Forty-fifth Supplemental Indenture



 Exhibit 4.3 
 CONFORMED COPY 
  
 AVISTA CORPORATION 
 TO 
 CITIBANK, N.A. 
 As Successor Trustee under 
 Mortgage and Deed of Trust, 
 dated as
of June 1, 1939 
  
  
 Forty-fifth Supplemental Indenture 
 Providing among other things for a series of bonds designated 
 “First Mortgage Bonds, Collateral Series 2008B”

 Due December 30, 2009 
  
  
 Dated as of December 1,
2008 
  
  







 FORTY-FIFTH SUPPLEMENTAL INDENTURE 
 THIS INDENTURE, dated as of the 1st day of December, 2008, between AVISTA CORPORATION
(formerly known as The Washington Water Power Company), a corporation of the State of Washington, whose post office address is 1411 East Mission Avenue, Spokane, Washington 99202 (the “Company”), and CITIBANK, N.A., formerly First National
City Bank (successor by merger to First National City Trust Company, formerly City Bank Farmers Trust Company), a national banking association incorporated and existing under the laws of the United States of America, whose post office address is 388
Greenwich Street, 14th Floor, New York, New York 10013 (the “Trustee”), as Trustee under the Mortgage and Deed of Trust, dated as of
June 1, 1939 (the “Original Mortgage”), executed and delivered by the Company to secure the payment of Bonds issued or to be issued under and in accordance with the provisions thereof, this indenture (the “Forty-fifth
Supplemental Indenture”) being supplemental to the Original Mortgage, as heretofore supplemented and amended. 
 WHEREAS pursuant to a
written request of the Company made in accordance with Section 103 of the Original Mortgage, Francis M. Pitt (then Individual Trustee under the Mortgage, as supplemented) ceased to be a trustee thereunder on July 23, 1969, and all of his
powers as Individual Trustee have devolved upon the Trustee and its successors alone; and 
 WHEREAS by the Original Mortgage the Company
covenanted that it would execute and deliver such further instruments and do such further acts as might be necessary or proper to carry out more effectually the purposes of the Original Mortgage and to make subject to the lien of the Original
Mortgage any property thereafter acquired intended to be subject to the lien thereof; and 
 WHEREAS the Company has heretofore executed and
delivered, in addition to the Original Mortgage, the indentures supplemental thereto, and has issued the series of Bonds, set forth in Exhibit A hereto (the Original Mortgage, as supplemented and amended by the First through Forty-fourth
Supplemental Indentures, being herein sometimes called the “Mortgage”); and 
 WHEREAS the Original Mortgage and the First
through Forty-second Supplemental Indentures have been appropriately filed or recorded in various official records in the States of Washington, Idaho, Montana and Oregon, as set forth in the First through Forty-third Supplemental Indentures and the
Instrument of Further Assurance, dated December 15, 2001, hereinafter referred to; and 
 WHEREAS the Forty-third Supplemental
Indenture, dated as of November 1, 2008 has been appropriately filed or recorded, or delivered for filing or recording, in the various official records in the States of Washington, Idaho, Montana and Oregon, information as to such filing and
recording to be set forth in a subsequent supplemental indenture; and 
 WHEREAS the Forty-fourth Supplemental Indenture, dated as of
December 1, 2008 is to be appropriately filed or recorded in the States of Washington, Idaho, Montana and Oregon; and 
  

