration Books; Registration of Coupon Bondi as to Principal Only. The System will esuse to be kept at the principal ci!!ce of the Bond Fund Trustee, as Registrar, at all times while any at the Bonds shall be outstanding and unpaid, books for the registration and tr:utsfer of such Bonds. Upon presentation to the Registrar for l

such purposes by any bearer of any Coupon Bond, the System will.

l under such reasonable regulations as (with the approval of the Regis-trar) it =sy prescribe from time to time, cause the Registrar to reg.

l ister in such books, in the name of the bearer or his nominee the ownership, as to principal only, of any such presented Coupon Bond and such registration shall be noted on the Bond. After such registration l

and notation, no transfer of any such Coupon Bond registered other.

wise than as payable to bearer shall be valid unless evidenced by a written instrument of transfer. in form satistsetery to the Registrar, duly executed by the registered owner in person or by his duly author.

ized agent; but any such Coupon Bond so registered may be dischstged l

from registration, and transfersbility by delivery may be restored, by l

a like transfer to beant similarly registered and noted. and after such transfer to beant such Bond shall be a bearer Bond. Any such Coupon i

I Bond may again, from time to time, in like manner, be registered as to l

principal only or be transferred to bearer. A certideate evidencing each registration, transfer or discharge from registration made pursuant to this Section shall be transmitted by the Registrar to the System.

4 Szcrtos 5.4.

Transfer of Registered Bonds. Any Registered Bond may be transferred pursuant to its provisions at the principal offlee of the Registrar by sarrender of such Bond for cancellation, ac.

companied by a irritten instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner in person or by l

I his duly authorized agent, and thereupon the System will issue and s

s.2. s.3..d s.4

n i

deliver at the osee of the Registrar (or send by registered mail to the owner thereof at his expense), in the name of the transferee or transferees, a new Registered Bond of the same series, form, interest 3

rate, principal amount and maturity, dated so that there shall result no gain or loss of interest as a result of such transfer. Te the extent of denominations authorized in respect of any such Bond by the terms thereof, or by the terms of this Resolution or the Series Resolution providing for the issuance thereof, one such Registered Bond may be translerred for several sneh kgistered Bonds of the same series, form, interest rate and maturity, and for a like aggregate principal amount, and several such Registered Bonds of the same series may be transferred for one or severs! such Registered Bonds, respectively, of the same series, form, interest rate and maturity and for a like aggre-gate principal amount.

Sze=ox 5.5.

Exchange of Fonds. The bearer of any Coupon Bond which at the time is not registered, or is registered as payable to bearer, and the registered owner of any Registered Bond or any l

Coupon Bond registered as to principal otherwise than to bearer, unless and except as is otherwise provided in the Series Resolution providing l

for the issuance thereof, may, at any time, providing such Bond shall not have been called for redemption, surrender the same at the prin-cipal oEce of the Registrar. in the case of Coupon Bonds with all un-matured coupons attached, and in the case of Registered Bonds or Cou.

pon Bonds registered as to principal, with instruments of transfer satisfactory to the Registrar, and shall be entitled to receive in exchange therefor an equal aggregate principal amount of Bonds of the same series, interest rate and maturity, of any one or more of the for=s the issuance of which has been herein provided for; and the System willissue and deliver at the principal oEce of the Registrar (or send by registered mail to the owner thereof at his expense) the Bonds necessary to make such ad=n-e.

Whenever Registered Bonds with proper instruments of transfer shall be surrendered to the Registrar for exchange for Coupon Bonds l

of the same series, interest rate and matttrity, the System will issue and deliver at the principal osee of the Registrar (or send by regis-tered mail to the owner thereof at his expense) in exchange a like principal amount of Coupon Bonds of the same series, interest rate Sees. S.4 sad 5J

\\

s6

32 and maturity, in bearer form, and bearing coupons so that no gain or loss of interest shall result from such exchange. Nothing herein con, tained shall be deemed to anthorize the execution and delivery of Reg.

intered Bonds of a Series of Bonds except in denominations of $5,000 and any multiples of $5,000, except as otherwise provided with respae:

to any Series of Bonds in the Series Resolution authorizing the issuance thereof.

Sacrtos 5.6. Disposition of Bonds Surrendered in Exchange or Transfer: Charges for E: change and Transfer. En every case of an exchange of Bonds, and of a transfer of any Registered Bond. the sur.

rendered Bonus and coupons,if any, shall be held by the Registrar and a certideate evideneing such exchange or transfer shall be transmitted promptly to the System. All Registered Bonds surrendered for ex-change or transfer shall be cancelled. Unless or except as otherwise provided in the Series Resolution authorizing the issuance thereof, l

Coupon Bonds surrendered in exchange for Registered Bonds will l

be held by the Registrar, who shall make provision satisfactory to i

the Srstem for the safekeeping of such Coupon Bonds. As a condition of any such exchange or of any registration or transfer. the System at its option may reqture the payment of a sum sudicient to reimburse it for any stamp tax or other covernmental charge that may be im.

posed thereon. All Bonds executed and delivered in exchange for or upon transfer of Bonds so surrendered shall be valid obligations of the System evideneing the same debt as the Bonds surrendered. and shall be entitled to all the benefits and protection of this Resolution to the same extent as the Bonds in exchange for. or upon transfer of which, they were executed and delivered.

i l

Szc: tex 31. Payment of Bonds and Interest. The Bonds of eseh Series and coupons appertaining thereto may be presented for payment at the principal otlice of any of the Pas.ng Agents for such Series of Bonds. All Bonds and interest coupons upon the payment thereof shall be cancelled by the Paving Agants. A certiticate evidenetng such can.

cellation shall be transmitted to the Bond Fund Trustee monthly, and the Bond Fund Trustee shall, prior to the twentieth day of each =onth, furnish to the System copies of all certidentes evidencing cancellation of all Bonds and interest coupons in the preceding =or.th together with a statement as to the Bonds and interest coupons paid in said preceding month.

t Sees. 3.3. 3.6 and 3.x

N 33 The principal of and interest on all Coupon Bonds and the principal of all Registered Bonds of a Sedes of Bonds shall be payable at the principal office of any one of the Paying Agents for such Series of Bonds. Payments of the interest on the Coupon Bonds shall be made

-only upon presentation and surrender of the coupons, if any, repre-senting such interest as the same, respectively, become due and pay-able. Payment of the interest on each Registered Bond shall be made by the Bond Fund Trustee, on each interest pannent date to the person whose name appears on the registration books of the System as the registered owner thereof, by check or draft mailed to such registered owner at his address as it appears on such registration books.

Szci:os 5.L Lost, Destroyed or htilated Bonds. In case any Bond or any coupon thereto appertaining shall at any time become mutilated or be lost, stolen or destroyed, the System in the case of such mutilated Bond or coupon shall, and in the case of such a lost, stolen or destroyed Bond or coupon in its discretion may, execute and deliver a new Bond or coupon of the same series, interest rate and maturity and of like tenor and effect in exchange or substitution for and upon the surrender and enneellation of such mutilated Bond or coupons appertaining thereto, or in lieu of or in substitution for such destroyed, stolen or lost Bond or coupons, or if such stolen, destroyed or lost Bond or coupons shall have matured, instead of issuing a sub-stitute therefor, the System may at its option pay the same without the surrender thereof. Except in the case where a mutilated Bond or coupon is surrendered, the applicant for the issuance of a substitute Bond or coupons shall furnish to the System evidence satisfactory to it of the theft, destruction or loss of the original Bcud or coupons and of the ownership thereof, and also such security and inde=nity as

=ay be required by the System. and no such substitute Bond or coupons shall be issued unless the applicant for the issuance thereof shall reim.

barse the System for the expenses incurred by the System in connee-tion with the preparation, execution, issuance and delivery of the substitute Bond or coupons and any such substitute Bond or coupons shall be equally and proportionately entitled to the security of this Besolution with all other Bonds and coupons issued hereunder, whether or not the Bond or coupons alleged to have been lost, stolen, or de.

stroyed shall be fotu i at any time or enforceable by anyone. The Sees. 5.7 and 5.4 k

34 System shall advise the Bond Fund Trustee and the Psying Agents of the issuance of substitute Bonds or coupons. All Bonds and coupons so surrendered to the System shall be cancelled by it.

S zerto n 5.9. Limitation on Duty of System to Register, E: change or Transfer Bonds. The System shall not be required (a) to issue, transfer or exchange Begistered Bonds for a period of ten (10) days next preceding any interest payment date therefor, (b) to issue, reg.

ister, discharge from registration, transfer or exchange any Bonds for a period of ten (10) days next preceding any selection of Bonds to be redeemed thereafter or for a period of ten (10) days thereafter or (c) to register, discharge from registration, transfer er exchange any Bonds which have been designated for redemption within a period of sixty ',60) days next preceding the date dxed for redemption.

Szcuos 5.10. Destruction of Bonds on Payment, Ezekange or l

Transfer. All Coupon Bonds and interest coupons paid by any Paying Agent or the Bond Fund Trustee shall be cancelled and shall be cre.

mated or otherwise destroyed by such Paying Agent or Bond Fund i

Trustu, as the esse may be, pursuant to such regulations, consistent with the laws of the State of Washington, as the Bond Fund Tr:stee (with approval of the System) shall prescribe. All Registered Bonds cancelled on account of payment, transfer or exchange shall be delivered to the Bond Fund Trustee and shall be disposed of by the Bond Fund Trusta in accordance with the instructions of the System.

ARTICLE VI L

Broturnor or Borns Szcuor 6.L Time of Redemption. The Bonds which are subject to redemption prior to maturity shall be redeemed in accordance with the provisions of this Article. The 1975 Bonds shall be subject to redemption at the times, under the conditians and upon the payment of the redemption prices specided in Section 4.3 hereof, and the Bonds of ail other Series of Bonds shall be subject to redemption at the times, under the conditions and upon paymet of the redempti-- prices specided in the Series Besolution or E4 solutions authorizing m. issu.

anes of such Bonda.

Sean. 5.8. 5.9. 5.lo and 6.1

MEl 35 ts Secuos 6.2. Selection of Bonds for Bedemption. If less than all of the Bonds of a Series of Bonds are to be redeemed at any time, is they shall be redeemed in the inverse order of maturities, and if less than all of the Bonds of a maturity are to be redeemed, the Bond Fund Trustee shall determine by lot, in any manner deemed by it to be fair, a

the serial numbers of the particular Bonds of such mnturity so to be redeemed.

s 5

Sac =os 6.3. Notice of Rehption. Notice of any redemption

)

shall be given by the System, or by de Bond Fund Trustee in the name of the System, by publication of a notice, which notice shall specify the title, series, maturities, letters and numbers or other distinguishing marks of the Bonds to be redeemed, the redemption date and the place or places where the amount due upon such redemption will be payable i

and,in the case of Registered Bonds to be redeemed in part only, such notice shall also specify the respective portions of the principal amount l

thereof to be redeemed. Such notice shall further state that upon the date fixed for redemption Sere shall become due and payable upon each Bond to be redeemed the principal amount thereof plus the premiu:n, if any, due thereon upon the said redemption date, together with inter-est accrued to the redemption date, and that from and s,fter the redemp-tion date interest thereon or on the portion of any Registered Bond to be redeemed in part (unless the System shall default in the payment of the Bonds, or of the portion of any Registered Bond, so to be re-deemedin part) shall cease to acerne and become payable. Such notice shall be published at least once on any business day of the week in a I

daily 0.nr.ncial paper, or in a daily newspaper of general circulation l

printed in the English language, pubF.shed in each of the cities of Seattle, Washington, Chicago, Illinois, and New York New York, the l

date of publication to be not less than thirty (30) nor more than sixty l

(60) days prior to the date fixed for redemption. If, because of the l

temporary or permanent suspension of the publication or general cir-enlation of any financial paper or newspaper in any particular city, the Bond Fund Trustee deems it impossible to publish any such notice of redemption in such city in the manner herein provided, then there shall be made in lieu thereof such publication as shall be approved by the Bond Fund Trustee, and the same shall constitute a suficient publi-cation of such notice. The Bond Fund Trustee shall also mail a copy of such notice, postage prepaid, not less than twenty dre (25) days nor s

6.2 a s.:

\\

I l

i 36 l

more than sixty (60) days before the redemption date to the registered owners of Bonds which are to be redeemed in whole or in part at their last addresses.if any, appearing upon the registry books, but such mail, ing shall not be a condition precedent to such redemption, and failure to mail or to receive any such notice shall not atYeet the validity of the proceedings for the redemption of Bonds. The System shall give writ.

ten notice to the Bond Fund Trustee of its election to redeem Bonds at least forry.8ve (45) days prior to the redemption date or sceh shorter period as shall be acceptable to the Bond Fund Trustee, and if notice of redemption is to be published by the Bond Fund Trustee, such notice shall contain all the information necessary to enable the Bond Fund Trustee to publish the notice of redemption in the canner aforesaid. As to Bonds which are redeemable by the Bond Fund Trustee without action being taken by the System under the terms of this Resolution, the Bond Fund Trustee shall proceed to publish notice of redemption of such Bonds at the time specirled in this Resolution without further direction from the System. Whenever notice of redemp.

tion has been duly given as herein provided, the Bond Fund Trustee shall.on or before the date Axed for redemption in such notice, transfer to the Paying Agents for the Bonds so to be redeemed amounts in cash which in addition to other moneys,if any, held by such Paying Agents for such purpose, will be sudeient to redeem on the redemption date all the Bonds so to be redeemed.

S zcrto s 6.4.

Payment of Redeemed Bonds; When interest on Bonds Called for Redemption Ceases to.Lccrue. Notice having been given by publication in the manner provided in Section 6.3 hereof, the Bonds or portions thercef so called for redemption shall beco=e due and payable on the redemption date designated in said notice, and the Paying Agents shall make payment thereof upon presentation and surrender thereof at the oEces of the Paying Apats speci: led in such notice, together with, in the case of Bonds registered otherwise than to bearer and for which payment is requested by a person other than the registered ow-aer. a written instrument of transfer duly executed by the registered owner, or his duly authorized attorney, and, in the case of Coupon Bonds, with the pertinent coupons maturing su'osequent to the redemption date. In the event there shall be drawa for redemp.

tion less than all of the Bonds represented by a Registered Bond. the c

l Sees. 6.3 and 6 4

~---------y-

1 System shall execute and the Paying Agents shall deliver upon the surrender of such Bond without charge to the owner thereof, for the narede*med balance of the principal amount of the Bond so surren-Jered, either Coupon Bonds or a Registered Bond or Bonds of the same series. interest rate and maturity,in either the denomination of such unredeemed balance or in any of the authorized denominations as shall be requested by the registered owner of the Regi.tered Bond so surrenderedt provided, however, that the System may, by agree-ment with the holder of any Registered Bond, make payment of the.

redemption price of a portion of such Registered Bond directly to the registered owner thereof without presentation or surrender thereof upon such terms and conditions as the System may consent to in such agreement. The Bond Fund Trustee and each Paring Agent shall be advised by the System of each such agreement and shall be entitled to rely thereon, and to make pagtents in accordance therewith. until If notitled by the System of the termination of such agreement.

moneys for the redemption of all the Bonds, or portions thereof, to be redeemed on any redemption date, together with interest to the redemp-tion date. shall be held by the Paying Agents so as to be available there-for on the date dxed for the redemption thereof. and if notice of redemp-tion of said Bonds shall hava been publi.<hed as provided in this Article, then from and after the redemption date interest on the Bonds or por-tions thereof so called for redemption shall ecase to accrue and become

~

payable, and the coupons for interest pertaining thereto maturing sub-sequent to the redemption date shall be void and all Bonds or portions thereof so called for redemption shallbe payable solely from the moneys

.et aside for the payment thereof with the Paying Agents. and said Bonds or portions thereof shall no longer be secured by the !!vn on and pledge of the revenues of the WPPSS No.1 Project: provid d. however, that such lien and pledge shall continue in full force and e:Tect as to the portion of any Registered Bond not called for redemption. If moners shall not be available on the redemption date specided for the pannent of any Bonds, or portion of Registered Bonds, for the payment of such Bonds, or portions thereof, as shall have been called for redemption.

such Bonds, or portions thereof. shall continue to bear interest until paid at the rate they would have borne had they not been called for redemption and shall continue to be secured by the lien on and pledge of the revenues of the WPPSS No.1 Project herein created for the security and payment thereof.

s 6.4

f

\\

38 Szcnox 6.5.

Redeemed Bonds Not To Be Reissued. No Bond, or coupons shall be issued in lieu of Bonds or coupons paid ce sur.

rendered upon any exchange or transfer except as expressly provided by this Resolution.

ARTICLE VII Car.Anos or SrectAz. Ft xos.sso Accettx:s aan Pintrxis Tatsunox Stenox 7.1.

Revenue Fund. There is hereby created a special fund of the System to be known as the " Washington Public Power Sup.

ply System Nuclear Project No.1 Rewnue Fund' (hereinafter referred to as the " Revenue Fund"), the existence of which ahall be continued,

for so long as any bonds issued pittsuant to this Re olution are out.

standing and unpaid. System covenants and agrees that upon and after the issuance of any bonds issued pursuant to this Resolution it will pay into the Revenue Fund as promptly as practicable after receipt thereof allincome, revenues, receipts and prodts derived by the System through the ownership and operation by it of the WPPSS No.1 Prof.

eet and all other mone.rs required to be deposited in the Revenue Fund pursuant to this Resolution (other than amounts expressly required by this Resolution to be deposited in any other fund); and further core.

nants and agrees that all such income, revenues, receipts, prodes and other moneys shall be trust funds in the hands of the System and inall be used and applied as provided by this Resolution solely for the pur.

pose of =aking the payments required by Section 7.2 hereof, paying the principal of and premium,if any, and interest on the bonds issueo pursuant to this Resolution. of operating and maintaining the WPPSS No.1 Project, and of paying all costs, charges and expenses in connee.

tion therewith, and for the purpose of making repairs, renewals and' replacements to, and additions, better=ents and improvements to and extensions of the WPPSS No.1 Project, and for the purpose of pay.

ing all other charges or obligations against said revenues, income, receipts, prodts and other moneys of whatever natura now or here.

after imposed thereon by law or contract, to the payment of vhich for such purposes said revenues, income, receipts, prodts and ather moneys are hereby pledged.

The pledge of the income, revenues, receipts. prodts and other moneys hereby made by the System shall be valid and binding from the time of the adoption of this Resolution. The said income, revenues, Sess. 6,3 and 7.1

l I

l 39 receipts, pronts and other moneys so pledged and hereafter received by the System shall immediately be subject to the lien of such pledge without any physical delivery or further act, and the lien of the afore-said pledge shall be valid and binding as against any parties having claims of any kind in tort. contract or otherwise against the System irrespective of whether such parties have notice of the foregoing pledge.

Moneys in the Berenue Fund (except the Prepayment Account hereinafter created and established) not required for immediate dis-bursement for the purposes for which said Fund is created shall, to the fullest extent practicable and reasonable, be invested and reinvested by the System solely in, and obligations deposited in said Fund shall be, Investment Securities of the types described in clauses (1) through (4), inclusive, of paragraph (r) of Section 1.1 hereof maturing, or subject to redemption at the option of the holder thereof, at or prior to the estimated time for the disbursement of such moneys. All income resulting from the investment or reinvestment of the Bevenue Fund (except the Prepayment Account therein) shall, prior to September 1, 1980, or the Date of Commercial Operation, whichever is earlier, be paid over, at least semi annually, to the Construction Fund Trustee for deposit in the Construction Fund, and on and after September 1,1980, or the date of Commercial Operation, whichever is earlier, shall accrue to and be deposited in the Bevenne Fund.

There is hereby created and established an account in the Revenue Fund to be designated the " Prepayment Account". The System cove-nants and agrees that it will set aside and pay into said Account all payments made by the WPPSS No.1 Project Participants to the Sys.

tem pursuant to the provisions of the WPPSS No.1 Project Net Billing Agreements and the WPPSS No.1 Project Exchange Agree-ments prior to September 1,1950, or the Date of Commercial Opera.

tion, whichever is earlier. Such moneys may be applied prior to September 1,1990, or the Date of Commercial Operation, whichever is earlier, for the following purposes:

(a) to make the payments to the Hanford Project Revenue Fund required by Section 7.2 hereof; (b) to deposit in the Bond Fund hereinafter created and established for credit to the Reserve Account therein such amount as is required to establish and maintain the Reserve Aeecust in the amount reqmred by Section 7.3.D hereof; Sea.7.1

-.--.,y_,-

i

?

l 40 (c) to deposit in the Reserve and Contingancy Fund hereia, after ercated and established the sum of Three 3I1111on

($3,000,000);

(d) to deposit in the Revenue Fund such amount as the sy3 tem determines to be necessary for working espital:

(e) any other purpose for which moneys in the Revenue F :d may be expended.

3Ioneys in the Prepayment Account not required for immediate disbursement for the purposes for which said Account is created shall, to the fullest extent practicable and reasonable, be inve:ited and rein.

rested by the System solely in and obligations deposited in.said Account shall be. Investment Securities of the types described in clauses (1) through (4) inclusive, of paragraph (r) of Section 1.1 hereof I

maturing, or subject to redemption at the option of the holder thereof, at or prior to the estimated time for the disbursement of such moneys, or. in the case of moneys held in the Prepayment Account for the purpose of making deposits to the Reserve Account in the Bond Fund and the Reserve and Contingency Fund. within seven m years fro:n the date of such investment or reinvestment. All income resulting fn=

the investment or reinvestment of the Prepagen Account shall accrue to and be deposited in said Account.

Nothing contained in this Section 7.1 shall be construed to require the deposit into the Revenue Fund of any of the revenues. ine<>me, re.

ceipts. prodts or other moneys of the System derivcd by the System through the ownership or operation of any electric utility properties of the System heretofore or hereafter acquired or constructed as a sepa.

rate system and created or established from funds other than the pro.

eeeds of bonds issued pursuant to this Resolution.

Szcstos T.2. Payments to Revenue Fund Created Pursuant to Resolution No. ns. The special fund of the System know as the "Hanford Project Revenue Fund" created pur uant to Section d.1 of Resolution No.173 shall be continuel in existence for so !ong as any of the bonds issued pursuant to said Resolution No.173 are outstand.

ing and unpaid. The S.rstem covenants and arees that commenetnf on July 1,1980, and for so long as any bonds issued pursuant to Resolut:on No.178 are outstanding and unpaid,it m!! pay from the Revenue Fund Sees. 7.1 and r.2 f

P

,---w,

---,,,_,,,--w----

---,-.-..------m_____m___

w-

U into said Hanford Project Revenue Fud, from time to time, from the l

income. nvenues, netipts and profits derived by the System from the ownership and operation by it of the WPPSS No.1 Project, amounts sufficient to enable the System to pay from the Hanford Project Reve-nue Fund all the obligations of the System payable. from moneys on deposit in said Fund as the same become due and payable, to the extent such obligstions are not otherwise provided for. Without limit.

ing the generality of the foregoing, the System shall pay into the Han.

ford Project Revenue Fund amounts su5cient to enable the System (a) to make when due the payments from the Hanford Project Revenue Fund to the Hanford Project Revenue Bond Fund created pursuant to Section 6.2 of Resolution No.178, nquind by said section; (b) to make when due the payments from the Hanford Project Revenue Fund to the Hanford Project Reserve and Contineney Fund enated pursuant to Section 6.4 of Resolution No.178, nquind by said sectient (c) to maintain the working espital for the Hanford Project at an amont at least equal to $1,000,000; and (e) to pay all other Project Annual Costs (as deined in the Hanford Project Exchange Agnements), to the ez.

tent such obligations are not otherwise provided for.