 2 








 WHEREAS for the purpose of confirming or perfecting the lien of the Mortgage on certain of its
properties, the Company has heretofore executed and delivered a Short Form Mortgage and Security Agreement, in multiple counterparts dated as of various dates in 1992, and such instrument has been appropriately filed or recorded in the various
official records in the States of Montana and Oregon; and 
 WHEREAS for the purpose of confirming or perfecting the lien of the Mortgage on
certain of its properties, the Company has heretofore executed and delivered an Instrument of Further Assurance, dated as of December 15, 2001, and such instrument has been appropriately filed or recorded in the various official records in the
States of Washington, Idaho, Montana and Oregon; and 
 WHEREAS in addition to the property described in the Mortgage the Company has
acquired certain other property, rights and interests in property; and 
 WHEREAS Section 8 of the Original Mortgage provides that the
form of each series of Bonds (other than the First Series) issued thereunder and of the coupons to be attached to coupon Bonds of such series shall be established by Resolution of the Board of Directors of the Company; that the form of such series,
as established by said Board of Directors, shall specify the descriptive title of the Bonds and various other terms thereof; and that such series may also contain such provisions not inconsistent with the provisions of the Mortgage as the Board of
Directors may, in its discretion, cause to be inserted therein expressing or referring to the terms and conditions upon which such bonds are to be issued and/or secured under the Mortgage; and 
 WHEREAS Section 120 of the Original Mortgage provides, among other things, that any power, privilege or right expressly or impliedly reserved to or
in any way conferred upon the Company by any provision of the Mortgage, whether such power, privilege or right is in any way restricted or is unrestricted, may be in whole or in part waived or surrendered or subjected to any restriction if at the
time unrestricted or to additional restriction if already restricted, and the Company may enter into any further covenants, limitations or restrictions for the benefit of any one or more series of bonds issued thereunder, or the Company may cure any
ambiguity contained therein, or in any supplemental indenture, by an instrument in writing executed and acknowledged by the Company in such manner as would be necessary to entitle a conveyance of real estate to record in all of the states in which
any property at the time subject to the lien of the Mortgage shall be situated; and 
 WHEREAS the Company now desires to create a new series
of Bonds; and 
 WHEREAS the execution and delivery by the Company of this Forty-fifth Supplemental Indenture, and the terms of the Bonds of
the Forty-fifth Series, hereinafter referred to, have been duly authorized by the Board of Directors of the Company by appropriate Resolutions of said Board of Directors, and all things necessary to make this Forty-fifth Supplemental Indenture a
valid, binding and legal instrument have been performed; 
 NOW, THEREFORE, THIS INDENTURE WITNESSETH: That the Company, in consideration of
the premises and of other good and valuable consideration, the receipt and 

  

 3 








 
sufficiency whereof are hereby acknowledged, hereby confirms the estate, title and rights of the Trustee (including, without limitation, the lien of the
Mortgage on the property of the Company subjected thereto, whether now owned or hereafter acquired) held as security for the payment of both the principal of and interest and premium, if any, on the Bonds from time to time issued under the Mortgage
according to their tenor and effect and the performance of all the provisions of the Mortgage and of such Bonds, and, without limiting the generality of the foregoing, hereby confirms the grant, bargain, sale, release, conveyance, assignment,
transfer, mortgage, pledge, setting over and confirmation unto the Trustee, contained in the Mortgage, of all the following described properties of the Company, whether now owned or hereafter acquired, namely: 
 All of the property, real, personal and mixed, of every character and wheresoever situated (except any hereinafter or in the Mortgage
expressly excepted) which the Company now owns or, subject to the provisions of Section 87 of the Original Mortgage, may hereafter acquire prior to the satisfaction and discharge of the Mortgage, as fully and completely as if herein or in the
Mortgage specifically described, and including (without in anywise limiting or impairing by the enumeration of the same the scope and intent of the foregoing or of any general description contained in Mortgage) all lands, real estate, easements,
servitudes, rights of way and leasehold and other interests in real estate; all rights to the use or appropriation of water, flowage rights, water storage rights, flooding rights, and other rights in respect of or relating to water; all plants for
the generation of electricity, power houses, dams, dam sites, reservoirs, flumes, raceways, diversion works, head works, waterways, water works, water systems, gas plants, steam heat plants, hot water plants, ice or refrigeration plants, stations,
substations, offices, buildings and other works and structures and the equipment thereof and all improvements, extensions and additions thereto; all generators, machinery, engines, turbines, boilers, dynamos, transformers, motors, electric machines,
switchboards, regulators, meters, electrical and mechanical appliances, conduits, cables, pipes and mains; all lines and systems for the transmission and distribution of electric current, gas, steam heat or water for any purpose; all towers, mains,
pipes, poles, pole lines, conduits, cables, wires, switch racks, insulators, compressors, pumps, fittings, valves and connections; all motor vehicles and automobiles; all tools, implements, apparatus, furniture, stores, supplies and equipment; all
franchises (except the Company’s franchise to be a corporation), licenses, permits, rights, powers and privileges; and (except as hereinafter or in the Mortgage expressly excepted) all the right, title and interest of the Company in and to all
other property of any kind or nature. 
 TOGETHER WITH all and singular the tenements, hereditaments and appurtenances belonging or in
anywise appertaining to the aforesaid property or any part thereof, with the reversion and reversions, remainder and remainders and (subject to the provisions of Section 57 of the Original Mortgage) the tolls, rents, revenues, issues, earnings,
income, product and profits thereof, and all the estate, right, title and interest and claim whatsoever, at law as well as in equity, which the Company now has or may hereafter acquire in and to the aforesaid property and franchises and every part
and parcel thereof. 
  

 4 








 THE COMPANY HEREBY CONFIRMS that, subject to the provisions of Section 87 of the Original Mortgage,
all the property, rights, and franchises acquired by the Company after the date thereof (except any hereinbefore or hereinafter or in the Mortgage expressly excepted) are and shall be as fully embraced within the lien of the Mortgage as if such
property, rights and franchises had been owned by the Company at the date of the Original Mortgage and had been specifically described therein. 
 PROVIDED THAT the following were not and were not intended to be then or now or hereafter granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed under the Mortgage and were, are and
shall be expressly excepted from the lien and operation of the Mortgage namely: (l) cash, shares of stock and obligations (including bonds, notes and other securities) not hereafter specifically pledged, paid, deposited or delivered under the
Mortgage or covenanted so to be; (2) merchandise, equipment, materials or supplies held for the purpose of sale in the usual course of business or for consumption in the operation of any properties of the Company; (3) bills, notes and
accounts receivable, and all contracts, leases and operating agreements not specifically pledged under the Mortgage or covenanted so to be; (4) electric energy and other materials or products generated, manufactured, produced or purchased by
the Company for sale, distribution or use in the ordinary course of its business; and (5) any property heretofore released pursuant to any provisions of the Mortgage and not heretofore disposed of by the Company; provided, however, that the
property and rights expressly excepted from the lien and operation of the Mortgage in the above subdivisions (2) and (3) shall (to the extent permitted by law) cease to be so excepted in the event that the Trustee or a receiver or trustee
shall enter upon and take possession of the Mortgaged and Pledged Property in the manner provided in Article XII of the Original Mortgage by reason of the occurrence of a Completed Default as defined in said Article XII. 
 TO HAVE AND TO HOLD all such properties, real, personal and mixed, granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged,
pledged, set over or confirmed by the Company in the Mortgage as aforesaid, or intended so to be, unto the Trustee, and its successors, heirs and assigns forever. 
 IN TRUST NEVERTHELESS, for the same purposes and upon the same terms, trusts and conditions and subject to and with the same provisos and covenants as set forth in the Mortgage, this Forty-fifth Supplemental Indenture
being supplemental to the Mortgage. 
 AND IT IS HEREBY FURTHER CONFIRMED by the Company that all the terms, conditions, provisos, covenants
and provisions contained in the Mortgage shall affect and apply to the property in the Mortgage described and conveyed, and to the estates, rights, obligations and duties of the Company and the Trustee and the beneficiaries of the trust with respect
to said property, and to the Trustee and its successors in the trust, in the same manner and with the same effect as if the said property had been owned by the Company at the time of the execution of the Original Mortgage, and had been specifically
and at length described in and conveyed to said Trustee by the Original Mortgage as a part of the property therein stated to be conveyed. 
 The Company further covenants and agrees to and with the Trustee and its successor or successors in such trust under the Mortgage, as follows: 
  