So long as any bonds issued pursuant to Resolution No.173 remain ontstanding and unpaid, the payments required to be made pursuant to this Section shall constitute a prior and paramount charge and lien over all other eherges or claims whatsoever against the Revenue Fund and the revenues, income, receipts, prosts and other moneys pledged thereto.

Szenos 7.3. Bond Fund. Then is hereby enated a special fund of the System to be known as the " Washington Public Power Supply System Nuclear Project No.1 Bond Fund" (hereinafter referred to as the " Bond Fud"). The Bond Fund shall be held and ad:mnistered by the Bond Fund Trustee appointed as provided for in Section S.2 !~ eof, and shall to the extent not otherwise provided in Section 7.3.D, be used solely for the purpose of paying the principal of and premium, if any, and intenst on the Bonds, and of ntiring the Bonds prior to maturity, in the manner herein provided. The System hereby obligstes and binds itself irrevocably to set aside and to pay (to the entent not otherwise provided) out of the revenues, income, receipts, prosts and other moneys of the WPPSS No.1 Project theretofon paid into the Revenue Fud to the Bond Fud Trustee,in trust for the account of the Bond Sees. 7.2 and 7.s

1 m

+

u-j 1

4

{

(

42 Fund. after first making the payments required by Section 7.2 of this Resolutio.1, certain fixed amounts, without regard to any fixed proper.

tion of said revenues, income, receipts, profits and other moneys, sum, cient to pay the principal of and premium, if any, and interest on att the Bonds frota time to time outstanding as the same respectirete become due and payable. Such fixed amounts to be paid to the Boni b

Fund Trustee and into the Bond Fund shall be as follows and following order of priority, to wit:

=

J

'l There is hereby created for the purpose of paying the interest A.

on outstanding Bonds as the same becomes due and payable an Interest t

Account in the Bond Fund (hereinafter referred to as the " Interest

[

1 l

Account"), ud not later than the 25th day of September,1950, and es or before the 25th day of each es!endar month theresiter the Syste:

2 f

shall pay or enuse to be paid into the Bond Fund to the credit of the Interest Account an amount such that,if the same amount were so paid 3

and eredited to the Interest Account on the 25th day of each succeeding eslendar month thereafter and prior to the next date upon which an

[

installment of interest falls due on the Bonds, the aggregate of the M

amounts so paid and credited to the Interest Account would on such date be equal to 'the installment of interest then falling due on all Bonds then outstanding. In making the er1dit to the Interest account required by this paragraph. any amounts paid or to be paid into the Bond Fund and credited to the Interest Account representing accrued interest received on the sale of Bonds, interest capitalized from the proceeds of Bonds and transfers from the Construction Interest lecount shall be taken into consideration and allowed for.

i B. There is also hereby created for the purpose of paving out.

standing serial Bonds as they mature a Principal Account in the Bond l

Fund (hereinafter referred to as the " Principal Account"), and not later than the 25th day of September,1950, and on or before the 25th day of each succeeding calendar month thereafter, the System shall pay, or cause to be paid. into the Bond Fund to the credit of the Prin.

eipal Account an amount such that, if the same amount were so paid and eredited to the Principal Account on the 25th day of each succeeding calendar month thereafter and prior to the next date upon which an installment of principal falls due on the serial Bonds. the aggregate of the amounts so paid and eradited to the Principal Account would on such date be equal to the installment of principal then falling due.

k i

See. r.3 a-,

a_,-,.,_--_-~w,-

,,,w-_,.e.,.,,,-

,c,_ -

-_-a,n,--

---w

_. y

,n-w,,n,

-_.--w-.,,

43 C. There is also hereby created for the purpose of meeting the specified sinking fund installment requirements of any outstanding 4

term Bonds a Bond Retirement Account in the Bond Fund (herein-after referred to u the " Bond Betirement Account"), and on or before 1

the 25th day of the twelfth month prior to the date upon which the

$rst sinking fund installment is payabh. with respect to the term Bonds of each Series of Bonds, including the 1975 Bonds, and on or before the 25th day of each succeedmg calendar month thereafter, the System shall pay, or causs to be paid, into the Bond Fund to the credit of the Bond Betifement Account for the purpose of retiring the term Bonds of such Series, an amount such that, if the same amount were so set aside and credited to the Bond Betirement Accout for such j

purpose on the 25th day of each calendar month thereafter and prior i

to the next date upon which a sinking fund installment falls due, the aggregate of the amounts so p6id and credited to the Bond Betirement Accout for the purpose of retiring the term Bonds of such Series would be suscient to redeem the 1975 Bonds due July 1,2010, and July 1, 2017, in the principal amounts and at the times specided in Section 4.2 of this Besolution and to redeem term Bonds of other Series of Bonds in the principal amonts and at the times specified in the Series Besolution or Besolutions authorizing the issuance of such Series of Bonds.

The Bond Fund Trustee shall apply all or substantially all moneys credited to the Bond Retirement Account for the retirement of the term Bonds of each Series of Bonds to the retirement of such Bonds by purchase at prices not exceeding the then applicable redemp-tion price (in which event the principal amount of such Bonds required to be redeemed on the next sinking fund installment date shall be re.

duced by the principal amont of such Bonds so purchased), or if un-able to purchase such Bonds at such prices, the Bond Fund Trustee shall on any interest payment date apply said moneys to the retire-ment of such term Bonds by redemption in accordance with the pro-visions of this Besolution and the Series Besolution or Besolutions authorizing such Bonds, or by a combination of purchase and redemp-tion; provided, however, that unless otherwise directed by the System not less than $100,000 aggregate principal amount of Bonds shall be called for redemption at any one time. Any such purchase of Bonds by the Bond Fund Trustee may be made with or without tendeis of l

U

1 l

l

\\

I i

44 Bonds pursuant to published notice, in such manner as the Bond Fw l

Trustee shall in its discretion deem to be in the best interests of t3, System, provided that the System may direct the Bond Fund Truste, in any method to be followed in purchasing Bonds..ul expenses in connection with the purchase or redemptian of Bonds shall be paid i

by the System from the Revenue Fund, or if no funds are availait.

J therein, from the hserve and Contingency Fund.

l In the event that moneys in the Bond Ltirement Accout, other than moneys credited thereto as sinking fund installments pursuant to this Lsolution or any resolution supplemental hereto, are to be a; plied to the ntirement of Bonds, the System may apply such moneys to the purchase of Bonds and may determine from which Series such pur.

j chases shall be made ar i may elect that all such purchases shall be made from only one Series or from more than one Series. Any such moneys not applied to the purchase of Bonds shall be applied to the redemption of Bonds of each Series in the proportion which the principal amount of l

Bonds of such Series then outstanding bears to the total principal amount of Bonds then outstanding.

Tha acerned interest payable on any Bonds purchased or re.

deemed with moneys endited to the Bond Retirement Account in the Bond Fund for the purpose of meeting the specined sinking f=d in.

stallment requirements of any term Bonds shall be paid from =oneys credited to the Interest Account therein.

D. There is also hereby created a bserve Account in de Bond l

Fud (hereinafter refernd to as the "& serve Accout"). Prior to September 1,1990, or de Date of Com=ercial Operation, whichever is earlier, there shall be deposited in the Bond Fund for endit to de Beserve Account, from moneys endited to the Pnpayment Account, or, to the extent such moneys are not available, from Bond proceeds, in.

clading moneys then on deposit in the Construction Fud, an amont with nepect to each Series of Bonds equal to the largest amont of intenst nquired to be paid on the Bonds of such Series during any d

six. month period from the date of such Bonds to de anal =aturi:7 ate dereof.

l If any Bonds are issued after September 1,1950, or the Date of Commercial Operation. whichever is earlier, on or before de date such Bonds an issued and delivered to the initial purchasers thereof, there i

l

[

5ea. TJ

I 45 shall be deposited in the Bond Fund for credit to the Reserve Account, from the proceeds of such Bonds, or revenues of the WPPSS.

1 Project, an amount unual to the largest amount of interest required to be paid on such Bonds during any six month period from the date of such Bonds to the dnal maturity date thereof.

Subject to the foregoing, there shall at all times be maintained in i

the Reserve Account an amount with respect to each Series of Bonds then outstanding equal to the largest amount of interest reguired to be paid on such Bonds during any six. month period from the date of such Bonds to the Snal maturit> date thereof by additional pannents from the Revenue Fund as may from time to time become necessary.

Prior to September 1.19S0, or the Date of Commercial Operation, whichever is earlier, any moneys and value of Investment Securities in the Bond Fund to the credit of the Reserve Account therein received by reason of investment or reinvestment of moneys in said Reserve Account in excess of the minimum amount of moneys and value of Investment Securities requirrd to be maintained therein shall be trans.

ferred at least semi annually by the Bond Fund Trustee to the Con-struction Fund Trustee and deposited to the credit of the Construe-tion Fund.

If, on any June 30 follosving September 1.19S0. or the Date of Commercial Operation, whichever is earlier, the moneys and value of Investment Securities in the Reserve Account or the reserve account for any series of additional bonds issued pursuant to this Resolution shall exceed the amount of moneys and value of Investment Securities then required to be maintained therein. the amount of such excess shall be applied to satisfy any denciency in the Reserve Account or in any of the other such reserve accounts (pro rata in proportion to the re-spective deEciencies if such excess is insudicient to satisfy all such de6ciencies) and the balance,if any of such excess shall be transferred to the Revenue Fund as of such June 30.

The term "value of Investment Securities" and words of like import as used herein shall be determined as of June 30 in each year and shall constitute the lesser of (i) the amortized cost of such obliga-tions, or (ii) the bid quotation price thereof as reported in The Wall Street Journal as of said date, or in the event such newspaper is not published or such price is not reported in said newspaper, in a news-s 7.3 l

l I

I i

F" 46 paper of general circulation or a financial journal published in.3, Borough of 31anhattan, City and State of S'ew York, selected by tt, Bond Fund Trustee, or lili) the priev at which such obligations ere then redeemable, by the holder at his option. The computation made und,

this paragraph shall include accrued interest.

E. 3foners in the Bond Fund shall be transmitted by the Bond Fund Trustee to the Paytng Apnts on or ber; ore the date upon which any interest or principal is due on Bonds. either at the maturity-date thereof or redemption < late prior to maturity, in amounts sudeiest to meet such maturiu:r installments of principal. interest and redemp.

tion premium, if any, when due. In the event that there shall be a deficiency in the Interest Account. the Principal Account or the Boc(

Betirement Account in the Bond Fu::d, the Bond Fund Trustee shall promptly make up such.ledeiency from the Reserve Account by the withdrawal of cash therefrom for that purpose and by the sale or redetuption of Investment Securities held in the Reserve Account, if necessary,in such amounts as will provide cash in the Reserve Account sumeient to make up any such deficiency. The System covenants and agrees that any dedeiency created in the Reserve Account or the reserve account for any series of additional bonds issued pursuant to this Resolution. by reason of any such withdrawal for payment into Ae Interest. Principal or Bond Retirement Accounts, or the interest, prin.

cipal or bond retirement accounts for such additional bonds, shall be made up from moneys in the Revenue Fund nrst available after maing provision for the payments into such Interest. Principal and Bond Betirement Accounts, or such interest, principal or bond retirement accounts for such additional bonds.

Whenever the assets of the Bond Fund shall be su5cient to pro.

vide moneys to retire all Bonds then outstanding, including such inter.

est thereon as thereafter may become due and payable and any pre.

t miums upon redemption thereof, no further payments need be made into the Bond Fund.

The Bond Fund shall be drawn upon for the purpose of paying the principal of and interest, and redemption premium. if any, on the Bonds. Stoneys set aside from time to time with the Paying Agents for the payment of such principal. interest and redemption premium shall i

S ?J l

1 47 f

be held in trust for the holders of the Bonds and appartenant coupons in re:yect of which the same shall have been so set aside. Until so set aside, all moneys in the Bond Fund shall be held in trust for the benedt of the holders of all Bonds at the time outstanding, equally and ratably.

Sacuos 7.4.

Bonds Charge Only Against Bond Fund and 3foneys Pledged Thereto: Bouds Prior Charge Over Other Charges and Claims

.fgainst Bond Fund. The Bonds and the interest thereon shall be a valid claim of the holder thereof only against the Bond Fund and the amount of the revenues. income. receipts, pronts and other moneys of the WPPSS No.1 Project pledged to the Bond Fund. and shall con-stitute a prior chargo over all other charges or claims whntsoever against the Bond Fund and such revenues. income receipts, predts and ether moneys pledged thereto nubject only to the prior charge on said revenues, income, receipts and proats for the payment of the amounts specided in Section 7.:1 hereof. and the Board hereby nnds and deternzines that in ervating the Bond Fund due regard has been given to the cost of the operacion and maintenance of the WPPSS No.1 Project and amounts required for the payment of taxes, assessments, or other governmental charges, lawfully imposed against the properties or revenues of the WPPSS No.1 Project, or payments in lieu thereof, and that it has not obligated the System to set aside into the Bond Fund a greater amount of the revenues and proceeds of the WPPSS No.1 Project than in its judgment will be available over and above such cost of maintenance, operation and taxes, assessments, or other govern-mental charges or payments in lieu thereof.

Sacnex 7.5. Fuel Fund. There is hereby created a special fund of the System to be known as the ~ Washington Public Power Supply System Nuclear Project No.1 Fuel Fund" thereinafter referred to as the ** Fuel Fund") and said Fund shall be held in trust by the Systen.

Beginmng on the Date of Commercial Operation all payments for Fuel shallbe made from the Fuel Fund. After making the payments herein-above provided for into the Hanford Project Revenue Fund and the Bo2d Fund, and paying or mahng proeision for the payment of the reasonable and necessary costs of operating and maintaining the WPPSS No.1 Project. including taxes or assessments lawfully imposed agamst the same, or payments in lieu thereof, the System shall transfer Sess. 7J. 7.4 and TJ

moneys from the Revenue Fund to the Fue' " tad for the purpes, y paying the costs and expenses of at.,

easing Fuel toe tg' WPPSS No.1 Project in the amounts.

u:

(1) The amount included in the annualbudget for Fuel adopeg pursuant to the Project Agreement.

(2) All amounts received by the System from Fuel erdits including the proceeds of Sale of Fuel creditable to operations.

(3) Additional amounts as may be necessary to avoid a dd.

ciency in the Fuel Fund.

If the WPPSS No.1 Projaet is terminated in accordance with Section 15 of the WPPSS No.1 Project Agreement, the unobli;ste balance in the Fuel Fund shall be transferred into the Revenue Fund as of the date of termination.

Sze:tos T.6.

Reserve and Contingency Fund. There is hereby created a special fund of the Sy. tem to be known as the -Washin ton Public Power Supply Sy= tent Nuclear Project No.1 Reserve and Con.

tingency Fund" (hereinafter referred to as the -Reserve and Contis.

gency Fund") and said Fund >inalt be held in trust by the Syste:::.

After making the payments hereinabove provided for into the Hanford Project Revenne Fund and the Bond Fund and into any sep.

arate bond fund estab'ished for additional bonds issued pursuant to this Resolution, and paying or making provisions for the pannent of the reasonable and necessary cost of operating and maintaining the l

j WPPSS No.1 Project. includin: taxes or assessments lawfuity u= posed against the same, or payments in lieu thereof, anel after making the i

payments hereinabove provided for into the Fuel Fund. the System I

shall, on or before September 25.1950 and on or before the 25th day of each month thereafter, pay out of the Revenue Fundinto the Reserve and Contin:ency Fund an amount.<tual to ten per cent (10"< > of the aegregnte of fi) the aniounts required to be paid not later than the 25th day of such month into the Interest Account. the Principal Account and the Bond Retirement Account in the Bond Fund. plus sii) the amounts required to be paid in such month into the interest accounts.

the principal aceoants and the bond retirement accounts in the bond funds established for additional bonds issued pursuant to this Resota.

Sm. *.3 and 7.6 a

.e 7

49 tion. without regard in each esse to any amounts which may be in the Bond Fund or the bond funds established for such additional bonds resulting from the investment or reinvestment of the Bond Fund or bond funds established for such additional bonds.

In any event, by the Date of Commercial Operation, the System shall deposit in the Reserve and Contingency Fund the sum of Three Million Dollars ($3,000,000) either through the deposits made pursuant to the next preceding paragraph or from moneys credited to the Pre.

payment Account or otherwise available therefor in the Revenue Fund or, to the extent such moneys are not available, from Bond proceeds, including moneys then on deposit in the Construction Fund.

Moneys in the Beurve and Contingency Fund shall be used from time to time to make up any deficiencies in the Interest Account. Prin.

cipallecount or Bond Retirement Acccunt in the Bond Fund for which funds are not available in the Construction Fund or the Reserve Account. or to make up anv dencieheies in the interest account. principal account. or bond retirement account in any bond fund established for additional bonds issued pursuaat to this R= solution for which funds are not available in any construction fund or reserve account for such additional bonds, and such moneys in the Reserve and Contingency Fund are hereby piedred as additional payments into the Bond Fund or any such bond fund to the extent required to make up any such de6ciencies. To the extent not required for any such denciency :: oneys in the Beserve and Contingency Fund may be applied on and after the Date of Commercia10peration to any one or more of the following:

(1) to pay the cost of renewals and replacements to the WPPSS No.1 Project; (2) to pay the cost of normal additions to and extensions of the WPPSS No.1 Project:and (3) to pay extraordinary operation and maintenance costs, including extraordinary costs of Fuel and the cost of preventing or correcting any unusualloss or damage (including major repairs) to the WPPSS No.1 Project.

If, as of June 30 in any year, moneys and value of Investment Securities in tho Reserv. cond Contingency Fund shau exceed the amount of the then commitments or obligations incurred by or the then require.

l s :.a l

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50 ments of the System for any of the foregoing purposes, plus Thm Million Dollars ($3,000,000), the amount of such excess shall be pig into the bserve Account and the reserve account for any series of additional bonds issued pursuant to this Lsolution to the extent of any de6ciency therein (pro rats in proportion to the respective det.

eiencies if such excess is insufficient to satisfy all such dedeiencies) and the balance,if any, of such excess shall be paid as of Jue 30 into :3, brenne Fund.

Ster:ox 7.7. Surplus Roneys. If on any June 30 following sep, i

tomber 1.1950, or the Date of Commercial Operation, whichever is earlier. there shall exist in the brenue Fund. atter giving efect to any transfers pursuant to Sections 7.3, 7.3. 7.5 and 7.6 hereof, an amocat -

l which shall exceed the System's required amount of worhng capital, i

the amount of such excess shall be applied to reduce annual power l

costs to the WPPSS No.1 Project Participants under th WPPSS No.

I 1 Project Net Billing Agreements; provided that upon agreement of the parties to the WPPSS No.1 Project Agreement all or sny par. of such excess may be applied to paying the cost of making repairs.

renewsis and replacements, additions, betterments and i=provements to and extensions of the WPPSS No.1 Project, the purchase of bonds issued pursuant to this & solution the redemption of bonds issued pursuant to this Resolution or for other purposes in connection with the WPPSS No.1 Project. For the purpose of this Section 7.7, the System's " required amount of working capital" shall be 53,000.000 or i

such greater amount as may be decided upon by the System and the AWstrator with the approval of the C)nsulting Engineer.

The amont which exists in the Revenue Fud as of any Jue 30 shall be deemed to be the amount of the then excess of the current assets in the L-enne Fud over the current liabilities thereof determined in accordance with the Uniform Srstem of Accounts prescribed by the Federal Power Commission for Publie Crilities and Licensees in edeet l

on January 1,1970: provided that such current liabilities as of my Jue 30 shall not inelnde the payments required to be made for the next following twelve month period into the Bond Fund or say bond fad established for additional bonds issued pursuant to this Lsolution.

Ster:or 7.S. latiestment of Funds. Moners held for the credit of the Interest Account, Principal Accout and Bond Retirement Ae.

Soun. ?.6. 7.? and ?J

51 count in the Bond Fund shall, to the fullest extent practicable and reasonable, be invested by the Bond Fud Trustee in Investment Secu.

rities of the types described in clauses (1) through (4), inclusive, of paragraph (r) of Section 1.1 henof which shall matun or be subject to ndemption at the option of the holder thereof on or befon the re.

spective dates when the moneys held for the credit of such.Lecouts will be aquind for the purposes intended.

Moneys in the harve Account in the Bond Fund not required for immediate disbursement for the purposes for which said Accout is enated shall, to the fullest extent practicable and reasonable, be invested and reinvested by the Bond Fand Trustee at the dinction of the System solely in and obligations deposited in said & serve Accout shall be, Investment Securities of the types described in clauses (1) through (4) inclusive, of parngraph (r) of Section 1.1 hereof maturing, or subject to redemption at the option of the holder thenof, within seven (7) years from the date of such investment (but maturing priot to the dnal maturity date of the Bonds). The Bond Fud Trustee shall not be liable for any depreciation in value of any such investments.

Moneys in the Fuel Fund and Reserve and Contingney Fud not requind for immediate disbursement for the purposes for which said Fuds are ensted shall, to the fullest extent practiesble and reasonable, be invested and ninvested by the System solely in, and obligations deposited in said funds shall be, Investment Securities. maturing, or subject to redemption at the option of the holder thereof, within seven (7) years from the date of such investment (but maturing prior to the anal maturity date of the Bonds).

Allincome nsulting from the investment or reinvestment of the Interest Accout, Principal Accout and Bond Ltinment Accout in the Bond Fund shall accrue to and be deposited in the Bevenue Fund.

Allincome nsulting from the investment or reinvestment of the Re.

serve Accout in the Bond Fud. the Fuel Fund and the Lserve and Contingency Fund shall prior to September 1,1950, or the Date of Commercial Operation, whichever is earlier, accrue to and be deposited in the Construction Fud; after September 1,1950, or the Date of Commercial Operation, whichever is earlier, such income shall necrue to and be deposited in the hvenue Fund.

S 7J

52 A11 moneys held or set aside by the System in the Revenue Fund, Fuel Fund or Reserve and Contingency Fund shall, until otherwise invested or applied as provided in this Resolution, he deposited by the System in its name, for the secount of the Revenue Fund. the Fuel Fund or the Reserve and Contingency Fund, as the case may be,in sneh depositary or depositaries as the System shall at any time or from time to time appoint for tiie purpose. Any depositary so appointed shall be a state bank or trust company or national banking association author-ized to do business in the State of Washington and qualided under the r

laws of said State to receive deposits of public moneys, having a espital stock, surplus and undivided pro 6ts aggregating in excess of Ten Million Dollars ($10,000,000), and all moneys so deposited shall be secured to the extent and in the manner permitted by applicable state' or federalinws for :he securing of deposits of public moneys.

Sscrtos 7.9. Construction Fund;.Lpplication of Proceeds of ^

Sale of Bonds. There is hereby erected a special fund of the System to be known as the " Washington Public Power Supply System Nuclear Project No.1 Construction Fund" (hereinafter referred to as the " Con.

struction Fund") which shall be held in trust by the Construction Fund Trustee for the beneSt of the System and the holders of the Bonds, as their interests may appear. There is also hereby created in the Con-struction Fund special accounts to be known as the " Construction In-terest Account" and the " Fuel Account".

1.

Immediately upon the issuance and delivery of any Series of Bonds, there shall be paid into the Construction Fund such amount of the proceeds derived from the sale of such Series of Bonds as is to be applied to the payment of the Cost of Construction. The amount of said proceeds to be applied to the payment of interest on the Bonds shall be credited to the Construction Interest Account. and the amount of said proceeds. to be applied to the payment of the cost of Capitali:ed Fuel shall be credited to the Fuel Account.