 5 








 ARTICLE I 
 Forty-fifth Series of Bonds 
 SECTION 1. (I) There shall be a series of bonds designated
“Collateral Series 2008B” (herein sometimes referred to as the “Forty-fifth Series”), each of which shall also bear the descriptive title First Mortgage Bond, and the form thereof, which has been established by Resolution of the
Board of Directors of the Company, is set forth on Exhibit D hereto. Bonds of the Forty-fifth Series shall be issued as fully registered bonds in denominations of One Thousand Dollars and, at the option of the Company, any amount in excess thereof
(the exercise of such option to be evidenced by the execution and delivery thereof) and shall be dated as in Section 10 of the Mortgage provided. Each bond of the Forty-fifth Series shall mature on December 30, 2009 and shall bear
interest, be redeemable and have such other terms and provisions as set forth below. 
 (II) The Bonds of the Forty-fifth Series shall have
the following terms and characteristics: 
 (a) the Bonds of the Forty-fifth Series shall be initially authenticated and
delivered under the Mortgage in the aggregate principal amount of $17,000,000; 
 (b) the Bonds of the Forty-fifth Series
shall bear interest at the rate of eight per centum (8%) per annum; interest on such Bonds shall accrue from and including the date of the initial authentication and delivery thereof, except as otherwise provided in the form of Bond attached
hereto as Exhibit B; interest on such Bonds shall be payable on each Interest Payment Date and at Maturity (as each of such terms is hereinafter defined); and interest on such Bonds during any period less than one year for which payment is made
shall be computed in accordance with the Reimbursement Agreement (as hereinafter defined); 
 (c) the principal of and
premium, if any, and interest on each bond of the Forty-fifth Series payable at Maturity shall be payable upon presentation thereof at the office or agency of the Company in the Borough of Manhattan, The City of New York, in such coin or currency as
at the time of payment is legal tender for public and private debts. The interest on each Bond of the Forty-fifth Series (other than interest payable at Maturity) shall be payable directly to the registered owner thereof; 
 (d) the Bonds of the Forty-fifth Series shall not be redeemable, in whole or in part, at the option of the Company; 
 (e) (i) the Bonds of the Forty-fifth Series are to be issued and delivered to the Bank (as hereinafter defined) in order to provide the
benefit of the lien of the Mortgage as security for the obligation of the Company under the Reimbursement Agreement to pay the Obligations (as hereinafter defined), to the extent and subject to the limitations set forth in clauses (iii) and
(iv) of this subdivision; 
 (ii) upon the earliest of (A) the occurrence of an Event of Default under the
Reimbursement Agreement, and further upon the condition that, in accordance 

  

 6 








 
with the terms of the Reimbursement Agreement, the Obligations (as hereinafter defined) shall have been or shall have terminated and any Loans (as
hereinafter defined) outstanding shall have been declared to be or shall have otherwise become due and payable immediately and the Bank shall have delivered to the Company a notice demanding redemption of the Bonds of the Forty-fifth Series which
notice states that it is being delivered pursuant to Article VI of the Reimbursement Agreement; (B) the occurrence of an Event of Default under clause (h) of Article VI of the Reimbursement Agreement, and (C) December 30, 2009,
then all Bonds of the Forty-fifth Series shall be redeemed or paid immediately at the principal amount thereof plus accrued interest to the date of redemption or payment; 
 (iii) the obligation of the Company to pay the accrued interest on Bonds of the Forty-fifth Series on any Interest Payment Date prior to
Maturity (a) shall be deemed to have been satisfied and discharged in full in the event that all amounts then due in respect of the Obligations shall have been paid or (b) shall be deemed to remain unsatisfied in an amount equal to the
aggregate principal amount then due in respect of the Obligations and remaining unpaid (not in excess, however, of the amount otherwise then due in respect of interest on the Bonds of the Forty-fifth Series); 
 (iv) the obligation of the Company to pay the principal of and accrued interest on Bonds of the Forty-fifth Series at or after Maturity
(x) shall be deemed to have been satisfied and discharged in full in the event that all amounts then due in respect of the Obligations shall have been paid or (y) shall be deemed to remain unsatisfied in an amount equal to the aggregate
amount then due in respect of the Obligations and remaining unpaid (not in excess, however, of the amount otherwise then due in respect of principal of and accrued interest on the Bonds of the Forty-fifth Series). 
 (v) the Trustee shall be entitled to presume that the obligation of the Company to pay the principal of and interest on the Bonds of the
Forty-fifth Series as the same shall become due and payable shall have been fully satisfied and discharged unless and until it shall have received a written notice from the Bank, signed by an authorized officer thereof, stating that the principal of
and/or interest on the Bonds of the Forty-fifth Series has become due and payable and has not been fully paid, and specifying the amount of funds required to make such payment; 
 (f) no service charge shall be made for the registration of transfer or exchange of Bonds of the Forty-fifth Series; 
 (g) in the event of an application by the Bank for a substituted Bond of the Forty-fifth Series pursuant to Section 16 of the
Original Mortgage, the Bank shall not be required to provide any indemnity or pay any expenses or charges as contemplated in said Section 16; and 
 (h) the Bonds of the Forty-fifth Series shall have such other terms as are set forth in the form of bond attached hereto as Exhibit B. 
  