B. From the proceeds derived from the 1975 Bonds there shall be deposited:

1.

With the Construction Fund Trustee for credit to the Construction Interest Account an amount equal to the accrued interest on said Bonds paid as a part of the purchase price thereof; Sea. TJ ed 7.9 I

--m m

e-yw

,y%,-

_e,-

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54 4.

With the Construction Fund Trustee for credit to the Construction Fund the balance of such Bond proceeds, which shall be applied to the Cost of Construction.

In any event, if moneys credited to the Prepannent Account or otherwise available will not be su:licient to make, by September 1. I!MO, or the Date of Commercial Operation, whichever is earlier, or in the case of the issuance of any Bonds issued after the earlier of such dates by the date of delivery to the. initial purchasers of such Bonds, the deposits to the Reserve Account required by Section 7.3.D hereof, and by the Date of Commercial Operation, the deposits to the Reserve and Contingency Fund required by Section 7.6 hereof, and to deposit in' the Revenue Fund, by September 1,1950, or the Date of Commercial Operation, whichever is earlier, the " required amount of working capital", as defined in Section 7.7 hereof, such deposits shall be =ade from Bond proceeds, either from amounts then on deposit in the Con-struction Fund or the proceeds of Bonds issued to obtain moneys to make such deposits.

D. Moneys in the Construction Interest Accout shall be used for the purpose of paying interest on the Bonds. On or before the maturity of an installment of interest on the Bonds, the Construction Fund Trustu shall transfer from the Construction Interest Accout to the Bond Fund Trustee for deposit in the Interest Accout in the Bond Fud an amount which, together with any moneys theretofore received or held by the Bond Fud Trustee for that purpose, shall be sui!!cient to pay such installment of interest on said Bonds. If at any time moneys in the Construction Interest Account and other available moneys are inadequate for such purpose, the Construction Fund Trus-tee shall transfer from the Construction Fund to the Construction Interest Accout such amont of moneys as is required to per=it such transfer to the Bond Fund Trustu.

E. Except as provided in paragraph F of this See: ion 7.9. all moneys received by the Srstem by reason of the breach or default of contractors in connection with the construction of the WPPSS No.1 Project and the proceeds of salvage sales. shall be paid to the Con-struction Fud Trustee for deposit in the Construction Fund.

See. 7.9 l

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56 Truste, shall not be liable for any depreciation in the value of any of such investments or deposits made at the direction of the System.

Szenos 7.11. Cost of Construction. Pancent of the Cost of Construction shall be made from the moneys in the Construction Fund.

For the purpose of this Resolution, the Cent of Construction shall include all costs of constructing, acquiring and installing the WPPSS No.1 Project as generally described in Section 3.2 hereof, and shall incigde, but not be limited to, the following:

A.

Paying or reimbursing the cost of preliminary surveys, investigations, engineering and other expenses and fees properly incurred for the WPPSS No.1 Project, including expenses in-l curred in connection with the plan and system for the WPPSS No.

1 Project specided and adopted in Rosolution No. 606, and de pay.

ment of the principal of the 1974 Notes.

B. The cost of obtaining any and all permits and licenses required by any governmental agency or authority having juris-diction and any other licenses, permits, approvals or legal rights of any kind required for, or used or useini in the acquisition and construction of the WPPSS No.1 Project and de placing of de same in operation.

C. Obligations inentred for labor and materials and to con-tractors, builders and to material suppliers in connection with the acquisition and construction of de WPPSS No.1 Project, for machinery and equipment for the restoration or relocation of prop-erty necessary in connection with such construction. for de removal or relocation of stmetures and for the clearing of lands, and for the cost of Capitali:ed Fuel D. The cost of acquiring by purchase,if such purchase shall be deemed expedient. and the amount of any leposit in court or award or final judgment in or any settlement or compromise of any I

proceeding to acquire by condemnation or by de exercise of de power of eminent domain such lands, property. rights of way, franchises, eszements or other interests in land sa may be deemed by the System to be used or useful for the acquisition. construction, maintenance and operation of the WPPSS No.1 Project, optices Sess. 7.10 and 7.11

1

)

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58 anee and all other items of expense not specided elsewhere in this section which are inciilent and properly allocable to the acquisition and construction of the WPPSS No.1 Project and placing the same in operation (including the premiums on any insurance and Adelity bonds required or obtained during construction), including miscellaneous fees and costs in connection with the acquisition of lands, rights of way, property rights, franchises, easements, cost of abstracts of title, title insurance, cost of surveys and appraisals.

Notwithstanding any other provision ~of this Resolution (a) prior to the Date of Commereis! Operation. the cost of all repairs. renewals and replacements to the WPPSS No.1 Project shall constitute a Cost of Construction; (b) premiums paid for insurance maintained by the System pursuant to the requirements of this Resolution and the WPPSS No.1 Project Agreement for the period ending with the Date of Commercial Operation shall constitute mms chargeable to Cost of Construction. and for subsequent periods shall constitute expenses of operation; and (c) from and after the Date of Commereisi Operation the costs and expenses, including taxes, and payments in lieu dereof of the System in connection with the operation and maintenance of the WPPSS No.1 Project shall not be included in Cost of Construction.

In any event. amounts in the Construction Fund shall be applied to the payment when due of principal of and interest on the Bonds to the extent that other moneys are not available derefor and such amounts are hereby pledged as additional pannents to the Bond Fund to the extent required for any anch desciency.

I Sr.er:or 7.12. JIanner of Paying Cost of Construction. Ezeept for payments from the Construction Fund otherwise in paragraph D of Section 7.9 and in Section 7.13 specideally provided, and for payments or reimbursements specined in paragraph A of Section 7.11. transfers or payments from the Construction Fund shall be made in accordance with the provisions of this Section 7.12. Upon preparation of vouchers approved by the Auditor, the Board shall approve and direct the pay.

ment of all amounts due and owing on account of the Cost of Construe.

tion, and, by written order signed by the President or Vice President and Secretary or Assistant Secretary of the System, direct the Con.

Sean. 7.11 and 7.12

.. -.. -. - - -... ~ - -

l V.,

60 Upon receipt of any such order and secompanpng certiacate, if required. the Construction Fund Trustee shall pay such obligation from the Construction Fund. If for any reason the System should desire, prior to pannent of any item in an order, not to pay such item, the System shall give notice of such decision to the Construction Fund Trustee. The Construction Fund Trustee, in making any disbursement, shall pay each such obligation or deliver to the Board a check or draft for the payment thereof payable to the order of the payee to whom pannent is due, as set forth in the order of the Svstem directing such disbursement.

The proper otYicers of the System are hereby authorized and directed to execute and deliver in the name of the System any and all documents, papers, receipts orders and releases that are reqaired or convenient to enable the System to etYect acquisition and construction of the WPPSS No.1 Project, and to pay from Bond proceeds any and all amounts of moneys required to perform fully the obligations of the System with respect thereto.

Sect:ox 7.13. Revoiring Fund. Immediately af ter the deposit with the Construction Fund Trustee of the moneys specided in subpara-graphs 7 and S of paragraph B of Section 7.9, the' Construction Fund Trustee shall set aside from such moneys in the Construction Fund the sum of Seven Hundred Fifty Thousand Dollars ($750,000) and deposit said sum to the credit of the System in a special account in the name of the System to be used as a revolving fund (hereinafter referred to as the " Revolving F nd") for payment of those items of costs referred to in Section 7.11 which etnnot conveniently be paid in the manner specided in Section 7.12. The Revolving Fund shall be reimbursed from time to time for such items of cost paid by the System by payments from the Construction Fund by the Construction Fund Trustee upon being furnished with the documents evidencing the propriety of the payments to be reimbursed as provided in Section 7.12. Moneys in the Revolving Fund shall be deemed to be part of the Construction Fund until disbursed as provided in this Section 7.13. Upon approval by the Auditor, moneys in the Revolving Fund shall be disbursed by check or draft signed by the Treasurer or other ot!icer of the System designated by the Board who shall supply, at the expense of the Construction Fund, a adelity bond to the Construction Fund Trustee in the principal amount of Seven Hundred Fifty Thousand Dollars ($750,000).

i Saes. t.12 and 7.13 I

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G1 Secrzos T.14. Distril>ution of Jfoneys in Construction Fund. As soon as practicable after the Construction Engineer shall have file.'. the reports required by Sections 9.4 and 9.5 hereof anybalance then remain.

ing in the Construction Fund including the Revolving Fund authorized by Section 7.13 hereof shall be used and applied by the Construction Fund Trustee as follows and in the following ordert First. to pay to the Bond Fund Trustee for credit to the Interest Account in the Bond Fund that amount. it any of the inter.

est to be paid on the Bonds to and including September 1,1960:

and to the extent of any remainder of such balance,

$ccond, to set aside in the Construction Fund the amounts specided in such report pursuant to clauses (c). (d). (e) and (f) of Section 9.5 hereof, and to apply the same to the payment of the Cost of Construction in accordance with the provisions of Section 7.12 and 7.13 hereof: and to the extent of any remainder of such

balance, Third, to pay to the Bond Fund Trustee for deposit in the Beserve Account the amount of any desciency in such Account: and to the extent of the remainder of sach balan-e.

Fourth. to pay to the Bond Fund Trustee such retnainder for credit to the Bond Retirement Account.

As soon as practicable after the Construction En:rineer hall have fded the report required by Section 9.ti hereof, the Construction Fund Trustee shall pay to the Bond Fund Trustee the amount specided in such report pursuant to clause (b) of such meetion for deposit in the Reservo Account to the extent of any deficiency in any such Account. and to the extent of any remainder of such amount the Construction Fund Trustee shall pay to the Bond Fund Trustee such remainder for eredit to the Bond Retirement Account.

Szc::os T.15. Payment of Funds in Constr'uction F>end to Bond Fund Trustee. In the event the System terminates the WPPSS No. L Project pursuant to subparagraph Ia) of S ction 15 of the WPPSS No.1 Project Agreement, the Construction Fund Trustee shall, at the direction of the System. pay over and deliver to the Bond Fund Trustee such moneys and Investment Securities in the Construction Fund and the Construction Interest Account as shallbe directed by the System.

Sees. 7.14 and 7.15

)

F 5 l F

l 62 Sectox 7.16..Tioneys in Construction Fund Pendina the.4 poli.

cation Thereof. The moneys in the Construction Funil and in the Con.

struction Interest Account therein. pendin:: their application as pro.

vided in this Resolution, shall be held in trust and shall be subject to a prior and paramount lien and charge in favor of the holders of the Bonds, and the holders of the Bonds shall have a valid claim on such moneys for the further accurity of the Donds until pai.1 out or trans.

ferred as herein provided.

ARTICLE VIII-Arrotant:xt. Qt rurtertrox Rc.4towartox, Restov.u.,

Powuu. Deurs 4xo LtADIUnts or TEE Tat s zzs Axo Panso Actxis Sec=os S.1.

Construction Fund Tnsstee. Prior to the delivery of the 1975 Bonds to the initial purchasers thereof the System shall sppoint a Construction Fund Trustee. The Construction Fund Trustee shall be a bank or trust company in Seattle, Washington, San Francisco, California. Chicago, Elinois, or New York. New York, with a capital stock, surplus and undivided proats aggregating in excess of Twenty.

Five lilllion Dollars 6 05.000.000). The Construction Fund Trustee shall signify its acceptance of the.luties and obligations imposed upon it by this Resolution as such Construction Fund Trustee by executing and delivering to the System a written acceptance of the provisions of this Resolution. The System may remove the i.onstruction Fund Trus.

tee for cause, and the Construction Fund Trustee shall be removed at the re<1uest of and upon the adir: native vote of the holders of more than dfty per cent (50re) of the principal amount of the Bonds then out.

standing. In the event of the removal, resignation, disability or refusal to act of the Construction Fund Trustee, the System vill thereuport appoint a successor Construction Fund Trustee, which shall be a barJe or trust company in Seattle, Washington, San Francisco, California, Chicago, Blinois, or New York, New York, with a espital stock, surplus and undivided prodes aggregating in excess of Twenty-Five Stillion Dollars $25.000,000), and such successor shall have all the powers and obligations of the Construction Fund Trustee under this Resolution theretofore rested in its predecessor.

Stertex 5.2. L'ond Fund Tnsstee. Prior to the delivery of the 1975 Bonds to the initial purchasers thereof, the System shall appoint Seen. 7.16, 8.1 and 8.2

Y i.

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63 a Bond Fund Trustee. The Bond Fund Trustee shall be a bank or trust company in Seattle, Washington, San Francisco, California Chicago, Illinois, or New York, New York, with a capitsi stock, surplus and un-divided prodts aggregating in excess of Twenty Five Million Dollars

($25,000,000). The Bond Fund Trustee shall signify its acceptance of the duties and obligations imposed upon it by this Resolution as such Bond Fund Tru. tee by esecuting and delivering to the System a written acceptance of the provisions of this Besolution. The Bond Fund Trus-tee may be removed at the request of and upon the affirmative vote of the holders of more than fifty per cent (50%) of the principal amount of Bonds outstanding. In The event of the removal, resignation, dis-ability or refusal to act of the Bond Fund Trustee, a succesaor may be appointed by the holders of more than Efty per cent (50%) of the p-in-cipal amount of Bonds outstanding, excluding any Bonds held by or for the account of the System, and such successor shall have all the powers and obligations of the Bond Fund Trustee under this Besolution there.

tofore vested in its predecessor, or in any Bondholders' Committee ere-ated under Article III: provided, that unless a successor Bond Fund Trustee shall have been appointed by the holders of Bonds as aforesaid, the System by a duly executed written instrument signed by a majority of the Board shan forthwith appoint a Bond Fund Trustee to fill such vacancy until a successor Bond Fund Trustee shall be appointed by the holders of Bonds as authorized in this section. Any successor Bond Fund Trustee appointed by the Systern shall, immediately and without further act, be superseded by a Bond Fund Trustee appointed by the holders of Bonds. A successor Bond Fund Trustee shan be a bank or trust company in Seattle, Washington, San Francisco, California, Chi-cago, Ulinois, or New York, New York, with a capital stock, surplus and undivided profits aggregating in excess of Twenty Five Minion Douars

($25,000,000).

Sec-to:t 5.3. Resignation of Trustees. The Bond Fund Trustee or the Construction Fund Trustee may at any time resign and be dis-charged of its duties and obligations under this Resolution by giving not less than 60 days written notice to the System and publishing notice thereof, specifying the date when such resignation shan take efect, once in each week for three successive calendar weeks in the manner provided in Section 12.2 hereof, and such resignation shall take effect upon the day speculed in such notice unlest previously a sue.

cessor shall have been appointed by the System in the case of the

$.es. 8J and sJ s

V l

M Construction Fund Trustee, or by the Systera or the Bondholders as above provided in the case of the Bond Fund Trustee, in which event t

such resignation shall take edeet immediately on the appointment of such successor.

5sertos 9.4. Aprointment of Paying Agents. Each Paging Agent to Hold JIoney in Trust. The System shall appoint Payin!r Agents for each Series of Bonds. which shall be banks or trust companies in each of the cities of Seattle. Washington. Chicago, Illinois, and New York New York, and the Bonds and the interest thereon shall be pay.

e able at the principal ottices of said Paying Agents in said cities. Each Paring Agent shall hold in trust for the benetit of the Bondholders and the Bond Fund Trustee all sums held by such Paying Agent for-the payment of the principal of and interest on tne Bonds. Anything in this section to the contrary notwithstanding, the System may, at any time, for the purpose of obtaining a satisfactica and discharge of this Resolution. or for any other reason. cause to ce paid to the Bond Fund Trustee all sums held in trust by any Pay.ng Agent hereunder as required by this section. which sums sha.'. v. neld by the Bond Fund Trastee upon the trusts herein contained. and such Paying Agent shall thereupon be released from all further liability with respect to such sums.

Secrtos S.5. Action by Bond Fund Trustee in Payment af Bonds.

The appropriate aceoants of the Bond Fund shall be drawn upon by the Bond Fund Trustee for the purpose of paying the principal of.

interest and premium. if any, on the Bonds or transferring moneys to the Paying Agents for that purpose.

Secrtos S 6. Duties and Obligations of the Trustees. The duties and obligations of each trustee appointed by or pursuant to the pro.

visions of this Resolution prior to the occurrence of an Event of De.

fault thereinafter dedned), and subsequent to the curing of such Event of Default, shall be determined solely by the express provisions of this Resolution, and such trustee shall not be liable for any action of l

any other trustee and shall not otherwise be liable except for the per.

i formance of its duties and obligations as specideally set forth herein and to act in good faith in the performance thereof, and no implied duties or obligations shall be incurred by such trustee other than those specided herein, and such trustee shall be protected when acting Seen. L3. L4. L3 and L6 l

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65 in good faith upon the advice of counsel, who may be counsel to the System. In case an Event of Default has occurred which has not ban enred, such trustee shall exercise such of the rights and powers vested in it by this Resolution and use the same degree of care and skill in the exercise thereof as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. The Bond Fund Trustee shall not be deemed to have knowledge of any Event of De-fault not known to such trustee.

1 Szcuos 8.7. Evidence on TVhich Trustees and Paying Agents Jiay Act. Subject to the provisions of Section S.G hereof the trustees may conclusively rely, as to the correctness of the statements, con.

clasions and opinions expressed therein. upon any certiacate, report, opinion or other document furnished to such trustee pursuant to any provisions of this Resolution. Except as otherwise expressly provided in this Resolation, any nquest, consent. certificate, demand, notice.

order, appointment or other direction made or given by the System to any trustee or the Psying Agents shall be deemed to have been sudi.

eiently made or given by the proper party or parties if executed on behalf of the System by an oEicer of the Board.

Szenos S.S.

TVhen Trustees.Vot Required to Act..\\'one of the previsions contained in this Resolution shall require any trustee to spend or risk its own funds or otherMse incur individual Anancial responsibility in the performance of any of its duties or in the exercise of any of its rights or powers, if there are reasonable grounds for believing that the npsyment thereof is not reasonably assured to it under the terms of this Resolution.

Sacmo: 6.9. Compensation of Trustees and Paying Agents. The Bond Fund Trustee, the Construction Fund Trustee and the Paying Agents shall be entitled to reasonable compensation for all services rendend by them in the execution. exercise and performance of any of the powers and duties to be exercised or performed by the Bond Fund Trustee. the Construction Fund Trustee and the Paying Agents, respectively, pursuant to the provisions of this Resolution or any Series Resolution, which compensation shall not be limited by any provisions of law in ngsrd to the compensation of a trustee of an expnss trust, and the System will pay or reimburse the Bond Fund Trustee, the Sees. 8.6. 8.7 La and 3.9 1

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66 Construction Fund Trustee and the Paying Agents upon request for all expenses, disbursements and advances incurred or made by the Bond Fund Trustee, the Construction Fund Trustee or Paring Agents, as the case may be, in accordance with any of the provisions hereof (including the reasonable compensation and expenses and disburse.

ments of counsel for the Bond Fund Trustee, the Construction Fund Trustee or Paying Agents, as the case may be, and of any persons not regularly in the employ thereof). Subject to the provisions of Section S.6 hereof, the Bond Fund Trustee shall be entitled to indemnity from the System against any loss, liability or expense incurred on the part of the Bond Fund Trustee arising out of or in connection with the acceptance or administration of the powers and duties of the trust erested pursuant to the provisions of this Resolution, including the cost and expense of defending against any claim or liability in the premises, and. to the extent permitted by law, the Bond Fund Trustee shall have a lien or claim for payment of sveh compensation. expenses and disbursements of counsel. losses. liabilities and expenses prior to that of the holders of the Bonds upon any funds held by it uder this Resolution.

Stenos S.10..Vo Liability of Trustets for Correctness of Recitals.

The Bond Fud Trustee and the Construction Fund Trustee shall not be responsible in any manner whatsoever for the correctness of the recitals, statements and representations herein or in the Bonds or in the coupons, all of which are made by the System solely. The Bond Fud Trustee and the Construction Fund Trustee make no represents.

tion u to the value or condition of the WPPSS No.1. Project or any part thereof, or as to the right, title and interest of the System in the WPPSS No.1 Project or as to the lien created by this Resolution, or as to the validity of this Resolution or of the Bonds issued herender, and the Bond Fund Trustee and the Construction Fund Trustee shall incur no liability or ruponsibility in respect of any such matters. The Bond Fund Trustee and the Construction Fund Trustee shall not have any responsibility as to the amount of Bonds issued or outstanding at any time.

Stenos 8.11. Evidence on Which Trustees May Rely: Rights of Trustees to Deal in Bonds and.iny Other Obligations of the System.

Subject to the provisions of Section S.6,in eau at any time it shall be necessary or desirable for any trustee to make anyinvestigation respect.

i Sess. L9,8.10 and 8.11 i

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_ _ _ _,. _. -. - - - - - - - - - - - ~ ~ " ~ ^

N f

p 67 ing any fact preparatory to taking or not taking any action or doing or not doing any thing, and in any case in which this Besolution pro.

vides for permitting or taking any action, such trustee may rely upon any certinente required or permitted to be filed with it under the provi.

sions of the Resolution, and any such certifieste shall be evidence of such fact to protect it in any action that it may or may not tde or in respect of anything it may or may not do, by reason of the supposed existence of such fact.

Any trustee and its directors. offleers, employees or agents. may in good faith buy, sell, own and hold any of the Bonds or coupens issued under the provisions of this Resolution. and may join in any action which any Bondholder may be entitled to take with like effect as if such trustee were not a trustee under the Besolution. Any trustee may in good faith hold any other form of indebtedness of the System, own.

secept or negotiate any drafts, bills of exchange, acceptsaces or obli.

gations thereof: make disbursements therefor and enter into any com.

mercial or business arrangement therewith, including the purchase from or sale to the System of Investment Securities. No trustee shall be deemed to have any condiet of interest solely by reaton of any such trusaction.

ARTICLE II Tax Cosstat:cr.os Esacrzza S ze:to s 9.1. Appointment 'of Construction Engineer. The sp.

pointment of United Engineers & Constructors, Inc., as Construction Engineer for the System by Resolution No. 467 of the Executive Com.

mittee of the System is hereby condrmed, and the System covenants that it will retain on a continuous basis United Engineers & Construe.

tors,Ine' 'or some other construction engineer or engineering drm of national reputation, recognized for knowledge, skill and experience in the design, construction ud operation of nuclear generating facilities, until the report has been rendered by the Construction Engineer as provided in Section 9.6 hereof.

Szc=os 9.2. Construction Engineer Not to be Employed as Con.

sulting Engineer. The System will not employ the Construction Engi.

neer as Consulting Engineer for the WPPSS No.1 Project and will not, so long as any of the Bonds are outstanding, now or hereafter Sean. L11. 9.1 and 9J

68 employ the Construction Engineer In any capacity in connection with the WPPSS No.1 Project except that of Construction Enginar.

Sscuos 9.3. Duties of Construction Engineer. The System shall cause the Construction Engineer to:

A. Prepare and submit to the System such drawings, designs, plans, speciacations, surveys and reports as are necessary for the proper acquisition und construction of the WPPSS No.1 Project, and approve and supervise any necessary modidentions in the design, plans and speciacations thereof: and prepare and deliver to the System allcertidentes referred to in this Resolution required to be furnished by the Construction Engineer; B. Prepare and submit to the System, the Construction Fund Trustee, the Bond Fund Trustu and to such Bondholders as may Sie with the System a request in writing for copies thereof, quar.

terly reports of progress during the Period of Construction. ineled.

lag data as to the date of expected completion and the comparison of estimated construction time ana the Cost of Construction as compared with the estimates made prior to the issuance and sale of any Bonds hereunder, and an estimate of the amounts that will be needed from time to time to pay the Cost of Construction and the estimated dates of such pannents:

C. Continuously supervise and inspect the acquisition and construction of the WPPSS No.1 Project in accordance with the usual accepted practices of such inspection and supervision:

D. Upon completion and testing as required by the specidea.

tions of the WPPSS No.1 Project, eertify to the System to that effect and to the further edect that the WPPSS No.1 Profut is i

ready for normal continuous operation.

Sscuos 9.4. Report When WPPSS No. 2 Project Ready For Normal Continuous Operation. As soon as practicable after the date as of which the Construction Engineer shall determine that (i) the WPPSS No.1 Project conforms to the plans and specidentions as may be modined from time to time and is ready for normal conrduous operation; (ii) that the acquisition. construction and installation of the WPPSS No.1 Project has been completed in every material respect; and (111) that the costs (ine'uding contingencies), as estimated by the Construction Engmeer, of all work remaining to be done in order to Some. 9.2. 9J and 9.4 y-r

,n-,_,,

--.n

69 complete such acquisition construction and installation (hereinafter in this Article II called " remaining work") will not exceed $3,000,000, the System shall cause the Construction Engineer to & a report to that effect with the System, the Bond Fund Trustee and the Construe.

tion Fund Trustee.

Szcstos 9.5. Details of Report When WPPSS.Yo.1 Project Ready for.Vormal Continuous Operation or the Date of Commercial Operation, Whickerer is I.ater. As soon as practicable after the date referred to in Section 0.4 hereof, or the Date of Commercial Operation, whichever is the later, the System shall cause the Construction Engineer to & with the System. the Bond Fund Trustee and the Construction Fund Trustee a report setting forth, as of such later date, the following in reasonable detail:

(a) the total Cost of Construction esclusive of claims of con.

tractors and others which are the subject of actual or prospective dispute or controversy (hereinafter in this Article IX called " dis.

pute or controversy") and esclusive of the cost (including con.

tinpncies), as estimated by the Construction Engineer, of the remainmg work; (b) the portion of the total Cost of Construction speciAed pursuant to the foregoing clause (a) which has been paid in full; (e) the portion of the total Cost of Construction specided pursuant to the foregoing clause (a) which remains to be paid, including all amounts which are not the subject of dispute or controversy but are dependent upon the satisfaction of any agree.

ments or conditions precedent to such payment; (d) the aggregate amount of the claims of contractors and others which are the subject of dispute or' controversy; (e) the cost (including continpncies), as estimated by the Construction Engineer and as approved by the System of the remraning work; (f) su.h amount, if any, as the Construction Engineer shall determine is neceesary or desirable to be set aside in the Construe.

tion Fund for continencies, including any further modiacations which may be required under Section 3.3 hereof, in order to avoid the possible necessity of issuance or further issuance of Bonds.

Sese. 9.4 and 9.3

~ - -

1 l

i l

i I

70 Sectios 0.G.

Report on Final Completion of the WPPSS No.1 Project. As soon as practiesble after the date as of which the Construe.

tion Engineer shall dere:mine that the acquisition, construction and installation of the WPPSS No.1 Project has been tully completed smi that the tots! Cost of Construction has b en fully paid and satisded (including but without limitation dust psyuient or satisfaction t

of esch elispute or controversy anil pa,nnent in full for all remaining work), the System shall cause the Construction Engineer to die a report j

with the System. the Bond Fund Trustee smi the Construction Fund l

Trustee to that erfect, setting forth (at the basis of such determination in reasonab.e detail and ib) the amount remaining in the Construction i

j Fund atter such full payment and satisfaction.

Sn cr:o x 9.7.

Estimate of Cost of Construction and Estim?xte of Date of Payment. At or prior to the issunnee and delivery of any Bonds, other than the 1975 Bonds, the System shall cause the Construe.

j tion Engineer to d!e snth the Construction Fund Trustee and with the System the cert:dente of the Construction Engineer required by Section 4.4 hereof.

i l

In rendering any certideate pttrsuant to this Resolution, the Con.

l struction Eng.neer may rely upon certidestes and estmates of the System with respect to owner's costs, including the expense of Fuel.

ARTICI.E I I

Corr.xms To Snct,r.s Boxes l

The System hereby covenants and agrees with the purchasers and I

holders of all bonds issued pursuant to this Resolution as follows:

Sncitos 10.1. Certain Cotenants by the Sotstem trith Respect to Resolution No. Irs. On and after the date of the drst delivery of any Bonds pursuant to this Resolution:

1.

The System shall not issue any bonds or other evidences of indebtedness under Resolution No.175 so long as the obliganens of such Resolution are satisded under clus Resolution:

2. The System still faithfully and punctually discharge all of its duties and obligations under and pursuant to its Resolunon No.

i l

175 Insofar as these have not been discharged by reason of (i) the exercise by the Administrator of his rightJ under Section 5ti) of

$.ee. 9.6. 9.7 sad 10.1

9 71 the Hanford Project Exchango Agreements. (ii) the execution of 2

Supplemental Agreement No. 4. Contract No. AT(451) 1355 by the

]

System and ERDA, and tili) by the provisions of this Resolution; j

3. The System will make all pannents and deposits to be t

made under the provisions of said Resolution No.175 at the times and in the manner prescribed therein. Commencing on July 1.1960, such payments and deposits shall be made from the moneys to be provided for that purpo=e pursuant to Section 7.2 of this Resolution if and to the extent that such obligations are not other.

wise provided for; 4.

The System thall apply amounts set aside in the Hanford Project Bond Fund solely for the payment of the principal of, premium, if any, and interest on the 1963 Bonds; 5.

The System shall apply amounts held as reserves in the Bond Reserve Account in the Hanford Project Bond Fund solely for the pannent of the principal of, premium, if any, and interest on the 1963 Bonds;

6. If on any December 31 following July 1.1990 there shall exist in the Hanford Project Revenue Fund, an amount which shall exceed the System's required amount of working capital, the amount of such excess shall be applied to reduce the amounts required to be deposited in the Hanford Project Revence Fund pursuant to Section 7.2 of this Resolution.

7. The System ; hall not amend Resolution No.173 is any manner which adverselv afects or diminishes the rights of the Bondholders under this Resolution.

Nothing in this Resolution shall be constmed to prevent the System from providing for the payment of all or part of its costs with respect to Hanford Project, including payments and deposits to be made under the provisions of Resolution No.179. from sources other than pannents to be received under the WPPSS No.1 Project Net Billing Agreements and WPPSS No.1 Project Exchange Agreements.

adopting annual budgets. Including amendments thereto, which redect such arrangements and, if deemed by the System necessary or advis.

able, entering into agreements amendatory or supplemental to the WPPSS No.1 Project Agreement. WPPSS No.1 Project Net Billing Agreements and WPPSS No.1 Project Exchange Agreements to redect such arrangements.

Sea.10.1

ul u Im 72 Sze11os 10.2. To Complete the WPPSS No.1 Project: To Main.

tain the Properties of the WPPSS No.1 Project; To Keep the WPPSS No. 2 Project in Good Repair. The System, subject to the provisions of the WPPSS No.1 Project Agreement, will (i) proceed with all rea.

sonable diligence to and will construct to completion the WPPSS No.1 Project and will complete such construction at the earliest practical time, (ii) fulall all of its obligations with respect to such construct-:en and will thereafter at all times operate the properties of the WPPSS l

No.1 Project and the business in connection therewith in an efeient manner and at reasonable cost, (iii) maintain, preserve and keep. or cause to be maintained. preserved and kept, the properties of the l

WPPSS No.1 Project, and all additions and betterments thereto and i

extensions thereof, and every part and parcel thereof in good repair, working order and condition, and (iv) from time to time make, or cause to be made, subject to Section 11(e) of the WPPSS No.1 Project Agreement, all necessary and proper repairs, renewals, repiseements, additions, extensions and betterments thereto, so that at all times the business carried on in connection therewith shall be properly and advantageously conducted.

Ster:os 10.3. Use of WPPSS No.1 Project Capability. Pvcer and Energy; Suficiency of Ret ennes. So long as any of the bonds j issued pursuant to this Resolution are outstanding and uripsid. the V System agrees (1) that the WPPSS No.1 Project capability and 111 power and energy produced by the WPPSS No.1 Project will be dis.

posed of solely for the benedt and acevunt of the WPPSS No.1 Project and pursuant to the provisions of the WPPSS No.1 Project Exchange Agreements and the WPPSS No.1 Project Net Billing Agreements:

and (2) that, whether or not the generation or transmission or power and energy by the WPPSS No.1 Project is susp nded interrupted or reduced for any reason whatner. the gross revenues received in cash from rates and charges for such Project espability and power and energy sold. furnished or supplied through the facilities of the WPPSS No.1 Project will. in the aggregate. be st$cient (to the extent not otherwise specidestly provided for in this Resolution):

(a) to make when due all parments which the Sy* tem is obligated to set aside and pay into the Hanford Project Revenue Fund pursuant to Section 7.2 hereof; Sees.1o.2 and to.3

73 (b) to pay all costs of. and all charges and expenses in con.

nection with, the proper operation and maintenance of and repairs, renewals and replacements to the WPPSS No.1 Project in order to keep the WPPSS No.1 Project in good operating condition and all taxes, assessments or other governmental charges lawfully imposed on the WPPSS No.1 Project or the revenues therefrom.

or payments in lieu thereof; (c) to make when due au payments which the System is obil.

gated to set aside and to pay (i) to the Bond Fund Trustee for the account of the Bond Fund pursuant to Section 7.3 hereof and (ii) into the special fund or funds created for the payment of the principal of, premium. if any, and interest on n!! additional bonds issued in accordance with Section 10.7 hereof; (d) to make when due all payments which the System is obli.

gated to pay into the Fuel Fund and the Reserre and Contingency Fund pursuant to Sections 7.5 and 7.6 hereof; (e) to pay the cost of prevention or correction of any unusual loss or damage to, and for major repairs. renewals and replace.

ments to, the WPPSS No.1 Project. in order to keep the WPPSS No.1 Project in good operating conditiort and for additions. bettar.

ments and improvements thereto and extensions thereof less that part, if any, of such cost as is provided for by insurance, by amounts available therefor in the Reserve and Conting.ney Fund and by the proceeds of sale of additional bonds issued in accordance with Section 10.7 hereof; and (f) to pay or discharge when due au other charges or obugs.

tions against the gross revenues of the WPPSS No.1 Project of whatever nature and whether now or hereafter imposed by law or by contract; provided that, for the purpose of this Section. proceeds of insurance i

policies,if any, payable to the System because of loss of revenue caused by delay in the completion of the construction of the WPPSS No.1 Project, or because the operation thereof is suspended. interrupted or reduced, shan be deemed to be gross revenues from the sale of power and energy.

s 1oJ

~

74 Saeno r 10.4. To Tiz, Establish. 3taintain and Collect Sufcient Rates and Charpes. The System shall fix, establish. meintain and col.

leet rates and charps for the WPPSS No.1 Project capability, electric power and energy and other serdees, facilities and commodities, sold.

furnished or supplied through the facilities of the WPPSS No.1 Proj-ect, including power and energy delivered therefrom to or for the account of the System. which shall be fair and non. discriminatory and adequate, whether or not the generation or transmission of power and energy by the WPPSS No.1 Project is suspended, interrupted or redneed for any reason whatever, to provide the System with revenues sufficient to pay the costs of the proper operation. maintenance and repair of the WPPSS No.1 Project, and also for the payment of all costs, expenses and charps specified in Sation 10.3 above, and any and all other amounts which the System may now or hereafter buome obligated to pay or set aside from said revenues by law or contract.

Sacros 10.5. Not to Amend WPPSS No.1 Project E: change Agreements. WPPSS No.1 Project Net Billing Agrsements and WPPSS No.1 Projeet Agreement..So long as any of the bonds issued pursuant to this Resolution are outstanding and unpaid, the System will not (i) voluntarily consent to or permit any rescission of, nor will it consent to any amendment to nor othersdse take any action under or in connectio's with any of the WPPSS No.1 Project Exchann Apuments and the WPPSS No.1 Project Net Billing Agreements which will reduce the payments provided for therein or which wiu in any manner impair or adversely affect the rights of the System or of the holders from time to time of the bonds issued pursuant to this Resolution, and the System shall perform all of its obligations ander the WPPSS No.1 Project Exchann Agreements and the WPPSS No.

1 Project Net Biuing Apuments and take such actions and procud.

ings from time to time as shall be necessary to protect and safeguard the security for the payment of the bonds issued pursuant to this Resolution afforded by the provisions of such Apeements: or (ii) voluntarily consent to or permit any rescission of nor will it consent to any amendment to or modidention of, nor otherwise take any action under or in connection with the WPPSS No.1 Projut Apument which willin any manner impair or adversely affect the rights of the System or of the holders from time to time of the bonds issued pursuant to this i

Resolution. The System shall perform all of its obligations ander the WPPSS No.1 Project Apument and shall take such actions and pro-Sese. lo.4.md 10.5 l

V 75 ceedings from time to time as shall be necessary to protect and safe.

guard b security for b payment of the bonds issued pursuant to this Resolution afforded by the provisions of the WPPSS No.1 Project Agnement.

Saenos 10.6. Not to Furnish Facilities of the WPPSS No.1 Project Free of Charge; Enforcement of Accounts Due. So long as any bonds issued pursuant to this Resolution are outstanding and un.

paid, the System will not furnish or supply electric energy or any other commodity, service or facility furnished by or in connection with the operation of the WPPSS No.1 Project, free of charp to any other system of & System or any person, firm or corporation, public or private, and the System will promptly enforce the pannent of any and all accounts owing to the System by reason of the ownership and operation of the WPPSS No.1 Projut.

Szenos 10.7. Additional Obligations. The System will not hen.

after create any other special fund or funds for the pannent of revenue bonds, warrants or other obligations or issue any bonds. warrants or other obligations payable out of or secured by a pledp of the revenues or properties of the WPPSS No.1 Project, or enate any additional obligations which will rank on a parity with or in priority over the charge and lien on such revenues or properties for b payments into the Bond Fund. except that additional bonds may be issued payable from said nvenues on a parity with the Bonds henby authorized. and secured by an equal charp and tien on such nvenues, in such principal amount as may be required for any one or man of the following pur.

poses:

(a) To comply with any order or decision of any state or federal pvernmental agency or authority with authority to issue or make and enforce an order or decision, requiring the installation of additionalfacilities or mediacations at or in b WPPSS No.1 Projoet; j

(b) To comply with Section 11(c) of the WPPSS No.1 Project Agreement for & lasuance of additionalbonds to pay for renewals.

upairs and replacements, and for capital additions and betterments necessary to achieve design capability, or required by any pvern.

mental spacy or authority; i

S 10.3,10.4 and 10.7 e6 W @

d

_ _ _ _ - -.. _ _ _, -. _ ~ _ _ _ ~ _ _ - _ -,. _. _ _, - - -

76 (c) Subject to the WPPSS No.1 Project Agreement, to pro.

vide funds for capital additions and betterments to the WPPS3 No.1 Project which in the opinion of the Consulting Engineer are necessary or desirable to improve open. ting reliability or to reduce unit power costs, such opinion to be embodied in a certideste og the Consulting Engineer to be aled with the system and the Bond Fund Trustee prior to the delivery of such additional bonds to the initial purchaser thereof; (d) Subject to the WPPSS No.1 Project Agreement, to pro.

vide funds for the purchase of Fuel for the WPPS$ No.1 Project; and (e) To refund at any time any or all of the then outstanding bonds issued pursunut to this Resolution: provided that the amount required to be paid into the Interest Account. Principal Account and Bond Retirement Account in the Bond Fund, and the interest accounts, principal accounts and bond retirement accounts in any bond funds for additional bonds issued pursuant to this Resolution, to pay the principal of and interest on bonds issued pursuant to this Resolution in any year in which any bonds issued pursuant to this Resolution not refunded are to be outstanding, shall not be greater than the amount which would have been payable into the Interest Account Principal Account and Bond Retirement Account and such interest accounts, principal secounts and bond retirement accounts if the bonds issued pursuant to this Resolution to be refunded were not so refunded.

The System shall not issue any additional bonds pursuant to this Section unless prior to or simultaneously with the issuance of such bonds the System shall have in effect valid written contracts for the sale of the WPPSS No.1 Project espability and power and energy of the WPPSS No.1 Project, which, in the opinion of the Board (as evi.

denced by a resolution thereof. certiaed by its Secretary, died with the Bond Fund Trustee) and of the Consulting Engineer tas evidenced by a certi8este aled with the Bond Fund Trustee) wii! produce revenues.

l at least sudicient, whether or not the generation or transmission of power sad energy by the WPPSS No.1 Project is suspended. inter.

rupted or reduced for any ressor. whatever, to enable the Srstem to meet allits obligations under this Resolution. lacluding the timely pay.

ment of allcosts, expenses and charges spuided in Section 10.3.

See, to.7

i i

77 l

The contracts referred to in the preceding paragraph shall be for terms extending at least to the final maturity date of the Bonds, provided, however, that some of such contracts may terminate prior to said date if in the opinion of the Board and the Consulting Engineer, evidenced as aforesaid, such contracts and the contracts not terminating prior to such date wi.Ilin the aggregate produce the reve-nues required by the preceding paragraph; and unless the power pur.

chasers thereunder shall be the other parties to the WPPSS No.1 Project Exchange Agruments or the WPPSS No.1 Project Net Billing Agreements, such contracts shall, in the opinion of the Consulting Engineer as evidenced by a certiacate flied with the System and the Bond Fud Trustee, provide a sound basis for the issuance of addi-tional bonds pursuant to this Section. Such contracts shall contain terms with respect to payments for the WPPSS No.1 Project capability and power and energy, and the items of annual power costs to be included in the price for such capability and power and energy to such purchasers, no less favorable to the System than the terms of the WPPSS No.1 Project Exchange Agreements and the WPPSS No.1 Project Net Billing Agreements. L*pon or prior to the issuance of such additional bonds, there shall be filed with the Bond Fund Trustee a written opinion of counsel to the System that such contracts are valid and binding upon the parties thereto and are in accordance with existing law.

The supplemental resolution or resolutions authorizing the issuance of any such additional bonds shall:

L Designate each such issue as a separate series by reference to the year of issuance:

2. Provide that. within the limitations in pars::raph 7 below, such bonds shall be either term bonds, serial bonds, or a co=bina-tion of term and serial bonds:

3. Provide that the interest on such bonds shall be paysble on January 1 and July 1 of each year, and the principal pannents and sinking fund payments for the retirement of term bonds in advance of maturity, shallbe parnble on either of said dates:

4. Designate the Bond Fund Trusta as bond fund trustee for such bonds; See lo.?

i 78

5. Cnate s separate bond fund for such additional bonds containing an intenst account, principal account (if serial bonds an authorind), bond retinment account (if term bonds are author.

ind), and unrve account; and provide for the transfer to such accouts of moneys from the Revenue Fund in the amount neces.

sary to pay the principal, interest and redemption premiums, if any, on such additional bonds when due;

6. Provide that b respective amounts to be paid into such separate bond fund for & retirement of such adaitional bonds in each year shall commence within Eve (5) years from the date of such bonds, provided, however, that payment of such amounts for the retirement of refunding bonds may commence at the time when payments with respect to the retirement of the Bonds or additional bonds being refunded would be nquind if such Bonds or additional bonds were not so afunded;

7. Provide that the anal maturity date of such bonds issued for the purpose specided in clause (e) of this Section shall be the anal maturity date of the bonds issued bareunder being refunded, and that the anal maturity date for such bonds issued for purposes specided in clauses (a), (b), (c) and (d) of this Section shall be no later than the expiration of the service life of & facilities or Fuel, as the case may be, Snanced frem 6 proceeds of such bonds as determined by b Consulting Engineer at the time of issuanee, such deter:mnation to be embodied in a certidente to be died with the System and the Bond Fund Trustee prior to the delivery of such bonds to the initial purchaser thereof; S. Provide that from the proceeds of such additial bond.:

or revenues of & Project available therefor an amount equal to the maximum amount of intenst to become due on such additiceal l

bonds in any six. month period from the date of such additional l

bonds to & Anal maturity dates thereof shall be deposited in the nserve account established in such separate bond fund. and that said reserve account shall thereafter be maintained at all &nes at said amount so long as such bonds an outstanding provided. how.

ever, that such amount need not be deposited in the reserve secount for any refunding bonds until the Bonds or additional bonds being refunded an no longer deemed outstanding henunder, and that such deposit may be accomplished through the transfer of moneys deposited in the Reserve Account or any reserve account for addi.

l l

Sea.10.7 l

l I

N F

9 79 tional bonds to provide a reserve for the Bonds or additional bonds being refunded when such Bonds or additional bonds are no longer deemed outstanding; sad

)

9.

Provide that the proceeds of such additional bonds, if not

{

required for the purpose of refunding outstanding. bonds issued pursuant to this Resolution or for the purpose speciAed in para.

graph (S) above, shall be deposited. In the case of bonds issued for the purpose specified in clause (d) of this Section, in the Fuel Fund. or. in the case of bonds issued for the purposes speciavd in elanses (a), (b) and (c) of this Section in a construction fund to be held by a construction fund trustee and that payments from such construction fund shall be made upon compliance with terms and conditions substantially the same as are provided by Sections 7.12 and 7.13 of this Resolution for the withdrawal of moneys from the Construction Fund.

Nothing herein contained shall prevent the System from issuing revenue bonds, notes or warrants or other evidences of indebtedness which are a charge upon all or any portion of the revenues of the WPPSS No.1 Project junior or inferior to the pannents to be made into the Bond Fund and the bond funds created for additional bonds issued purscant to this Resolution.

j Sncrtos 10.8. Not to Encumber or Dispose of WPPS3 No.1 l

Profeet Properties. The System will not sell, mortgage, lease or other.

wise dispose of any of the WPPSS No.1 Project properties, or permit the sale, mortgage, lease or other disposition thereof, except as herein.

after provided in this section.

L The System may sell, lease or otherwise dispose of such properties, provided that simultaneously with such sale or other disposidon thereof, provision is made for the payment of cash I

into the Hanford Project Revenue Fund and the Bond Fund and any other special funds of the System created for the purpose of

^

paying additional bonds issued pursuant to this Resolution suf.

Scient to retire, and to pay the interest to accrue prior to such retirement on the 1963 Bonds and all bonds issued pursuant to this Resolution then outstanding in full in accordance with the requirements of Resolution No.178, this Resolution and any resolution authorizing such additional bonds.

Seen.10.7 and 10J

)

i 80 2.

The System may sell, lease or otherwise dispose of,

portion of the works, plants and facilities of the WPPSS y,,,{

Project and any real and personal property comprising a Pert thereof which is anserviceable, inadequate, obsolete. worn-out or undt to be used or no lonpr required for use in connection Mt the operation of the WPPSS No.1 Project provided howere,h that if the original cost of the properties so to be disposed of wa,'

in excess of $200,000, the Consulting Engineer shall tirst certify that the properties to be disposed of are unserviceable, inadequate, obsolete, worn-out or undt to be used or no loner required for.

use in connection with the operations of the WPPSS No.1 Project.