 7 








 Anything in this Supplemental Indenture or in the Bonds of the Forty-fifth Series to the contrary
notwithstanding, if, at the time of the Maturity of the Bonds of the Forty-fifth Series, the stated aggregate principal amount of such Bonds then Outstanding shall exceed the aggregate principal amount of the Revenue Bonds (as hereinafter defined)
then outstanding, the aggregate principal amount of such Bonds shall be deemed to have been reduced by the amount of such excess. 
 (III)
For all purposes of this Article I, except as otherwise expressly provided or unless the context otherwise requires, the terms defined below shall have the meanings specified: 
 “Bank” means Bank of America, N.A. 
 “Bond Delivery Agreement” means the Bond Delivery Agreement, dated December 30, 2008 between the Company and the
Bank. 
 “Interest Payment Date” means March 31, June 30, September 30, and
December 30. 
 “Maturity” means the date on which the principal of the Bonds of the Forty-fifth Series
becomes due and payable, whether at stated maturity, upon redemption or acceleration or otherwise. 
 “Obligations” shall have the meaning specified in the Bond Delivery Agreement. 
 “Reimbursement Agreement” means the Letter of Credit and Reimbursement Agreement, dated as of December 1, 2008, between the Company and the Bank. 
 “Revenue Bonds” shall have the meaning specified in the Bond Delivery Agreement. 
 A copy of the Reimbursement Agreement is on file at the office of the Bank at Mail Code: WA1-501-36-06, 800 Fifth Avenue – Floor 36, Seattle, WA,
98104 and at the office of the Company at 1411 East Mission Avenue, Spokane, WA 99202. 
 ARTICLE II 
 Outstanding Bonds 
 Upon the delivery
of this Forty-fifth Supplemental Indenture, Bonds of the Forty-fifth Series in an aggregate principal amount not to exceed $17,000,000 are to be issued and will be Outstanding, in addition to $1,421,700,000 aggregate principal amount of bonds of
prior series Outstanding at the date of delivery of this Forty-fifth Supplemental Indenture. 
  

 8 








 ARTICLE III 
 Miscellaneous Provisions 
 SECTION 1. The terms defined in the Original Mortgage shall, for all
purposes of this Forty-fifth Supplemental Indenture, have the meanings specified in the Original Mortgage. 
 SECTION 2. The Trustee hereby
confirms its acceptance of the trusts in the Original Mortgage declared, provided, created or supplemented and agrees to perform the same upon the terms and conditions in the Original Mortgage set forth, including the following: 
 The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Forty-fifth Supplemental Indenture
or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. Each and every term and condition contained in Article XVI of the Original Mortgage, shall apply to and form part of this Forty-fifth
Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and insertions, if any, as may be appropriate to make the same conform to the provisions of this Forty-fifth
Supplemental Indenture. 
 SECTION 3. Whenever in this Forty-fifth Supplemental Indenture either of the parties hereto is named or referred
to, this shall, subject to the provisions of Articles XV and XVI of the Original Mortgage be deemed to include the successors and assigns of such party, and all the covenants and agreements in this Forty-fifth Supplemental Indenture contained by or
on behalf of the Company, or by or on behalf of the Trustee, or either of them, shall, subject as aforesaid, bind and inure to the respective benefits of the respective successors and assigns of such parties, whether so expressed or not. 

SECTION 4. Nothing in this Forty-fifth Supplemental Indenture, expressed or implied, is intended, or shall be construed, to confer upon, or to give
to, any person, firm or corporation, other than the parties hereto and the holders of the bonds and coupons Outstanding under the Mortgage, any right, remedy or claim under or by reason of this Forty-fifth Supplemental Indenture or any covenant,
condition, stipulation, promise or agreement hereof, and all the covenants, conditions, stipulations, promises and agreements in this Forty-fifth Supplemental Indenture contained by or on behalf of the Company shall be for the sole and exclusive
benefit of the parties hereto, and of the holders of the bonds and of the coupons Outstanding under the Mortgage. 
 SECTION 5. This
Forty-fifth Supplemental Indenture shall be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 
 SECTION 6. The titles of the several Articles of this Forty-fifth Supplemental Indenture shall not be deemed to be any part thereof. 
  