3toneys received by the System as the proceeds of any such sale, lease or other disposition of a portion of the properties of the WPPSS No.1 Project shall to the extent of $100.000 be trans.

ferred to the Reserve and Contingency Fund and used for the purposes spuided in Section 7.G for the use of other moneys in said Reserve and Contingency Fund, and any moneys receiv.d from such partial disposition of property in excess of $100,000 shall be paid into the Bond Retirement Account and the bond redre=ent accounts created for additional bonds issaed pursuant to this Resolution. in the proportion which the outstanding prinei.

pal amount of Bonds and such additional bonds of each series bears to the total outstanding principal amount of Bonds and such additional bonds of all series and used for the purchase or redemption of Bonds and such additional bonds: provided, however, that if such sale, lease or other disposition of a portion of the properties of the WPPSS No.1 Project is in enenection with the replacement of such properties, all moneys received from such partial dispositiert of property shall be transferred to the Reserve and Continenay Fund; and provided further, however, that any moneys received by the Systeta as proceeds of any such sale, lease or other disposition of any Fuel. Including any and all nuclear materiel tools, equipment, instruments and spare parts, topther with all sasociated and related property necessary to the acquisition, furnishing, processing, reprocessing, and disposal of the Fuel, shall be transferred to the Fuel Fund.

3.

In the event that the ownership of the properties of the WPPSS No.1 Project or any part thereof, shall be transferred from the System through the operation of law, any moneys received by the System as a result of any such transfer shall be paid into the

%e. to.8 l

6 l

81 Bond Retirement Account and & bond retirement necounts created for additional bonds issued pursuant to this Resolution.

In b proportion which the outstanding principal amount of Bonds and such additional bonds of each series bears to b total outstanding principal amount of Bonds and such additional bonds of all series and used for the purchase or redemption of Bonds and auch additional bonda.

Notwithstanding the provisions of paragraphs 2 and 3 of this Sec.

tion 10.S, moneys received by b System prior to & Date of Com.

mercial Operation. as a result of any sale lease, transfer or other disposition spwided in such paragraphs, shan be transferred to the Conscruction Fund.

Nothing contained in this Section or in this Besolution ihan be construed to prevent the System from constructing as a separate utility system an additional pnerating unit or units on or near the site of the WPPSS No.1 Projut and using faciuties of the WPPSS No.1 Project in connection with the construction or operation therewith without compensation therefor: provided, however, that the Consulting Engi.

nur shall certify to the System and & Bond Fund Trustu that such use win not adversely afect b operations of the Project or interfere with h per armance by & System of its obilgations under this Resf.ation.

Szenos 10.9. Innrosce. The System win kup, or cause to be kept, the works, plants and faciuties comprising the properties of b WPPSS No.1 Project sad 6 operation breof insured to the extent available at reasonable cost with responsible insurers with poHeies payable to the System for & beneat of 6 WPPSS No.1 Project, the WPPSS No.1 Project Participants and the Mministrator under the WPPSS No.1 Project Net Billing Agruments, as their interests may appear, against risks of direct physicalloss, damap or destruction of 6 WPPSS No.1 Project, accidents, ensualties, or negupnee, includ.

Ing liability insurance and employer's liability, at least to the extent that similar insurance is usually carried by electric utilities operating like properties, and such ohr insurance as the parties to the Prof.

est Agreement may agree upon pursuant to subsection (a) of Sution 12 of the WPPSS No.1 Project Agreement. During & Period of Construction,in the event of anyloss or damap to 6 properties of 6 WPPSS No.1 Project covered by such insurance. 6 System will transfer the it.surance proceeds received by the System covering such Sean.10.s and to.9

=a m-.

-~-m,.,

y e

\\

I S2 damage or loss to the Construction Fund; after the Period of Con.

struction the prxeeds of insuranco covering such toes or damage shall be deposited in the lieserve and contingency Fund, provided, how.

ever, that procals of insurance covering loss or damage to Fuel shall be desposited in the Fuel Fund. In the esse of loss, including loss of revenue, caused by delay in completion, or by suspension or interrup.

tion of generation or transmission of power and energy, the proceeds received by the System of any insurance policy or polleies conring i

such loss occurring prior to September 1,1950, shall be paid into the i

Construction Fund and the proceeds received by the System of any I

insurance policy or policies covering such loss after September 1.1950 shall be paid into the Rennue Fund and used to reduce payments by the WPPSS No.1 Project Participants under the WPPSS No.1 Pro-ject Net Billing Agreements. The System may agree to purchase addl.

tional lasurance in secordance with subsection (b) of Section 12 of the WPPSS No.1 Project Agrument. Any proceeds from such additional insurance thall be disbursed as directed by the Administrator. WitMn sixty (t)0) days after the close of asch twelve. month period beginning with the twelve month period following the Date of Commercial Opers.

tion, the System shall tile. or esuse to be died, with the Bond Fund Trustee a certideste of the Consul::ng Engmeer describing in reason.

able detail the insurance then in erfect pursuant to the requirements of this section stating whether,in its opinion. such Insurance then in e:fect reasonably complies with the proruions hereof. A copy of each such certidente shall be forwarded to any Bondholder who shall die with the System a written request therefor.

Sze::o:t 10.10. Books of Jccount;.innual.ludit. The Sptem shall keep proper books of account for the WPPSS No.1 Project, showing as a aparate utility system the accounts of the WPPSS No.

1 Project in accordance with the rules and regulations prescribed by any governmental spacy authorized to prescribe such rules including the Division of Manielpal Corporations of the State Auditor's oSce of the State of Washington, or other state department or agency succeeding to such duties of the State Auditor's omee. and in accordance with the

(*niform System of Accounts presenbed from time to time by the Federal Power Commission, or other federal anney having jurisdie.

I tion our electric public utility companies owning and operating properties similar to the electric pioperties operated by the Sptem, i

Sees.10.9 sad 10.10 sk

N P

)

S3 whether or not the System is requind by law to use such system of ac.

counts. Within one hundred twonty (1:.V) days after each June 30, the System shall cause such books of accounts to be audited by indspendent evrtiact public accountants of national reputat on lleensed, registered i

or entitled to practive and practicing as such under the laws of the State of Washington, who, or each of whom. is in fact independent and does not have any intanst. direct or indirect, in any contract with the System other than his contract of employment to audit books of account of the System, and who is not connected with the System as an odicer or employee of the System..i copy of each audit report, annual balance shut and income and expense statement showing in reasonable detail the anancial condition of the WPPSS No.1 Project as of the close of each ascal year, and summarizing la nasonable detail the income and expenses for such year, including the transactions nlating to the Con.

struction Fund. the Revenue Fund. the Hanford Project Revenue Fund, the Bond Fund, the Fuel Fund and the Reserve and Contingency Fund and any and au special funds and accounts created in nspect of addl.

tional bonds issued pursuant to this Resolution. and the amounts ex.

pended for maintenance and for nnewals, replacements and gross capital additions to the properties of the WPPSS No.1 Project shall be 6d promptly with the Bond Fund Trustee and unt to any Bond.

holder 111ng with the System a written request for a copy thereof. Each such audit report shall state thenin that the auditor has examined and is familiar with the provisions of this Resolution and each resolution supplemental hereto nlating to the matters set forth above, and that as to such matters the System is in compliance therewith or, if not in compliance thenwith, the details of such failure to comply and the action to be taken by the System to be in compliance therewith.

Sterros 10.11. Cowdfing Engineer. The System wiu, as pre.

scribed in this Section, retain a nationauy recognized independent engi.

neer or enginuring 6tm on a continuous basis for the purpou of pro.

viding the System immediate and continuous enginuring counsel with respect to the WPPSS No.1 Project ithe consulting enginur or engl.

nuring Arm employed pursuant to this Section being referred to in this Resolution as the " Cons,lting Enginur"). The System wiu not employ the Consulting Enginur as Construction Enginur for the WPPSS No.1 Project, and will not, so long u any of the bonds issued pursuant to this Resolution are outstanding, now or hereaf ter employ Sees. t0.10 eed 10.tt

I l'

84 the Consulting Engineer in sny capacity in connection with the WPPSS No.1 Project except that of Consulting Engineer. Any Consulting i

Engineer employed pursuant to this section shall be selected with the r

special reference to his knowledge and experience in advising on the operntion of generating facilities and in the marketing of power there.

from. The System covenants and agrees that it will initially employ R. W. Beck and Associates as such Consulting Engineer for n period of l

four years from the date of the adoption of this Resolution, and'will thereafter renew such employment or may employ other Consulting i

L Engineers for three. year periods so long as any bonds issued pursuant to this Resolution are outstanding. In addition to the other duties of the Consulting Engineer pursuant to this Resolution, the Consulting

(

Engineers shall, not later than eighteen (18) months after the Date of.

Commercial Operation, and each thne (3) years therea.fter, make a physical examination of the WPPSS No.1 Project, and prepare a report I

based upon such examination and survey of the System's maaage=ent, j

operation and maintenance of the WPPSS No: 1 Project. Each such report shall be in sufeient detail to show whether the System, in oper.

ating the WPPSS No.1 Project. has satisfactorily performed and com.

plied with the covenants set forth in this Resolution with respect to the e5cient management of the properties of the WPPSS No.1 Project and its business, the su5ciency of the amounts bring charged and collected for services under the aquirements of this Resolution, the proper maintenance of the properties of the WPPSS No.1 Project, and the making of necessary repairs, renewals, replacements and improvements, and recommendations therefor. If the System in any =aterial way shall have failed to perform or comply with the covenants and agree.

ments contained in this Resolution, such report shall specify the details of such failun. In the making of such report, the Consulting Engineer shall accept the audit report of the independent certided public account.

ants refernd to in Section 10.10 hereof. Copies of each such report shall be placed on die with the Bond Fund Trustee and with the System at its oSes in Richland, Washington, and shall be sent to any Bond.

holder Sling with the System a written request for a copy thereof.

The Consulting Engineer shall pass upon the economic soundness and feasibility of any contemplated renewals, replacements, additions, betterments and improvements to and extensions of the WPPSS No.1 Project involving the expenditun of 5500.000 or more, and he shall embody his indings in a certideate to be died with the Bond Fund Trustee and the System. Sneh certideate shall specify the source frem Ses.10.11 1

-~

S5 wldeh funds are to be derived for such expemlitures and sha!! designate the expenditure as a renewal. replacement or espital addition.

In the event of any loss or damage to the properties of the WPPSS No.1 Project in excess of $~>00.000, whether or not covered bv insurance.

the Consulting Engineer shall ascertain the amount of such loss or ilama::e and shall issue and deliver to the System a certi6cate setting forth the amount and nature of such lors or damaze and recommends-tions as to whether or not the properties atiected by such loss or damage should be replaced. A copy of such certinente shall be filed with the Bond Fund Trustee and forwarded to any Bondholder who shall die with the System a written request therefor.

See :os 10.12. To 3Eake Economically Sound impros;ements and Extensions to the Project. The System will not expend any of the in-come. revenues receipts, protits and other moneys derived by it from the f

ownership or operation cf the WPPSS No.1 Project for any renewals, replacements. additions betterments and improvements to. and exten-sions of, the WPPSS No.1 Project which are not economically sound or which will not property and advantageously contribute to the conduct of the business of the WPPSS No.1 Project in an efficient and eco-nomical manner unless required to do so by or pursuant to law to permit the continued operation of the WPPSS No.1 Project.

Ste :os 10.13. To Pan Principal. Preminm and interest ol Bonds.

The System will duly and punctually pay or cause to be paid. but only from the revenues of the WPPSS No.1 Project and moneys pledged hereunder to the Bond Fund and money

pledged under each supple-mental resolution authorizing the issnance of additional bonds issued pursuant to this Resolution to the bond funds for such additional bonds, and from the proceeds of the sale or other disposition twhether volun-tary or involuntary) of properties of the WPPSS No.1 Project, the principal of and premium,if any, and interest on each and every bond issued pursuant to this Resolution on the dates and at the places and in the manner provided in said bonds and in the coupons thereto l

attached. according to the true intent and meaning thereof, and w-ill faithfully do and perform and fully observe and keep any and all cove-nants, undertakings, stipulations and provisions contained in said bonds and in the coupons thereto attached, and in this Resolution. any Series Resolution and each supplemental nsolution authorizing the issuance of additional bonds issued pursuant to this Resolution.

)

5 es.10.11,1o.12 and te.13

7

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86 l

Stenox 10.14. Payiny Agents. The System shall at all times maintain one or more otfices or apacies in the City of Seattle. Wash.

ington. in the City of Chicago, Illinois. and in the City of New York, New York. where Bonds and coupons may be presented for payment and where notices, demands and other documents may be served upon the System in respect of the Bonds and coupons or of this Resolution.

Stenos 10.13. Protection of Security. The System is dulv an.

thorized under all applicable law to create and issue the Bonds and to i

adopt this Resolution and to pledee the revenues and other moneys, i

securities and funds purported to be piedel by this Resolution in the manner and to the extent provided in this Resolution. The revenues i

and other moneys, securities and funds so pledged are and will be free and clear of any pledge lien. charge or encumbrance thereon or with,

l respect thereto prior to. or of equal rank with, the pledge created by l

this Resolution, except as otherwise expressely provided herein, and all corporate action on the part of the Syrtem to that end has been duly and validly take i. The bonds issued pursuant to this Resolation and the provisions of this Resolution and each resolution supplemental hereto are and will be valid and legally enforceable obligations of the System in accordance with their terms and the terms of this Resolation and each resolution supplemental hereto. The System shall at all times, to the extent permitted by law, defend. preserve and protect the p' edge of the reven.nes and other moneys. securities and funds pledged under this Resolution and each resolution supplemental hereto and all the rights of the Bondholders under this Resolution and each resolution supplemental hereto against all claims and demands of all persons whomsoever.

Szcrios 10.16. Authority ol System to Construct and Maintain l

the WPPSS No.1 Project. The System has good right and lawful power to construct, reconstruct. improve, maintain. operate and repair l

the WPPSS No.1 Project. and to tix, establish. maintain and collect rates and charges for WPPSS No.1 Project capability, electric power and energy and other services. facilities and commodities sold. fur-nished or supplied through the facilities of the WPPSS No.1 Project as provided is this Resolution.

Stenos 10.17. Payment of Ta:es, Assessments and Other Gov.

ernmental Charges and Payments in Lieu Thereof; Payment ol Claims.

The System will from time to time duly pay and lischarge, or cause to I

Sees.10.14,10.13,10.16 and 10.17 i

l t

ST be paid and discharged. all taxes. anessments and other governmental charges. or psytnents made in lieu thereof, lawfully imposed upon the propertica constituting the WPPSS No.1 Proicet or the revenues, income. receipts, protits and other moneys derived by the System therefrom when the same shall become due: and all lawful claim.* for labor and materiala and supplies which. if not paid. might become a lien or charge upon the said properties, or any part thereof, or upon the income, revenues, receipts, protits and other moneys derived by the System from the operation thereof, or which might in any way impair the security of the obligations issued by the System payable from said revenues, except those sasenments charges or claims which the System shallin good faith contest by proper legal proceedings.

Section 10.19. Taking Any Further Action Necessary. The S.rs.

tem will at any and all times. insofar as it may be authorized so to do by law, pass, make. do. exeente, acknowledge and deliver all and every such further resolutions act. deeds. con'veyinces, assignments. trans.

fers and assurances as may be necessary or desirable for the better assuring, conveying, granting, assigning and conarming all and singu.

lar the rights. revenues and other funds hereby pledged or assigned to the paytnent of the obligations issued by the System payable from the revenues of the WPPSS No.1 Project. including the Bonds and appurtenant coupons, or intended so to be, or which the Srstem may hereafter become bound to pledge or assign.

Secmox 10.19. Arbitrage Bond Prorision. The System will make no use of the proceeds of the sale of any issue of bonds issued pursuant i

to this Resolution which. if such use had been reasonably expected on the date of issue of such bonds, would have caused such bonds to be

" arbitrage bonds", as denned in subsection (d)(2) of Section 103 of the I.S. Internal Revenue Code of 1954, subject to treatment under subsection (d)(1) of said Section 103. The System shall comply with the requirements of subsection id) of Section 103 of said Internal Revenue Code and the applicable regulations of the Internal Revenue Service adopted thereunder, throughout the term of such bonds.

ARTICLE 3:I Scyrr.ntrm Rasor.t noxs Szcnos 11.1. Adoption of Supplemental Resolutions and Pur.

poses Thereof. The System may adopt at any time and from time to Sees.10.17,1o.18.10.19 and II.1 e

,_e..

SS time a resolution or resolutions supplemental to this Resolution for any one or more of the following purposes, and any such supplemental resolution shall become e&ctive in accordance with its terms upon the Sling with the Bond Fund Trustee of a certined copy thereof and the opinion of counsel for the Sy> tem that such supplemental resolution has been duly adopted and the provisions theteof are valid.tnd binding upon the System to-wit:

(1) To provide for the issuaneo of an additional Series or Series of Bonds pursuant to Section 4.4 hereof and to prescribe the terms and conditions pursuant to which such bonds may be issued. paid or redeemed; (2) To provide for the issuance of additional bonds pursuant to Section 10.7 hereof, and to prescribe the terms and conditions pursuant to which such bonds may be issued. paid or redeemed:

(3) To add additional covenants and agreements of the System for the purpose of further securing the payment of bonds issued pursuant to this Resolution, provided such additional covenunts and agreements are not contrary to or inconsistent with the cove-

~

nants and agreements of the System contained in this Resolution; (4) To prescribe further limitations and restrictions upon the issuance of bonds and the incurring of indebtedness by the System payable from the revenues of the WPPSS No.1 Project which are not contrary to or inconsistent with the limitations and restrictions thereon theretofore in efect; (5) To surrender any right. power or privilege reserved to or conferred upon the System or the terms of this Resolution:

(6) To conarm as further assurance any pledge under and the subjection to any tien, claim or pledge created or to be created by the provisions of this Resolution of the revenues of the WPPSS No.1 Project or of any other moneys. securities or funds:

(7) To modify any of the provisions of this Resolution in any other respects: provided that such mmli:ication shall not be etYective until after the bonds theretofore issued pursuant to this Resolution shall cease to be outstanding, and any bonds issued under such itsolution shall contain a specide referenes to the modi.

Heations containe.1 in such subsequent resolutions; or See.11.1

89 (S) With the consent of the Bond Fund Trustee, to cure any ambiguity or defect or inconsistent provision in this Resolution or to insert such provisions clarifying matters or questions arising i

under this Resolution as are necessary or desirable in the event any such modifientions are not contrary to or inconsistent with this Resolution as theretofore in efect.

Szertos 11.2. Supplemental Resolution 3fodifying Resolution Subject to Consent of Bondholders. The provisions of this Resolution maybe modined at any time or from time to titae by a resolution sup.

plemental hereto, subject to the consent of Bondholders in accordance with and subject to the provisions of Article XIII hereof such amend.

ment to become efective upon the dling with the Bond Fund Trustee of a certined copy thereof.

Sterios 11.3. Supplemental Resolution Afecting Trustees and Other Fiduciaries. No resolution changing, amending or modifying any of the rights or obligations of the Bond Fund Trustee, the Con-struction Fund Trustee or any other dduciary may be adopted by the System or be consented to by Bondholders without the written consent of such trustees or Educiaries. The Bond Fund Trustee or any other Educiary afected thereby is hereby authorized to accept the delivery of certifed copies of any resolution so amending the provisions of this Resolution and shall be fully protected in relying upon a certincation by the Secretary of the System that such resolution has been adopted in full compliance with the terms and provisions of this Resolution.

ARTICI.E XII Dzrats.rs axo Rntrotzs Sec=os 12.L Erests of Default. The Board hereby Ends and i

determines that the continuous operation of the WPPSS No.1 Project and the collection, deposit and disbursement of the revenues therefrom in the mmer provided in this Resolution and in any supplemental resolution authorizing the issuance of additional bonds pursuant to the provisions of Section 10J of this Resolution payable from the revences of the Project pari possu with the Bonds twhich additional bonds, together with the Bonds, are breinafter in this Article III and in Article XIII referred to collectively as the ~ Bonds") are es-l Sees.11.1.11.2.11.3 and 12.1

y r

90 sential to the pannent and security of the Bonds and the failure or refusal of the System to perform the covenants and obligations con-tained in this Resolution and any resolution supplemental hereto will endanger the necessary continuous operation of the WPPSS No.1 Project and the application of the revenues therefrom to the purposes set forth in this Resolution. The Resolution and each supplemental resolution adopted pursuant to Article XI hereof are hereinafterin this Article XII and in Article XIII referred to collectively as the "Resolu.

tion". The System further covenants and agrees with the purchasers and holders from time to time of the Bonds, in order to protect and safeguard the covenants and obligations undertaken by the System securing the Bonds. that if one or more of the following events (herein called ~ Event of Default") shall happen, that is to say:

(1) The S.vstem shall default in the performance of any ob-ligstions with respect to pannents into the Revenue Fund:

(2) Default shall be made in the due and punctual payment of the principal and premium, if any, on any of the Bonds when the same shall become due and payable. either at maturity or by proceedings for redemption or otherwise; (3) Default shall be made in the due and punctual pannent of any installment of interest on any Bond or any sinking fund installment therefor when and as such installment of interest or sinking fund installment shall become due and payable, and such default shall continue for a period of thir:7 (30) days:

(4) The System shall default in the observance and per-formance of any other of the covenants. conditions and agreements on the part of the System contained in the Resolution and such default or defaults shall have continued for a period of ninety (90) days; (5) The System shall (except as herein permitted) sell, trans-fer, assign or convey any properties constituting the WPPSS No.1 Project or interests therein, or any part or parts thereof. or shall malre any agreement for such sale or transfer (except as expressly authorized by Section 10.S hereof) or shall voluntarily forfeit or i

allow any of the leases, licenses, franchises. permits, approvals, privileges, easements or rights of way necessary or desirable in the operation of the WPPdS No.1 Project to lapse or terminate prior to the expiration date thereof by neglect or default; h 12.1 i

1

9

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91 (G) An order, judgment or decree shall be entered by any court of competent jurisdiction (a) appointing a receiver, trustee or liquidator for the System or the whole or any substantial part of the WPPSS No.1 Project, (b) approving a petition filed against the System under the provisions of Chapter IX of an Act to Estab-lish a Uniform Svstem of Bankruptey Throughout the United States, Approved July 1,1598, as amended, (c) granting relief to the System under any amendment to said Bankruptcy Act which shall give relief substantially similar to that afforded by said Chapter IX, or (d) assuming custody or control of the Svstem or of the whole or any substantial part of the WPPSS No.1 Project under the provisions of any otherlaw for the relief or aid of debtors and such order, judgment or decree shall not be vaented or set aside or stayed (or,in case custody or controlis assumed by said order, such custody or control shall not be otherwise terminated), within sixty (60) days from the date of the entry of such order, judgment or decree; (7) The System shall (a) admit in writing its inability to pay its debts incurred in the ownership and operation of the WPPSS No.1 Project generally as they become due, (b) fue a petition in bankruptcy or seeking a composition of indebtedness. (c) consent to the appointment of a receiver of its creditors, (d) consent to the appointment of a receiver of the whole or any substantial part of the WPPSS No.1 Project, (e) Sie a petition or an answer seeking relief under any amendment to said Bankrupter Act which shall give relief substantially the same as that afforded by said Chapter II or (f) consent to the assumption by any court of competent jurisdiction under the provisions of any other law for the relief or aid of debtors of custody or control of the System or of the whole or any substantial part of the WPPSS No.1 Project; then. and in each and every such case, so long as such Event of Default shall not have been remedied, unless the principal of all the Bonds shall have already become due and payable, either the Bond Fund Trustee (by notice in writing to the System), or the holders of not less than 20% in principal amount of the Bonds then outstanding (by notice in j

writing to the System and the Bond Fund Trustee), may declare the pris.

eipal of all the Bonds then outstanding, and the interest accrued there.

on. to be due and payable immediately, and upon any such dee!aration the same shall become and be immediately due and payable, anythi.sg in See.12.1 l

(

l l

l 92 the Besolution or in any of the Bonds contained and to the contrary i

notwithstanding. The right of the Bond Fund Trustee or of the holders of not less than 207, in principal amount of the Bonds to make any such declaration as aforesaid, however, is subject to the condition that if, I

at any time after such declaration, but (i) before any judgment or decree for the pannent of moneys due shall have been obtained or i

entered and has been discharged, (ii) before possession and control of the business and properties of the WPPSS No.1 Project have been taken and are then held by the Bond Fund Trustee or the holders of Bonds pursuant to Section 12.3 and 12.4 hereof, and (iii) before the Bonds shall have matured by their terms, all overdue installments of interest upon the Bonds, together with the reasonable and proper.

(

charges, expenses and liabilities of the Bond Fund Trustee and the holders of Bonds and their respective agents and attorneys and all I

other sums then payable by the System under the Resolution (except the principal of, and interest acerned since the next preceding interest l

date on, the Bonds due and payable solely by virtue of such declara-tion) shall either be paid by or for the account of the System or provi-sions satisfactory to the Bond Fund Trustee shall be made for such payment, and all defaults under the Bonds or under the Resolution (other than the payment of principal and interest due and payable solely b: reason of such declaration) shall be made good or be secured to the satisfaction of the Bond Fund Trustee or provision deemed by the Bond Fund Trustee to be adequate shall be made therefor, then i

and in every such case the holders of a majority in principal amount of the Bonds then outstanding, by written notice to the System and to the i

Bond Fund Trustee, may rescind such declaration and annul such de-fault in its entirety, or, if the Bond Fund Trustee shall have acted without a direction from the holders of not less than a majority in principal amount of the Bonds outstanding at the time of such request, and if there shall not have been theretofore delivered to the Bond Fund Trustee written direction to the contrary by the holders of not less than a majority in principal amount of the Bonds then ontstanding, then any such declaration shall ipso facto be deemed to be rescinded and any such default and its consequences shall ipso facto be deemed to be annulled. but no such reseission and annulment shall extend to or affect any subsequent default or impair or exhaust any right or power consequent thereon.

s t:.t

i i

l 93 Szcuos 111 Books of the System Open to inspection. The System covenants that if an Event of Default shall have happened and shall not have been remedied. the books of record and account of the System and all other records relating to the WPPSS.Vo.1 i

Project shall at all times be subject to the inspection and use of the Bond Fand Trustee and any bondholders' committee representing the holders of at least 25'~c of the principal amount of Bohds outstamling and of their respective agents and attorneys. including the engineer or firm of engineers appointed pursuant to Section 113.

The System covenants that if an Event of Default shall happen and shall not have been remedied, the System will continue to account, as a trustee of an express trust, for all revenues and other moneys, securities and funds pledged under this Besolution.

Szcuos 1L3. Rights of Holders of Bonds Qon Default: Appli.

cation of Revenues. The System covenants that if an Event of Default shall happert and shall not hare been remedied, the System and the Construction Fund Trustee. upon demand of the Bond Fund Trustee, shall pay over to the Bond Fund Trustee (i) forthwith, all moneys.

securities and funds then held by the System and pledged under the Resolution, and all moneys. securities and funda then held by the Con.

struction Fund Trustee, and'(ii) as promptly as practicable after re.

ceipt thereof, all income, revenues, receipts and profits derived from the owt.ership and operation of the WPPSS No.1 Project (all such moneys in this Article being collectively called " Revenues").

During the continuance of an Event of Default. the Bevannes -e.

eeived by the Bond Fund Trustee, or by the Bondholders' Committee created as hereinafter provided, whether pursuant to the provisions of the preceding paragraph, or as the result of taking possession of the business and properties of the WPPSS No.1 Project.< hall be applied by the Bond Fund Trustee or Bondholders' Committee. as the case may be, first to the payment of the amounts required by this l

Resolution to be paid into the Hanford Project Revenue Fund estab.

lished pursuant to Besolution No.173, second to the payment of the reasonable and proper charges, expenses and liabilities paid or incurred by the Bond Fund Trustee or Bondholders' Committee, as the case may Sea.12.2 and 12.3 I

04 be (including the cost of securing the sernees of any engineer or dem of engineers selected by the Bomi Fund Trustee. or Bondholifers.

Committee, for the purpose of. rendering advice with respect to the operation, maintensnee, repair and replacement of the WPPSS No, i Project necessary to prevent any loss of Revenues, and with respect to the sudiciency of the rates and charges for power and eneruy solit. fur.

nished or supplied by the WPPSS No.1 Project). and thereafter to the payment of the reasonable and necessary cost of operativu. mainte.

nance repair and replacement of the WPPSS No.1 Project and the principal of and interest on the Bonds.

In the event that at any time the funds held by the Bond Fund l

Trustee and the Paying Agents for the Bonds shall be insudicient for the payment of the principal of aad premium, if any, and intere=t then l

due on the Bonds, such funds (other than funds held for the payment or redemptien of pr.rticular Bonds or coupons which have theretofore become due at maturity or by call for redemption) and all Revenues and other moneys received or collected for the benent or for the account of holdars of the Bonds by the Bond Fund Tru.stev shall be applied as folio vs:

(1) Unless the principal of all of the Bonds shall have become or have been declared due and payable, First, to the payment to the persons entitled dereto of all installments of interest then due in the order of the =aturity of L

such installments, earliest maturities drst, and, if de a=ount available shall not be su5eiet.; to pay in full any installment or installments of interest maturing on de same date. Sen to de pay.

ment thereof ratably, according to the amounts due thereon. to the persons entitled thereto, without any discrimination or preference; and Second, to the payment to the persons entitled thereto of the unpaid principal and premium. if any, of any Bonds which shall become due whether at maturity or by call for redemption. in the order of their due dates. earliest maturities drst, and if the amount available shall not be su5cient to pay in full all the Bonds due on any date, then to the payment thereof ratably, according to the amounts of principal and premium,if any, due on such date. to the persons entitled dereto, without any discriminanon or preference.

5.e.12.3

95 (2) If the principal of all of the Bonds shall have become or have been declared due and payable, to the payment of the principal and intenst then due and unpaid upon the Ponds without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of inter.

est, or of any Bond over any other Bonds, ratably, according to the amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or preferoce.

If and whenever all overdue installments of interest on all Bonds, together with the reasonable and proper charges, expenses and liabilities of the Bond Fund Trustee and the holders of Bonds, their respective agents and attorneys, and all other sums payable by the System under the Resolution including the principal and premium, if any, of and accrued unpaid interest on all Bonds which shall then be payable by declaration or otherwise, shall either be paid by or for the account of the System or provision satisfactory to the Bond Fund Trustee shall be made for such payment. and all defaults under the Resolution or the Bonds shall be made good or secured to the satisfaction of the Bond Fund Trustee or provision deemed by the Bond Fund Trustee to be adequate shall be made therefor, the Bond Fund Trustee shall pay over to the System all moneys, securities, funds and Revenues then remaining unexpended in the hand.i of the Bond Fund Trustee (except moneys, securities, funds or Revenues deposited or pledged with the Bond Fund Trustee), and thereupon the System and the Bond Fund Trustee shall be restored. respectively, to their former positions and rights under this Resolution. and all Revenues shall thereafter be applied as provided in Article G. No such payment over to the System by the Bond Fund Trustee or resumption of the application of Revenues as provided in Article G shall extend to or afect any subsequent default under the Resolution or impair any right consequent thereon.

Sxcs:cs 12.4. Suits by Bond Fund Trustee. If an Event of D. fault shall happen and shall not have been remedied, then and in every such case, the Bond Fund Trustee, whether in its own name or as trustee of an express trust, or as attorney in fact for the holders of all the Bonds and the coupons appurtenant thereto, or in any one or more of such espacities, by its agents and attorneys, shall be entitled and empowered to proceed forthwith to institute such suits, actions and proceedings at law or in equity for the collection of all sums due in I

Seas.12.3 and 12.4 l

i

I I

l l

=

i 96 cornection with the Bonds and to protect and enforce its rights and the rights of the holdera of the Bonds under the Resolution for the specific performance of any covenant herein contained, or in aid of the execution of any power herein granted, or for an accounting against l

the System as trustee of an express trust, or in the enforcetnent of any other legal or equitable right as the Bond Fund Trustee, being j

advised by counsel. shall deem most etTectual to enforce any of its rights, or to perform any of its duties under the Resolution. The Bond Fund Trustee shall be entitled and empowered either in its own name or as a trustee of an express trust, or as an attorney in fae l

for the holders of the Bonds and the coupons appartenant thereto, or 1

in any one or more of such capacities, to file such proof of debt, amend.

ment of proof af debt claim, petition or other docenent as may.be necessary or advisable in order to have the claims of the Bond Fund Trustee and of the holders of the Bonds and of the coupons appur.

tenant thereto allowed in any equity, receivership, insolvency, bank.

ruptcy, liquidation, readjustment. reorganization or other similar pro-ceedings relative to the System. For this purpose the Bond Fund Trustee is hereby irrevocably appointed the true and lawful attorney in fact of the respective holders of the Bonds and of the coupons ap.

partenant thereto (and the successive holders of the Bonds and of de coupons appurtenant thereto by taking and holding the same shall be t

conclusively deemed to have so appointed the Bond Fund Trustee) with authority to make and d!e in the respective names of de he:ders of the Bonds any such proof of debt, amendment of proof of debt, claim. petition or other docu=ent in any such proceedings, and to i

i receive payment of any sums becoming distributable on account thereof, and to execute any such other papers and documents and to do and per.

form any and all acts and dings for and on behalf of the holders of the Bonds and of, the coupons appartenant thereto as may be necessary or advisable in the opinion of the Bond Fund Trustee in order to have l

the respective claims of the Bond Fund Trustee and of the holders of the Bonds and of said coupons allowed in any such proceeding and to receive payment of and on account of such claims: provided. however, that nothing contained herein shall be deemed to give the Bond Fund Trustee any right to accept or consent to any plan of reorganization or compromise.or otherwise take any action of any character in an.v such proceeding to waive or change in any way any right of any holde:-

of Bonds or coupens appartenant thereto.

Sn 12.4

- - - -, - + - - - - - - - - "

- ^ - - -

~

7 97 All rights of action under the Resolution may be enforced by the Bond Fund Trustee without the possession of any of the Bonds or coupons or the production thereof on the trial or other proceedings.

The holders of not less than a majority in principal amount of the Bonds at the tirne outstanding, may direct the time, method and place of conducting any proceeding for any remedy available to the holders of Bonds or the Bond Fund Trustee, or exercising any trust or power conferred upon the Bond Fud Trustee. provided that the Bond Fund Trustee shall be provided with reasonable security and indemnity and i

shall have the right to decline to follow any such direction only (i) if the Bond Fund Trustee shall be advised by counsel that the action or proceeding so directed may not lawfully be taken; or (ii) if the Bond Fud Trustee in good faith shall determine that the action or proceeding so directed would involve the Bond Fund Trustee in per-sonal liability; or (iii) that the action or proceeding so directed would be unjustly prejudicial to the holders of Bonds not parties to such direction.

At any time after the occurrence of an Event of Default and prior to Ge curing of such Event of Default, whether or not the principal of and premium, if any, and interest accrued on all the outstanding Bonds shall have been declared immediately due and payable as a result of such Event of Default, the Bond Fund Trustee, as a matter of right against the System, without notice or demand, and without regards to the adequacy of the security for the Bonds, shall, to the extent permitted by law, be entitled to take possession and control of the business and properties of the WPPSS No.1 Project. Upon taking such possession, the Bond Fund Trustee shall operate and maintain the WPPSS No.1 Project, make any necessary repairs. renewals and replacements in respect thereof, prescribe rates and charges for WPPSS No.1 Project capability, power and energy sold, furnished or supplied through the facilities of the WPPSS No.1 Project, collect the gross revenues resulting from the operation of the WPPSS No.1 Project, and perform all of the agreements and covenants contained in all contracts which the System is at the time obligated to perform.

At any such time b Bond Fund Trustee shall be entitled to the ap-pointment of a receiver of the business and property of the WPPSS No.1 Project, of 6 moneys, securities and funds of the System pledged under the Besolution, and of the Bevenues, and of the income l

m i

I l

95 therefrom with all such powers as the court or courts making such appointment shall confer, including the power to perform and enfore, all contracts, to the same extent that the System shall then he entittel and obligated to do; providetl, however, that, notwithstandini the happening of an Event of Default, the rights, and obligations of the purchasers under the WPPSS No.1 Project Exchange Agreement, and the WPPSS No. L Project Net Billing Agreements not in default shall not be affected by such happening of an Event of Default. Not, withstanding the appointment of any receiver, the Bond Fund Truste, shall be entitled to retain possession and control of and to collect and receive income from any moneys, securities, funds and Revenues de.

posited or pledged with it under the Resolution or agreed or provided to be delivered to or deposited or pledged with it under the Resolution. -

The Bond Fund Trustee may without the happening of an Event of Default and. at the request of the holders of not less than a majority of the Bonds then outstanding and upon being furnished with reason.

able security and indemnity, shall take such steps and institute such suits, actions or proceclings in its own name, or as trustee. or in de name of the System. all as the Bond Fund Trustee may deem appro.

priate, for the protection and enforcement of the rights of the holders of Bonds and the coupons appurtenant thereto, to collect any amocats due and owing the System. or by injunction. mandamus. foreclosure ce other appropriate proceeding in law and in equity to obtain other ap.

propriate relief and may enforce the specide perfor=ance of a:7 covenant, agreement or condition contained in the Resolution, or in de Bonds, or in any contract to which de System is a party including de WPPSS No.1 Project Net Billing Agreements and de WPPSS No. L Project Exchange Agreements.

Szenos 12.5. Suits by individual Bondholders. Except as other.

wise specirleally provided in this section. no holder of any of the Bonds or coupons shall have any right to institute any suit. action or proceed.

ing at law or in equity for the enforcement of any provision of the Resolution or the execution of any trust under the Resolution or l

for any remedy under the Resolution, unless such holder shall have previously given to the Bond Fund Trustee written notice of the hap.

pening of an Event of Default. as provided in this Article. and de holders of at least 20'*e in principal amount of the Bonds then outstand.

ing shall have filed a written request with the Bond Fand Trustee, and s

12.6. 41:.s

99 snall have odered it reasonable opportunity, either to exercise the powers granted under this Resolution or to institute such action, suit or proceeding in its own name, and unless such bondholder shall have odered to the Bond Fund Trustee adequate security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby, and the Bond Fund Trustee for a period of sixtv Hio) days after the receipt by it of such notice, request and otYer of indemnity shall have refused to comply with such request t it being understood and intended that, except as above provided, no one or more holders of Bonds or coupons shall have any right in any manner whatever by his or their action to afect, disturb or prejudice the pledge created by the Resolution, or to enforce any right under the R. solution, except in compliance with the conditions precedent to the initiation of such litigs-tion as herein provided; and that all proceedings at law or in equity to enforce any provision of the Resolution shall be instituted, had and maintained in the manner provided in the Resolution and for the equal benefit of all holders of the outstanding Bonds and coupons.

In the event that the Bond Fund Trust.* shall have failed or refused to comply with the aforesaid request after having been odered such security and indemnity, the holders of not less than twenty per cent (20re) in principal amount of the Bonds then outstanding may call a meeting of the holders of Bonds for the purpose of electing a Bond-holders' Committee. Such meeting shall be called and proceedings thereat shall be conducted as provided for other meetings of Bond.

holders pursuant to Article XIII hereof. At such meeting the holders of not less than a majority of the principal amount of the Bonds must be present in person or by proxy in order to constitute a quorum for the transaction of business,less than a quorum, however. having power to adjourn from time to time without any other notice than the an-nouncement thereof at *he meeting. A quorum being present, at such meeting, the Bondholdets present in person or by proxy may, by a majority of the votes cast, elect one or more persons who may or may not be Bondholders to the Bondholders' Committee which shall act as trustee for all Bondholders. The Bondholders present in person or by proxy at said meeting, or at any adjourned meeting thereof, shall prescribe the manner in which the successors of the persons elected to the Bond-holders' Committee at such Bondholders' meeting shall be elected or appointed, and may prescribe rules and regulations governing the I

exercise by the Bondholders' Committee of the power conferred upon See.12.3

~.

v---

Y l

l 100 it herein, and may provide for the termination of the existence of the Bondholders' Committee elected by the Bondholders in the manner here.

in provided, and their successors, as a committee are hereby declared to be trustees for the holders of all the Bonds then outstanding, and are empowered to exercise in the name of the Bondholders' Committee as trustee, all the rights and powers conferred in this Article.M on the Bond Fund Trustee er any Bondholder.

Nothing in the Resolution or in the Bonds or in the coupons cen.

tained shall afect or impair the obligation of the System. which is abso, late and unconditional, to pay at the respective dates of maturity and places therein expressed the principal of and interest on the Bonds to _

the respective holders thereof, or afect or impair the rights of action.

which are also absolute and unconditional, of any holder to esforce S payment of his Bonds, or to reduce to judgment his claim against the System for the payment of the principal and interest on his Bonds, t

without reference to, or consent of, the Bond Fund Trus:ee or any other holder of Bonds.

Sremos 116. Remedies Granted in Resolution Not Exclusive. 50 remedy by the terms of this Resolution conferred upon or reserved to the Bond Fund Trustee or the holders of the Bonds is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under the Resolution or existing at !aw or in equity or by statute on or after the date of adoption of the Resolution.

Szer:ox 117. Waivers of Default. No delay or omissien of the Bond Fund Trustee or of any holder of Bonds to exercise any right or power erising upon the happening of an Event of Default shall impair any right or power or shall be construed to be a waiver of any such Event of Default or to be an acquiescence therein: and every power and remedy given by this Article to the Bond Fund Trustee or to the holders of Bonds may be exercised from time to time and as often as =ay be l

deemed expedient by the Bond Fund Trustee or by such holde:s.

Prior to a declaration accelerating the maturity of the Bonds as provided in Section 111, the holders of not less than 66%fe in principal amount of the Bonds at the time outstanding, or their attorneys in fact duly authorized, may on behalf of the holders of all of the Bonds waive See, t2.3.12.6 and 12.7

t i

101 any past default under the Resolution and its consequences, except a default in the payment of interest on or principal of or premium,if any.

O on any of the Bonds. No such waiver shall extend to any subsequent or

. i other default or impair any right consequent thereon.

e 8

Stenos 12.S. Waitier of Extension Lanes. The System will not at any time insist upon or plead. or in any manner whatsoever claim or take the benefit or advantage of any stay or extension law now or at any time hereafter in force which may stYect the covenants and agree.

ments centained in the Resolution, or in the Bonds, but all benetit or advantage of any such law or laws is hereby expressly waived by the System.

Stenos 12.9..Votice of Defardts. The Bond Fund Trustee shall within ninety (90) days after the occurrence of an Event of Default.

give to the Bondholders in the manner provided in Section 13.2 hereof, notice of all defaults known to the Bond Fund Trustee, unless defaults shall have been cured before the giving of such notice (the term "de-fault" or " defaults' for the purpose of this Section 12.9 being hereby dedned to be any Event or Events of Default specified in Section 12.1).

provided that, except in the case of default in the payment of principal of and premium,if any, and interest on any of the Bonds or in the pay.

ment of any sinking fund installment the Bond Fund Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors and/or responsible odicers, of the Bond Fund Trustee in good faith determines that the withholding of such notice is in the interests of the Bondholders.

ARTICLE IIII Astr.souns:s ssn Bososot.ctss' Mzznsas See:tos 13.1. Call of Bondholders' Reetings. The System. the Bond Fund Trustee or the holders of not less than twenty per cent (20Fe) in principal amount of the Bonds then outstanding may at any time call a meeting of the holders of the Bonds. Every such meeting shall be held at such place in the City of New York. State of New York.

or in the City of Chicago, State of Illinois, as may be specitled in the I

notice calling such meeting. Written notice of such meeting, stating f

Sees.12.7.12.3.12.9 and 13.1 i

-.-,--..--.-_y-

i

,o i

i I

l 102 the place and time of the meeting and in general terms the business l

to be submitted, shall be mailed to the Bondholders by the System, the Bond Fund Trastee or the Bondholders calling such meeting not less than thirty (30) nor more than sixty (GO) days before such meeting, and shall be published at least once a week for four (4) successive calendar weeks on any day of the week. the date of first publication to be not less than thirty (30) days nor more than sixtv 160) days preceding the meeting; provided, however, that the mailing of such notice shallin no case be a condition precedent to the validity of any action taken at any such meeting. Any meeting of Bondholders shall, however, be valid without notice if the holders of all Bonds then out.

standing are present in person or by proxy or if notice is waived before I

or within thirty (30) days after the meeting by those not so present.

Szertor 13.2..Votices to Bondhofders. Except as otherwise pro-vided in this Besolution, any provision in this Resolution for the = ail-ing of a notice or other paper to Bondholders shall be fully complied with if it is mailed postage prepaid (a) to each registered owmer of any of the Bonds then outstanding at his address. if any. appearin:;

upon the registry books of the System (b) to each owmer of any of such Bonds payable to bearer who sheIl have died with the System or the Bond Fund Trustee an address for notices and (c) to the Bond Fund Trustee. Any provision in this Resolution contained for publi-estion of a notice or other matter shall require the publiention thereof in The Daily Bond Bayer in the City of New York. State of New York (or in lien of publiention in The Daily Bond Buyer in a daily news-paper printed in the English language and customarily published on each business day and of general circulation in the Borough of Man-hattan, the City of New York State of New York). and also in a daily newspaper printed in the English language and customarily published on each business day of general circulation in each of the Cities of Seattle, Washington, and Chicago, Elinois. If, beenuse of the temporary l

or permanent suspension of the publication or general circulation of any f!nancial paper or newspaper in any particular city, the System deems it impostible to publish any such notice in such city in the man-ner herein provided, then there shall be made in lieu thereof such pub-IIcation as shall be decided upon by the System, and the same shall i

constitute a sufficient publication of such notice.

Somn.13.1 and 13.2

~..

103 Snc=os 13.3. Prozies; Proof cf Ownership of Bonds, Execution of lastnanents by Bondholders. Attendance and voting by Bond.

holders at such meetings may be in person or by proxy. Owners of Registered Bonds or Coupon Bonds registered as to rincipal, may, by an instrument in writing under their hands. appoint any person or persons, with full power of substitution, as their proxy to vote at any meeting for them.

In order that holders of Bonds payable to bearer and their proxies may attend and vote without producing their Bonds, the Bond Fund Trustee may make and from time to time vary such regulations as it shall think proper for the deposit of Bonds with or exhibit of Bonds to any bank. bankers or trust companies, wherever situated, and for the issue by them to the persons depositing or exhibiting such Bonds.

of certife.stes in form approved by the Bond Fund Trustee whteh shan constitute proof of ownership entitling the holders thereof to be present and vote at any such meeting in the same way as if the persons so present and voting, either personally or by proxy, were the actual bearers of the Bonds in respect of which such certi6estes shall have been issued and any regulations so made shall be binding and effective.

Copies of such regulations shall be kept on Sie by the Bond Fund Trus-tee and Paying Agents. Oficers or nominees of the System. and odieers or nominees of the Bond Fund Trustee may be present or represented at such meeting and take part therein, but shall not be entitled to vote thereat, except as such odicers or nominees are Bondholders or proxies for Bondholders (including the Bond Fund Trustee).

Any registered owner of Bonds and any holders of a certidente provided for in this section shall be entitled in person or by proxy to attend and vote at such meeting as holder of the Bonds registered or certided in his name without producing such Bonds (unless the Bonds described in such certidente shall be registered in the name of or be produced by some other person at such meeting), and such persons and their proxies shall.if required produce such proof of personalidentiry as shall be satisfactory to the Secretary of the meeting. All proxies presented at such meeting shall be delivered to the Inspector of Votes and aled with the Secretary of the meeting. All other persons seeking to attend or vote in such meeting must produce the Bonds claimed to be owned or represented at sneh meeting.

s ts.2

104' t

The vote at any sitch meeting of the holder of any Bond entitled to vote thereat shall bo binding upon such holder and upon every sub.

sequent holder of such Bond (whether or not such eubspicut holder has notice thereof).

Any' request, direction. consent or other instrument in writine required or permitted by this Resolution to be i.med or excented by Bondholders may be in any number of concurrent instrunwnts of simi.

lar tenor and may be signed or executed by such Bondholders in person or by agent appointed by an instrument in writing. Proof of the exe.

curion of any such instrumeat shall be sudicient for any purpose of this Resolution. and shall be conclusive in favor of the Bond Faml Trustee with regard to any action taken by it under such instrument.

if made in the following manner: (1) the fact and date of the execution by any person of any such instrument may be proved by either (.D an acknowledgment executed by a notary public or other o5cer empowared to take acknowledgmente of deeds to be recorded in the particular juris.

diction. or (B) an adidavit of a witness to such execution trorn to before such a notary public or other oficer. Where such execution is by an odicer of a corporation or association or a member of a partner.

ship on behalf of such corporation, association or partnership. such acknowledgement or adidavit shall also constitute sudeient proof of his authority.

The foregoing shall not be construe <l as limiting the Bond Fund Trastee to such proof. it being intended that the Bond Fund Trustee may accept any other evidence of the matters herein stated wh:ch to it may seem sufeient. Any request of consent of the holder of any bond shallbind every future holder of the same bond in respect of any.

thing done by the Bond Fund Trustee in pursuance of such request.

direction or consent.

The right of a proxy for a Bondholder to act may be provad (sub.

ject to the Bond Fund Trustee's rieht to require additional proofi by a written proxy executed by sneh Bondholder as aforesaid.

Szcrtos 13.4. Appointment of Oficers at BondhoMers'.ileeting.

l Persons named by the Bond Fund Trustee, or elected by the holders of a majority in principal amount of the Bonds represented at the meeting in person or by proxy in the event the Bond Fund Trustee is not represented at such meeting, shall act as temporary Chairman and s

13.3 =a 13.4

l l

105 1

temporary Secretary of any meeting of Bondholders. A permanent Chairman and a permanent Secretary of such meeting shall be elected by the holders of a majority in principal amount of the Bonds repre-sented at such meeting in person or by proxy. The permanent Chair-man of the meeting shall appoint two (2) Inspectors of Votes who shall count all votes east at such meeting, except votes on the election of Chatrman and Secretary as aforesaid, and who shall make and n!e with the Secretary of the meeting and with the System and with the Bond Fund Trnstee their verided report of all such votes east at the meeting.

Szeitos 13.5. quorum at Bondholders' Meetiny. The holders of not less than the principal amount of the Bonds required for any action to be taken at such meeting must be present at such meeting in person or by proxy in order to constitute a quorum for the trans-action of business, less than a quorum, however, having power to adjourn from time to time without any other nottee than the announce-ment thereof at the meeting: provided. however, that if such meeting is adjourned by less than a quorum for more than ten (10) days. notice thereof shall be published by the System at least dve (5) days prior to the adjourned date of the meeting.

Sze:tos 13.6. Vote Required to.imend Resolution. Any amend-ment of the provisions of the Resolution in any particular except the percentage of Bondholders the approval of which is required to ap-prove such amendment, may be made by a supplemental resolution of the System and a resolution duly adopted by the adirmative vote at a meeting of Bondholders duly convened and held, or with written con-sent as hereinafter provided in Section 13.S hereof. (i) of the holders of not less than sixty.six and two-thirds per cent (e6%9) in principal amount of the Bonds outstanding when such meeting is held or such consent is given. (ii) of the holders of not less than sixty-six and two-thirds per cer.t (66%9) in principal amount of Bonds so outstanding which are adversely afected by any amendment which does not equally afect all other Bonds so outstanding. (iii) in case the amendment changes the amount or date of payment of any pannent into a special fund established for the pannent of any Bonds, of the holders of at least sixty. sis and two-thirds per cent (66%%) in principal amount of the Bonds of the particular series. maturity and interest rate entitled to such payment outstar. ding at the time such meeting is held or such consent is given, and (iv) in case the modideation or amendment Sees.13.4.13.3 and 13.4

f 106 changes the terms of any sinking fund installment, of the holders of at least sixty six and two thirds per cent (6G%fe) in principal amount of the Bonds of the particular series and maturit: entitled to such sinking fund installment and outstanding 2t the time such consent ;3 given; provided. however, that no such amendment shall permit a change in the date of payment of the principal of any Bonds or of ans.

instalhuent of interest thereon or a r duction in the principal or re'.

demption price thereof or the rate of interest thereon. without the con.

sent of the holder of each such Bond. or shall chana or modify any l

of the rights or obligations of the Construction Fund Trustee, the Boni Fund Trustee. or any Paying.\\ gent. without its written assent thereto.

Stenos 132. Obtaining.1pproval of.bnendment at Bondhold..

l ers' Jtecting. The.5ystem may at any time adopt a re solution amend.

(

ing the provisions of the Resolution to the extent that such amendment is permitted by the provisions of Section 13.6 hereof. to take e:icet when l

and as provided in this *cetion. I*pon the adoption of such resolution. a copy thereof certi:ied by the Secretary of the System. shall be n:ed with the Bond Fund Trustee. At any time thereafter such resolution may be submitted by th* System for approval to a meeting of the Bondholders duly conv*ned and hahl in accordance with the provisions of the Resolution. A record in duplicate of the procee.linz= of ach meeting of the Bondholders shall be prepared by the permanent S.c.

retary of the meeting and shall have attached thereto the original repor s of the Inspectors of Votes and atfidavits by a person or persons hadng knowledge of the facts. showing a copy of the notice of the meeting and setting forth the facts with respect to the maliing and publicatics thereof under the provisions of the Resolution. Such a record shall be signed and verified by the atridavits of the permanent Chairman and the permanent Secretary of the meetine. and one duplicate thereof shall be delivered to the System and the other to the Bond Fund L

Trustee for preservation by the Bond Fund Trustee. Any record so signed and verided shall ba proof of the matters therein stated. If *he resolution of the System making such amendment shall be approved by a resolution duly adopted at such meeting of Bondholders by the adirmative vote of the holder, of the reluired percentazes of Bonds, a notice stating that a resolution approdng such amendment has been so adopted and briedy aummarizing such amendment shall be mailed by the System to the Bondholders (but failure so to = ail l

Sees.13.6 and 13.7

)

t 107 1

copies of such resolution shall not affect the validity of such resolution)

, at and shall be published twice in the manner provided in Section 13.2 ant hereof, with an interval of not less than seven (7) days between such

.h publications, the first publication to be made not more than Afteen (15)

"8 days after the date of the adoption of such resolution. Proof of such mailing and publication by the affidavit or affidavits of a person or f'Y persons having knowledge of the facts shall be tiled with the Bond Fund Trustee. Such resolution of the System making such amendment shall be deemed conclusively to be binding upon the System, the Con.

struction Fund Trustee, the Bond Fund Trustee, the Paying Agents, and the holders of all Bonds and couponc pertaining thereto at the

~

expiration of thirty (30) days after the filing with the Bond Fund f,

Trustee of the proof of the first publication of the notice provided for t,

in this section. except in the event of a anal decree of a court of com.

t petent jurisdiction setting aside such resolution or annulling the action taken thereby in a legal action or equitable proceeding for such purpose 3

3 commenced within such period: provided that the Bond Fund Trustee, g

the Cor.struction Fund Trustee, any Paying Agents, and the System during such thirty (30) day perio I and any such further period during i

which such action or proceeding may be pending, shall be entitled in their absolute discretion to take such action. or to refrain from taking such action, with respect to such resolution as they may deem ex.

pedient..N'othing in the Resolution contained shall be deemed or construed to authorize or permit. by reason of any call of a meeting of Bondholders or of any right conferred hereunder to make such call, any hindrance or delay in the exercise of any rights conferred upon or reserved to the Construction Fund Trustee. the Bond Fund Trustee, the Paying Agents, or the Bondholders under any of the provisions of the Resolution.

Szcizos 13.S. Alternate Method of Obtaining Approval of Amendment. The System may at any time adopt a resolution amend.

ing the provisions of the Besolution. or of any Bonds, to the extent that such amendment is permitted by the provisions of this Article, to i

take erYect when and as provided in this section. Upon adoption of such resolution, a copy thereof, certided by the Secretary of the System, shall be delivered to and held by the Sond Fund Trustee for the in.

spection of the Bondholders..i copy of such resolution (or summary thereof in form approved by the Bond Fund Trustee) together with a i

Seen.13.7 and 13.8

^

108 request to Bondholders for their consent thereto in form satisfactory to the Bond Fund Trustee, shall be mailed by the System to Bond.

holders and notice thereof shall be published once in each calendar week for four (4) successive calendar weeks on any day of the week in the manner provided in Section 13.2 hereof ibut failure to mail copies of such resolution and request shall not arTect the validity of the resolution when consented to as in this section provided). Such resolution shall not be efective unless and until there shall have bee filed with the Bond Fund Trustee the written consents of the per.

I certages of holders of outstanding Bonds specided in Section 13.6 hereof and a notice shall have been published as hereinafter in this section provided. Each such consent shall be efective only if accom.

j panied by proof of ownership of the Bonds for which such consent is

~

given, which proof shall be such as is pertnitted by Section 13.3 hereof.

A certidente or certideates of the Bond Fund Trustee that it has ex.

j amined such proof and that such proof is sudicient shall be conclusive I

that the connats have been given by the holders of the Bonds described i

in such certineste or certideates. Any such consent shall be binding l

upon the holder of the Bonds giving such consent and on ev ry sub.i sequent holder of such Bonds (whether or not such subsequent holder has notice thereof) unless such consent is revoked in wri:ing by the 4

holder of such Bonds giving consent. or a subsequent holder, by iling such revocation with the Bond Fund Trustee prior to the date when the notice hereinafter in this section provided for is Srst published.

The fact that a consent has not been revoked may likewise be proved by a certidente of the Bond Fand Trustee. A notice, stating de sub.

stance of the resolution and stating that the resolution has been cou.

sented to by the holders of the required percentages of Bonds and will be efective as provided in this section, may be given to de Bondholders by mailing such notice to the Bondholders, and shall be given by pub.

lishing the same twice in the manner provided in Section 13.2 hereof, with an interval of not less than seven (7) days between such publi.

cations, the first publication to be made not = ore than fifteen i1~d davs after the holders of the required percentages of Bonds shall Esve died their consent to the resolution. The System shall die inth de Bond i

Fund Trustee proof of giving such notice. A record, consisung of de j

papers required by this section to be died with the Bond F:nd Trustee, shall be proof of the matters therein stated. and de resolution shall be deemed conclusively to be binding upon de System, the Construction 1

I i

l k

5.e.12.8 l

l l

t 1

_... -. - -. - - _, _ -,, _~

100 Fund Trustee. the Bond Fund Trustee the Paying Agents, and the holders of all Bonds and coupons at the expiration of thirty (30) days after the aling with the Bond Fund Trustee of the proof of the arst publication of the notice Inst provided for in this section. except in the event of a anal decree of a court of competent juristlietion *tting aside such consent or annulling the action taken thereby in a legal action or equitable proceeding for such purpose commenced within such period: provided that the Bond Fund Trustee, the Construction Fund Trustee. any Paying Agents. and the System during such thirty (30) day period and any such further period during which such action or proceeding may be pending, shall be entitled in their absolute dis.

eretion to take such action, or to refrain from taking such action, with respect to such resolution as they may deem expedient.

Sacnos 13.9. Amendment of Resolution in Any Respect By Ap.

proval of All Bondholders. Notwithstanding anything contained in the foregoing provisions of this Article. the rights and obligations of the System and of the holders of the Bonds and coupons pertaining thereto, and the terms and provisions of the Bonds and of the Resolu.

tion, may be amended in any respect with the consent of the System, by the a:!irmative vote of the holders of all said Bonds then outstand.

ing at a meeting of Bondholders called and held as hereinabove pro.

vided, or upon the adoption of a resolution by the System and the cou.

sent of the holders of all of the Bonds then outstanding, such consent to be given as provided in Section 13.3 except that no notice to Bond.

holders either by mailing or publiettion shall be required and the amendment shall be efective immediately upon such unanimous vote or written consent of all of the Bondholders.

Sec=os 13.10. E:clusion of Bonds Owned by System. Bonds omted or held by or for the account of the System shall not be deemed outstanding for the purpose of any vote or consent or other action or any calculation of outstanding Bonds in the Resolution provided for, and shall not be entitled to vote or consent or take any other action m the Resolution provided for.

Szer:os 13.11. Endorsement of Amendment on Bonds. Bonds delivered after the efective date of any action amending the Resolution taken as hereinabove provided may, and,if the Bond Fund Trustee so determines, shall, bear a notation by endorsement or otherwise in form Sees.13.3.13.9.13.10 and 13.11

110 approved by the System and the Bond Fund Trustee as to suel action, and in that case, upon demand of the holder of any Bond outstanding at such erYeetive date and presentation of his Bond for the purpose at the principal office of the Bond Fund Trustee, suitable notation shall be made on such Bond by the Bond Fund Trustee as to any such actinn.

If the System shall so detertnine, new Bonds so moditied as in the opinion of the System and its counsel to conform to such Bondhi>lders' action shall be prepared, delivered and upon demand of the holder of any Bond then outstanding shall be exchanged without cost to such Bondholder for Bonds then ontstanding hereunder, upon surrender of such Bonds with all unmatured coupons pertaining thereto.

ARTICLE IIV Foaxs or Boros Secrton 14.1. Forms of Bonds. The form of Coupon Bond. the form of interest coupons to be attached to the Coupon Bonds, the form of Provisions for Registration to appear on the Coupon Bonds, the form of Registered Bond, the form of assignment to appear on the Regi:tered Bonds, the form of endorsement of partial pay nent to appear on the Registered Bonds and the form of State Auditor's Cer.

tincate of Registration to appear on all the Bonds shall be in substan.

tially the following forms, respectively, with such modideations, addi.

tions and deletions as may be necessary or advisable to retfect the details of issuance of such Bonds, the provisions of this Resolution and the Series Resolution authorizing the same, or otherwise required or per.

mitted by the provisions of this Resolution or such Series Resolution:

(Form of Coupon Bond]

OITED STATES OF AMERICA STATE OF WASHINGTON i

l WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NO.1 REVENCE BOND, SERIES No.

53,000 WAsutxator Penue Pows: St rrt.r Srsitu, a mu.nicipal corpo-ration of the State of TTashington (hereinait called the System"),

for value received, hereby promises to pay to the bearer, or, if this Sean.13.11 and 14.t

111 bond be registered as to principal, to the registered owner henof, on the first day of

, the sum of Fin Thou.

sand Dollars ($5,000) and to pay interest on such principal sum from the date hereof at the rate of per centum ( 9) per annum, payable

, and semi annually thenafter on the first day of and the first day of in each year until the maturity of this bond, or,if default should be made in paytuent of the principal hereof when the same shall become due and payable, at the legal rate of interest until the payment in full of such principal sum, but,in the case of the interest due on or Iwfon maturity, only upon the presentation and surrender of the respective interest coupons repn-senting such intenst hereto attached, as they severally nature.

Principal of and interest and premium. if any, on this bond are payable solely out of the special fund of the System known as the

" Washington Public Power Supply System Nuclear Project No.1 Revenue Bond Fund" (hereinafter referred to as the " Bond Fund").

Payment of such principal, hitenst and premium will be made at the principal ofEce of

, is the City of Seattle, Washington, or, at the option of the holder hereof, or of such coupons, as the case inay be, at the principal office of

,in the City of Chicago, Blinois, or at the principal of5ce of

, in the City of New York, New York. as Paying Agents of the System, in such coin or eur.

nner of the United States of America which at the time of payment is legal tender for public and private debts.

This bond is one of a duly authorized series of Bonds of like des.

ignation henwith, aggngsting Dollars

($

) in principal amount. This bond and the bonds of the series of which it is one are issued under the authority of and in full compliance with the Constitution and statutes of the State of Washing.

ton, including Titles 43 and 54 of the Revised Code of Washington, and under and pursuant to Resolution No.

of the System adopted by the Board of Dinctors of the System on the day of 19 (hereinafter refernd to as the " Bond Resolution"), and a Series R4 solution, Resolution No.

, duly adopted by said Board on the day of

, 19 l-This bond and the series of which it is one constitute part of a duly authorind issue of bonds (hereinafter refernd to as the -Bonds")

issued, or to be issued, by the System under the Bond Resolution for I

See.14.1

112 the purpose of acquiring, by purchase or condemnation. and construct.

ing a nuclear electric generating plant and associated facilities as a separate utility system of the System constituting and to be knotyn as th* Wash:ngton Public Power Supply System Nuclear Project L. t Ihereinafter referred to as the " Project")-. The Bond Remlution per.

mit< the issuance of additional bonds, in addition to the Bond =. for certain limited purposes specirted therein, ranking on a parity with the Bonds and secured by an equal charge and lien on the revenues of the Project.

Copies of the Bond Resolution acd the Series Resolution are on tile at the principal o5ee of the System, at the principal o5ce of

, in the City of the Bond Fund Trustee, and at the principal ofee of each of the.

Paying Agents, and reference thereto and to any and all modiacations and amendments thereof is hereby made for a more complete descrip.

tion of the revenues available for the payment of the principal of and premium, if any, and interest on the Bonds and the rights and remedies of the holders of the Bonds trith respect thereto, the terms and con.

ditions upon which the Bonds have been and may be issued, and the i

terms and provisions upon which this Bond shall no ! cager be secured j

by the Bond Resolution or deemed to be outstanding thereunder if i

moneys or certain specided securities shall have been deposited with the Bond Fund Trustee or any Paying Agent therefor suscient and held in trust solely for the payment hereof.

l Under the Bond Resolution the System is obligated to set aside and pay into the Bond Fund out of the revenues of the Project. including all additions, betterments and improvements thereto and entensions there.

of, after first making all payments required to be :nade to the Hanford Project Revenue Fund created and established pursuant to Resolution No.173, adopted by the Board of Diretors of the S.estem on April 15, 1963 pursuant to the Bond Resolution. certain rbted amounts suficient to pay the principal of and interest and premium. if any, on all Bonds at any time outstanding as the same become due and payable, all as is more fully provided in the Bond Resolution. The Bond.s and the inter.

est thereon constitute the only charge against the Bend Fund and the amount of the revenues pledged to said Bond Fund.

In case an event of default (defined in the Bond Resolution) shall occur, the principal of the Bonds at such time outstanding may be declared due and payable by the Bond Fund Trustee or by the holders Sea.141

l 113 of 20'i, in principal amount of such Bonds, but such declaration may, under certain circumstances, be annulled.

In and by the Bond Resolution, the System covenants to establish, maintain and collect rates or charges for Prefect capability, electric energy and other services, facilities and commodities sold, furnished or supplied through the facilities of the Project which shall be fair and non.disertunnatory and adequate to provide revenues sudicient for the fixed amounts which the System is obligated to set aside in the Bond Fund to pay the principal of and interest and premium, if any, on this Bond and the issue of Bonds of which this Bond is a part, and for the proper operation and maintenance of the l'roject, and all necessary repairs thereto and nplacements and unewals thereof.

The Bonds of the series of Bonds of which this Bond is a part an subject to ademption prior to maturity, at the option of the System, on and after 1, 19

, as a whole at any time, or in part from time to time on any interest payment date in the inverse order of their maturities (and in the event that less than all of the Bonds of a maturity are called for redemption, the particular Bonds of such maturity to be redeemed shall be selected by lot), at the redemp-tion prices with respect to each Bond, expnssed as a percentage of the principal amount of the Bond to be redeemed. set forth below, together with the interest accrued thereon to the date fixed for redemption:

Period During Which Redeaned Redemption

< Both Dates Iselusivel Pnces provided,however, that the System further reserves the right to redeem the Bonds of the series of Bonds of which this Bond is a part maturing (a) on July 1,

, and on July 1,20

,in part on any interest pay-ment date on and after 1

, and on and after 1,

, respectively, but only upon payment of the principal amount thereof from the amounts credited to the Bond Retirement Account in the Bond Fund pursuant to paragraph C of Section 7.3 of the Bond Resolution, and (b) on 1,

, in part on any in-terest payment date on and after 1,

, but only upon pay.

ment of

% of the principal amount thereof from excess moneys available thenfor in the Bond Retirement Account in the Bond Fund See.14.1 1

l 114 t

resulting from the payments therein pursuant to Section 7.14 of the Bond Resolution, in each case together with interest acerned thereon i i

to the date fixed for redemption; and provided further, that the S,vstem further reserves the right to redeem all of the Bonds of the series of Bonds of which this Bond is a part, at its option. as a whol, at any time, or in part from time to time on any interest payment date in the inverse order of their maturities land in the event that less th all of the Bonds of a maturity are called for redemption, the particular Bonds of such maturity to be redeemed shall be selected by lot), from l'

moneys available therefor in the Bond Retirenzent.Lecount in the Bond Fund resulting from the payments therein pursuant to Section 10.3 of the Bond Resolution, or in the event the Project is terminated as provided in subparagraph (a) of Section 15 of the WPPSS No.1 Project Agreement referred to in the Bond Resolution, upon payment of the principal amount of the Bond to be redeemed, together with accrued interest thereon to the date ftzed for redemption.

In the event the System should exercise its option to redeem any of the Bonds, notice of such redemption shall be given by publication of a notice at least once in a daily rinancial paper, or in a daily news.

paper of general circulation printed in the English language, published in each of the cities of Seattle. Washington, Chic.rgo. Illinois, and New York, New York, such publication to be made in each case not less than thirty (30) nor more than sixty (60) davs prior to the date dxed for redemption. Notice of redemption having been given by publication as aforesaid, the Bonds so called for redemption shall on the date speci:ied in such notice become due and payable at the applicable redemption price herein provided, and from and after the date so fixed for redemption (unless the System shall defanit in the payment of the Bonds so called for redemption), interest on said Bonds so called for redemptio= shall cease to accrue.

This Bond may be registered as to principal only, in accordance with the provisions endorsed hereon, and this Bond and the interest coupons attached hereto shall have all the qualities and incidents of a negotiable instrument to the extent provided by Section 54.24.100 of the Revised Code of Washington.

I The Bonds of the series of Bonds of which this Bond is one are l

issnable as Coupon Bonds, registrable as to principal only in the denom.

inntion of $5,000, and as Registered Bonds without coupons in denom.

inations of $5,000 and any multiples of $5,000. The Coupon Bonds and 9

k i

115 Registered Bonds without coupons are interchangeable for an equal aggregate principal amount of Bonds of the same series, interest rate and maturity upon presentation thereof for such purpose by the holder or registered outer at the principal office of the Bond Fund Trustee, and upon payment of charges and otherwise as provided in the Bond Resolution.

It is hereby certified, recited and deetared that all acts, conditions and things required by the Constitution and statutes of the State of Washington to exist, to have happened and to have been performed precedent to and in the issuance of this Bond do exist. have happened and have been perfortued in due time, form and manner as prescribed by law, and that the amount of tids Bond, together with all other obliga.

tions or indebtedness of the System, does not exceed any constitutional or statutory limitations of indebtedness.

Is Wrrszas Waznzor, Washington Public Power Supply System, by its Board of Directors, has caused tids Bond to be executed in its name with the facsimile signature of the President of its Board of Directors, and attested by the manual signature of the Secretary of its Board of Directors or Treasurer of the system thereunto duly authorized, and the facsimile seal of said System to be hereon im-printed. and the interest coupons hereto attached to be executed by the facsimile signatures of the said President and Secretary, all as of the day of

, 19 WAsm:sorox Pcme Pows: Serrr.r SysTr.x By President Ar:zsT:

l Secretary (Treasurer)

(szaL) s tu 1

l

116 (ronx or corros]

.Yo-1 On the $rst day of

, unless the Bond hereinafter mentioned shall have been duly called for previous redemption and par.

ment of the redemption price duly made or provided for, Washingto'n Public Power Supply System, a municipal corporation of the State of Washington, will pay to bearer at the principal oSco of

, in the City of Seattle. Washington, or, at the option of the holder hereof, at the principal oEce of

,in the City of Chiesgo, Illinois, I,

or at the principal oSce of

, in the i

City of New York, New York, but solely out of the special fund appli.

emble to the payment thereof as provided in said Bond, the sum of I

Dollars ($

),in such l

coin or currency of the United States of America which at the time of payment is legni tender for public ant) private debts, being the interest then due on its Washington Public Power Supply System Nuclear Project No.1 Revenue Bond, Series

, dated

, 19 and numbered 1

President Secretary (roax or raortstoss roa azotstantos]

This Bond may be registered as to principal only in the name of the holder on books of registration to be kept at the principal oEce of the Bond Fund Trustee, such registration to be noted in the registra.

tion blank below. _Lfter such registration no transfer hereof shall be valid unlese made on said books and similarly noted hereon, but such registration may be made to bearer and thereupon transferability by Sea.14.1 1

4 I

s l

117 delivery shall be restored. The registration of this Bond as to principal only shall not niect the coupons which shall at all times be transferable merely by delivery.

(Notice: No writing on this bond except by Registrar)

Date of Narrie of Registration Redstered 0.ner signstureof Rectierse

[roax or uctsnus aoxo wrruot.T corrows]

UNITED STATES OF u1 ERICA STATE OF WASHINGTON WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECT NO.1 REVENCE BOND, SERIES No.R.

WAsutrorow Penue Pown Serrt.r Srsrnt, a municipal corpora-tion of the State of Washington (hereinafter called the -System"), for ralne received, hereby promises to pay to or registered assigns, on the arst day of

, the principal sum of Dollars (S

),

and to pay interest on the unpaid principal amount hereof, which inter-est shall be paid by check or draft drawn upon

,in the City of

,the Bond Fund Trustee, and mailed to the registered owner at his address as it appears on the bond registration books of the System, at the rate of per centum (

Te) per annum from the date hereof, payable semi annually on the arst day of and the arst day of of each year until the payment of such prin-s 14.1

i 11S cipal sum in full, or, if default should be made in the payment of the principal hereof when the same shall become due and payable at the legal rate of interest until the payment in full of such principal sum.

Principal of and interest and premium, if any, on this bond are payable solely out of the special fund of the System known as the

" Washington Public Power Supply System Nuclear Project No.1 Revenue Bond Fund" (hereinafter referred to as the " Bond Fund").

Payment of such principal and premium will be made at the prin.

cipal ofee of

, in the City of Seattle, Washington, or, at the option of the holder hereof, at the principal oEce of

,in the City of Chicago, Ulinois, or at the principal osce of in the City of New York, New York as Paying Agents of the System. in such coin or currency of the L~nited States of America which at the time of payment is legal tender for public and private debts.

l This bond is one of a duly authorized series of bonds of like desig.

nation herewith, aggregating Dollars is

).

in principal amount. This bond and the bonds of the series of which it is one are issued under the authority of and in full compliance with the Constitution and statutes of the State of Washington. including Titles 43 and 54 of the Revised Code of Washington, and under and pursuant to Resolution No.

of the System adopted by the Board of Directors of the System on the day of

, 19 (hereinafter referred to as the " Bond Resolution"), and a Series Resolution, Resolution No.

, duly adopted by said Board on the day of

, 19 This bond and the series of which it is one constitute part of a duly authorized issue of bonds (hereinafter referred to as the " Bonds")

issued, or to be h aued. by the System under the Bond Resolution for the l

purpose of acquiring, by purchase or condemnation. and constructing a nuclear electric generating plant and associated facilities as a separate utility system of the System constituting and to be knon as the " Wash.

ington Public Power Suppir System Nuclear Project No.1" (herein-after referred to as the " Project"). The Bond Resolution permits the issuance of additional bonds, in addition to the Bonds for certain limited purposes specided therein, ranking on a parity with the Bonds and secured by an equal charge and tien on the revenues of the Project.

Copies of the Bond Resolution and the Series Resolution are on die at the principal ofee of the System, at the principal odce of the s

14.1 L

l I

r H9 Bond Fund Trustee and at the principal omee of each of the Paying Agents, and reference thereto and to any and all modifientions and amendments thereof is hereby made for a more complete description of the revenues available for the payment of the principal of and pre-mium, if any, and interest on the Bonds and the rights and remedies of the holders of the Bonds with respect thereto, the tetTns and con-ditions upon which the Bonds have been and may be issued, and the terms and provisions upon which this Bond shall no longer be secured by the Bond Resolution or deemed to be outstanding thereunder if moneys or certain speciSed securities shall have been deposited with the Bond Fund Trustee or any Paying Agent therefor suscient and held in trust solely for the payment hereof.

Under the Bond Resolution the System is obligated to set aside and pay into the Bond Fund out of the revenues of the Project, includ.

ing all additions, betterments and improvements thereto and extensions thereof, after arst making all payments required to be made to the Hanford Project Revenue Fund created and established pursuant to Resolution h*o. ITS, adopted by the Board of Directors of the System on April 15, 1963, pursunt to the Bond Resolution. certain Axed amounts sudeient to pay the principal of and interest and premium.

if any, on all Bonds at any time outstanding as the same becomes due and payable, all as is more fully provided in the Bond Resolution. The Bonds and the interest thereon constitute the only charge against the Bond Fud and the amount of the revenues pledged to said Bond Fund.

In case an event of defanit (dedned in the Bond Resolution) shall occur, the principal of the Bonds at such time outstanding may be declared due and payable by the Bond Fund Trustee or by the holders of 20% in principal amount of such Bonds, but such declaration may, under certain circumstances,be annulled.

In and by the Bond Resolution, the System covenants to establish, maintain and colleet rates or charges for Project capability, electrie energy and other services, facilities and commodities sold, furnished j

or supplied through the facilities of the Project which shall be fair and l

non.diserumnatory and adequate to provide revenues su:ficient for the dxed amounts which the System is obligated to set aside in the Bond Fund to pay the principal of and interest and premium if any, on this Bond and the issue of Bonds of which this Bond is a part, and for the proper operation and maintenance of the Project, and all necessary repairs thereto and replacements and renewals therect Sea.14.1

7

'8 i

100 The Bonds of the series of Bonds of which this Bond is a part are subject to redemption prior to maturity, at the option of the S 6 tem T

on and after 1,19, as a whole at any time. or in part (rran time to time on any interest payment date in the inverse order of their maturities (and in the event that less than all of the Bonds of a ma.

turity are called for redemption, the particular Bonds of such maturity to be redeemed shall be selected by lot), at the redemption prices wi:ii respect to each Bond. expressed as a percentage of the principal amount of the Bond to be redeedued, set forth below. together with the interest accrued thereon to the date rised for redemption:

Period During Which Redeemed Redemption iBoth Dates Inchnes P-tees i

i l

1 l

provided.however that the System further reserves the right to redeem tne Bonds of the series of Bonds of which this Bomt is a part maturmg (a) on July 1.

, and on July 1. 00. in part on any intere=t payment date on and after 1,

, and on and after 1

respectively, but only upon payrnent of the principal amount therect from the amounts credited to the Bond Retirement Account in the Bond Fund pursuant to paragraph C of Section 7.3 of the Bond Reso-lution. and (b) on 1

, in part on any interest papuent date on and after 1

, but only upon payment of 9 of the principal amount thereof from excess moneys available therefor in the Bond Retirement Account in the Bond Fund reaulti::g from the payments therein pursuant to Section 7.14 of the Bond Resolution, in each esse together with the interest scerned thereon to the date fixed for redemptiont and provided further that the System further reseros the right to redeem all of the Bonds of the series of Bonds of which this Bond is a part, at its option, as a whole at any time, or in part from time to time on any interest payment date in the inverse order of their maturities (and in the event that less than all of the Bonds of a maturity are called for redemption, the particular Bonds of said maturity to be redeemed shall be selected by lot), from money = available therefor in the Bond Retirement Account in the Bond Fund resulting from the payments therein pursuant to Section 10.3 of the Bond Resolution, or See. t4.t

s.

121 in the event the Project is terminated as provided in subparagraph (a) of Section 15 of the WPPSS No.1 Project Agreement referred to in the Bond Resolution, upon payment of the principal amount of the Bond to be redeemed together with accrued interest thereon to the date fixed for redemption.

In the event the System should exercise its option to redeem any of the Bonds, notice of such redemption shall be given by publication of a notice at least once in a daily financial paper, or in a daily news.

paper of general circulation printed in the English language, published in each oi :he cities of Seattle, Washingcon, Chiesgo, Illinois, and New York, New York, such publication to be made in each case not less than thirty (30) nor more than sixty (60) days prior to the date fixed for redemption. Notice of redemption having been given by publication as aforesaid, the Bonds so enUed for redemption shall on the date specified in such notice become due and payable at the applicable redemption price herein provided, and from and after the date so fixed for redemp-tion (unless the System shall default in the payment of the Bonds so called for redemption), interest on said Bonds so called for redemption shall cease to accrue.

If this Bond be of a denomination in excess of $5,000, portions of the principal sum hereof in installments of $5,000 or any multiple there-of may be redeemed. and if less than all the principal sum hereof is to be redeemed, in such esse upon the surrender of this Bond at the principal o5ce of any one of the Paying agents there shall be issued to the registered owner hereof, without charge therefor, for the then unredeemed balance of the principal sum hereof, at the option of the owner, either Coupon Bonds or Registered Bonds of like series, ma.

turity and interest rate in any of the denominations authorized by the Bond Resolution.

4 This Bond shall have all the qualities and incidents of a nego-tiable instrument to the extent provided by Section 54.24.120 of the Revised Code of Washington, and shall be transferable by the regis.

tered owner at the principal ofee of the Bond Fund Trustee upon surrender and cancellation of this Bond, and thereupon a new Regis.

tered Bond without coupons of the same series, principal amount, interest rate and maturity will be issued to the transferee as provided in the Bond Resolution and upon payment.of the tran=fer charge,if any, i

therein prescribed. The System, the Paying Agents and any other person may treat the person in whose name this Bond is registered as See.14.1

P 122 the absolute ouer hereof for the purpose of receiving payment hereof and for n!! purposes and shall not be stYected by any notice to the contrary, whether this Bond be overdue or not.

The Bonds of the series of Bonds of wideh this Bond is one are issuable as Coupon Bonds, registrabb as to principal only, in the i

i denomination of 45.000, and as Registered BorHs without coupons in denominations of $5.000 and any multiples of $5,000. The Coupaa Bonds and the Registere.1 Bonds without coupons are interchangeable for an equal aggregate principal amount of Bonds of the same series, g,,

interest rate and maturity upon presentation thereof for such purpose 2

by the holder or recistered owner at the principt.1 ofiee of the Bond Fund Trustee, and upon pannent of charges and otherwise as provided l

in the Bond Resolution.

It is hereby certified. recited and declared that all acts, conditions and things required by the Constitution and statutes of the State of Washington to exist. to have happened and to have been performed precedent to and in the issuance of this Bond do exist. have happened and have been performed in due time. form and manner as prescribed by law, and that the amount of this Bond. together with all other obli.

j gations or indebtedness of the System. does not exceed any consti.

tutional or statutory limitations of indebtedness.

l l

Is Wr=rtss Warator, Washington Public Power Supply System.

~

by its Board of Directors, has caused this Bond to be executed in its name with the facsimile sienature of the President of its Board of Directors, and attested by 'the manual sienature of the Secretarr of its Board of Directors or Treasurer of the System thereunto duly authorized, and the facshnile seal of said System to be hereon imprinted, all as of i

WasazxoTox Pt st.re Powra Sent.T Srsmt By President A. Est:

Secretary (Treasurer)

[snt.1 i

See.14.1 1

I

F~

123 (romu or asamrxxzr]

For value received hereby sells, assigns and transfers unto the within mentioned Bond and hereby irrevocably constitutes and appoints Attorney, to transfer the same on the books of registration in the oeice of the Bond Registrar of the System with full power of substitution in the premises.

Dated-Witness:

NOTE: The signature to this assignment must correspond with the name as written on the face of the within Bond in every par.

ticular, without alteration, enlargement or any change what-soeYer.

[ronx rea troonavm or rammr rarxxx:]

Notation of Payments of Principal on the Within-mentioned Bond by Retirement of a Portion Thereof NO WRITING BELOW EXCEPT BT A PATING AGENT OR OTHER AUTHORIZED PERSON Siparureof Paries Principal Balanceof Principal Asent or other Dare Amount Psid Arnount Outstanding Authorized Person I

See.14.1 I

..__.-______y.._

y 1:

f k

n i.

i 124 (ronx or sun acorroa's czaTIrtcarz or azozs ma:Iox-Ar.:. som]

i Sun orWasurroTor 1

Orrres or Suzz Atmeros f as:

I Do Iizazar CzsTzrr that I have examined the within Bond and a certi8ed copy of the resolution authorizing the issuance thereof, and I

such additionalinformation with respect thereto as is required by :se, 6

and that the within Bond has been registered in my office in accordanes with the provisions of Section 54.20070 of the Revised Code of Washington.

I Ei Wmrzas myhand and seal of odice

, 19 t*

Auditor of the State of Washington By DeputyState A:ulitar ARTICLE W V - vroes: DernaAse Sze:1os 15.L Resolution and Laws a Contract with Bondholders.

This Resolution is adopted under the authority of and in full com.

pliance with the Constitution and laws of the State of Washington, including Titles 43 and 54 of the Revised Code of Washington, as amended and supplemented. In consideration of the purchase and ac.

ceptance of the Bonds by those who shall hold the same from time to time, the provisions of this Resolution and of any supplemental resolu.

tion authorizing the issuance of additlocal bonds issued pursuant to this Resolution, and of said laws shall constitute a contract with the holder or holders of each Bond and coupons attached thereto, and the obligations of the System and its Board of Directors under said laws and under this Resolution shall be enforceable by any court of compe.

tent jurisdiction; and the covenants and agreements herein set forth to be performed on behalf of the System shall be for the equal benedt.

protection and security of the holders of any and all of said Bonds and coupons thereto attached, all of which regsrdless of the time or times e

l See.13.1 f

I

1 I

o 125 of their issue or maturity, shall be of equal rank without preference, priority or distinction of any of said Bonds or coupons thereto attached over any others thereof except as expressly provided herein.

Sebrsos 15.2. Bonds.\\*o Longer Deemed Outstanding Hereunder.

c The obligations of the System under this Resolution (inehtding all 4

Series Resolutions and other resolutiona supplemental hereto or r,

amendatory hereof), and the liens, pledges, charges, trusts, assign.

.e ments, covenants and agreements of the System therein or herein made f

or provided for, shall be fully discharged and satisned as to any Bond and such Bond shall no longer be deemed to be outstanding there, under and hereunder, if such Bond shall have been cancelled. or sur.

rendered for cancellation, or when payment of the principal of and the applicable redemption premiums, if any, on such Bond plus interest thereon to the due date thereof, whether such due date be by reason of maturity or upon redemption or prepayment or by declaration as provided in Section 12.1 of this Resolution. or otherwise. (a) shall have been made or caused to be made in accordance with the terms thereof, or (b) shall have been provided by irrevocably depositing with the Bond Fund Trustee or the Paying Agenu for such Bond. in trust and irrevocably appropriated and set aside exclusively for such pannent.

(1) moneys suficient to make such pannent, or (2) Investment Securi.

ties s hich for the purpose of this Article shall mean only the obliga.

w tions mentioned in clauses 1. 2. 3 and 4 of paragraph (r) of Section 1.1 of this Resolution), which are not subject to redemption prior to maturity, and mature as to principal and interest in such amount and at such times as will insure the availability of suficient moneys to make such payment. or (3) a combination of such moneys and Invest.

=ent Securities, and such Bond shall cease to draw interest from the due date thereof (whether such due date be by reason of maturity or upon redemption or prepayment or by declaration as aforesaid, or otherwise) and except for the purposes of such pannent from such moneys or Investment Securities. shall no longer be secured by or en-titled to the benents of this Resolution: provided that, as to any de.

posit under ib) above all necessary and proper fees. compensation and expenses of the Bond Fund Trustee anil said Paying Agents pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of such Trustee and said Paring Agents; and provided further, that with Sees.151 and 15.2

t l

l 106 l

respect to Bonds which by their terms may be redeemed or otherwise l

prepaid prior to the stated maturities thereof, (A) no deposits under i

' (b) above shall constitute such discharge und satisfaction as aforesaid, I

(1) if such Bonds at the time of the making of such deposit are not then immediately redeemable or payable in accordance with the pro.

visions of this Resolution and of such Bonds (a) unless such Bonds shall have been irrevocably called or denignated for redemption or prepagnent on the first date thereafter on which such Bonds may be

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redeemed or prepaid in accordance with the provisions of this Rosola.

tion and of such Bonds or (b) until ninety (90) days prior to the respective stated maturities thereof. or (2) if such Bonds at the time of the making of such deposit are then immediately redeemable or i

payable in accordance with the provisions hereof or thereof, (a) until ninety (90) days prior to the date dxed for their redemption or pay.

ment or (b) until ninety (90) days prior to the respective stated =a.

turities thereof: and (B) as to al! Such Bonds to be redeemed or pre.

paid prior to their stated maturities, proper notice of such redemption or prepagnent shall have been irrevocably published in accordance with this Resolution or provision satisfactory to the Bond Fund Trustee shall have been irrevocably made for such publication. Any such moneys so deposited with the Bond Fund Trustee and the Panng Apats as provided in this section may at the direction of the System also be invested and reinvested in Investment Securities maturing in the amounts and times as hereinbefore set forth, and all income from allInvestment Securities in the hands of the Bond Fund Trustee and Paying Agents pursuant to this section which is not required for the payment of the Bonds and interest and premium thereon with respect to which such moneys shall have been so deposited, shall be paid to the Bond Fund Trustee and deposited in the Revenue Fund as and when realized and collected, for use and appliestion as other moneys de.

posited la that Fund.

If any Bond shall not be presented for paym2ent when the pris.

cipal thereof shall become due. whether at maturity or at the date dxed for the redemption thereof or upon declaration as provided in this Resolution, or otherwise, or if any coupon shall not be presented for t

payment at the due date therect, and if moneys or Investment Securi.

ties shall at such due date be held by the Bond Fund Trustee or a Paying Apnt therefor,in trust for that purpose suscient and av41able to pay the principal and the premium, if any, of such Bond, together l

See.I3.2 l

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O IM with all interest due thereon to the duc date thereof or to the date axed for h redemption thereof. or to pay such coupon as the case may be, all liability of the System for such payment shall forthwith j

eense, determine and be completely discharged, and breupon it shall be the duty of the Bond Fund Trustee or such Paying Agent, to hold said money or Investment Securities, without liability to such Bond-holder for intenst thereon, in trust for the benent of the holder of such Bond or of such coupon, as the case may be, who thereafter shall be nstricted exclusively to said moneys or Investment Securities for any claim of whatever nature on his part on or with nspect to said Bond or coupon, including for any einim for the payment thereof.

Notwithstanding any provision of any other section of this bso-lution which may be contrary to 6 provisions of this section, a!!

~

moneys or Inrestment Securities set asido and held in trust pursuant to the provisions of this section for the payment of Bonds (includine interest and premium thereon, if any) and coupons shall be applied to and used solely for the payment of 6 particular Bond (ineinding interest and pnmium thereof, if any) and coupons with respect to which such moneys and Investment Securities have been so set aside in trust.

Anything in this Resolution to the contrary notwithstanding, if moneys or Investment Securities have been deposited or set aside with the Bond Fund Trustee or a Paying Agent, pursuant to this section for the payment of Bonds and coupons and such Bonds shall be deemed to have been paid and be no longer outstanding hereunder as provided in this section, but such Bonds and coupons shall not have in fact been actually paid in f.dl, no amendment to the provisions of this section shall be made without the consent of b holder of each Bond or coupon afected thereby.

Ssc u os 15.3. Moneys or investment Securities Held by Bond Fund Trustee or Poying Agents Five Years After Due Date. Stoneys or Investment Securities held by the Bond Fund Trustee or the Paying Agents in trust for the payment and discharge of any of the Bonds or coupons which remain unclaimed for ave (5) years after 6 date when such Bonds shall have become due and payable, either at their stated maturity dates or by call for earlier ndemption, if such moneys or investmer.t securities, as the case may be, were held by such Paying Seas. ISJ and 13.3 i

f l

12S Agents at sceh dates five (5) years after the date of deposit of such moneys or investment securities, as the case may be. if deposited with the Paying Agents after the said date when such Bonds become due and payable, shall, at the written request of the System, be repaid by the Paying Agents to the System as the System's property and free from the trust created by this Resolution, and the Paying Agents shall thereupon be released and discharged with respect thereto, and the holders of the Bonds payable from such moneys or investment securi.

ties, as the case may be, shalllook only to the System for the payment of such Bonds and coupons.

Secrzos 15.4. Relation to WPPSS No.1 Project 4reement. The provisions of this Resolution are not intended to create, expand or confer any rights or obligations upoo the System with respect to the construction, operation and maintenar.co of the WPPSS No.1 Project which are inconsistent with the provisions of the WPPSS No.1 Project

.igreement, but in the event of any conflict the provisions of this Reso.

lation shall centrol.

Sce::os 15.5. Defnition of Bonds is Article.W.

In the event additional bonds are issued by the System payable from the revenues of the WPPSS No.1 Project pari passu with the Bonds. such additional bonds shall be considered Bonds within the meaning of such term as used in Sections 15.1.15.2, and 15.3 hereof.

Sncrtos 15.6. Term " System" includes Successors. Whenever in this Resolution the System is named or referred to,it shall be aeemed to include its successors and assigns, and all the covenants and agree.

ments in this Resolution contained by or on behalf of the System shall bind and inure to the, benent of its successors and assigns whether so expressed or not.

Szerzos 15J. Severability. If any one or more of the provisions of this Resolution shall be declared by any court of competent jurisdie.

tion to be contrary to law, then such provision (s) shall be deemed separable from, and shall in no way affect the validity of, any of the other provisions of this Besolution or of the bonds issued pursuant to this Besolution.

Sean.13.3.1S.4. IS.3. IS.4 and 1S.7 l

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9 13 SzcTrox 15.8. Efective Date. This Resolution shall be in effect

[

from and after its passage in accordance with law.

SzcTrox 15.9. Repealer. All resolutions and parts of resolutions in conflict herewith be and the same are hereby repealed to the extent of such confict.

se A. E. Fr.zicata President A=zsT:

s/ Eowts W. TArz.ca Secretary Approved as to Form:

s/ BrcxAmo Qctot.rr Ccumsel Sees. ISJ and 15.9 l

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ML20098C981

Text

3.1. Construe

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