  
  

 9 








 IN WITNESS WHEREOF, on the 30th day of December, 2008, AVISTA CORPORATION has caused its corporate name
to be hereunto affixed, and this instrument to be signed and sealed by its President or one of its Vice Presidents, and its corporate seal to be attested by its Corporate Secretary or one of its Assistant Corporate Secretaries for and in its behalf,
all in The City of Spokane, Washington, as of the day and year first above written; and on the 22nd day of December, 2008, CITIBANK, N.A., has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by its
President or one of its Vice Presidents or one of its Senior Trust Officers or one of its Trust Officers and its corporate seal to be attested by one of its Vice Presidents or one of its Trust Officers, all in The City of New York, New York, as of
the day and year first above written. 
  

			
	AVISTA CORPORATION
		
	By:	 	 /s/ Ann M. Wilson

		 	Ann M. Wilson
		 	Vice President & Treasurer


  

	
	Attest:
	
	 /s/ Susan Y. Miner

	Susan Y. Miner
	Assistant Corporate Secretary
	
	 Executed, sealed and delivered
by AVISTA CORPORATION
in the presence of:

	
	 /s/ Diane C. Thoren

	Diane C. Thoren
	Assistant Treasurer
	
	 /s/ Paul W. Kimball

	Paul W. Kimball

  

 10 









			
	CITIBANK, N.A., AS TRUSTEE
		
	By:	 	 /s/ Wafaa Orfy

		 	Wafaa Orfy
		 	Vice President


  

			
	Attest:	 	
		
		 	 /s/ John Hannon

	Name:	 	John Hannon
	Title:	 	Vice President
	
	 Executed, sealed and delivered
by CITIBANK, N.A.,
as trustee. in the presence of:

		
		 	 /s/ Marion O’Connor

	Name:	 	Marion O’Connor
		
		 	 /s/ Kristen Driscoll

	Name:	 	Kristen Driscoll

  

 11 









					
	STATE OF WASHINGTON	  	  )	  	
		  	  ) ss.:	  	
	COUNTY OF SPOKANE	  	  )	  	

 On the 30th day of December, 2008, before me personally appeared Ann M. Wilson, to me known to be a Vice President of AVISTA CORPORATION, one of the corporations that
executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said Corporation for the uses and purposes therein mentioned and on oath stated that he was authorized to execute said
instrument and that the seal affixed is the corporate seal of said Corporation. 
 On
the 30th day of December, 2008, before me, a Notary Public in and for the State and County aforesaid, personally appeared Ann M. Wilson, known to me
to be a Vice President of AVISTA CORPORATION, one of the corporations that executed the within and foregoing instrument and acknowledged to me that such Corporation executed the same. 
 IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written. 
  

	
	 /s/ Anita L. Swanson

	Notary Public
	
	Anita L. Swanson
	Notary Public
	State of Washington
	Commission Expires June 17, 2009


  

 12 









					
	STATE OF NEW YORK	  	  )	  	
		  	  ) ss.:	  	
	COUNTY OF NEW YORK	  	  )	  	

 On the 22nd day of December, 2008, before me personally appeared Wafaa Orfy, to me known to be a
Vice President of CITIBANK, N.A., one of the corporations that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said Corporation for the uses and purposes therein mentioned
and on oath stated that he was authorized to execute said instrument and that the seal affixed is the corporate seal of said Corporation. 
 On the 22nd day of December, 2008, before me, a Notary Public in and for the State and County aforesaid, personally appeared Wafaa Orfy, known to me to be an Vice President of CITIBANK, N.A., one of the corporations that
executed the within and foregoing instrument and acknowledged to me that such Corporation executed the same. 
 IN WITNESS WHEREOF, I have
hereunto set my hand and affixed my official seal the day and year first above written. 
  

	
	 /s/ Zenaida Santiago

	Notary Public
	
	Zenaida Santiago
	Notary Public – State of New York
	No. 01SA6152564
	Qualified in Kings County
	My Commission Expires September 18, 2010


  

 13 








 EXHIBIT A 
 MORTGAGE, SUPPLEMENTAL INDENTURES 
 AND SERIES OF BONDS 
  

												
	 MORTGAGE OR
 SUPPLEMENTAL
 INDENTURE
	 	 DATED AS OF
	 	 SERIES
	 	PRINCIPAL
AMOUNT
ISSUED	 	 PRINCIPAL
 AMOUNT
 OUTSTANDING

	 	 	 NO.
	 	 DESIGNATION
	 	 
	 Original
	 	June 1, 1939	 	1	 	 3- 1/2% Series
 due 1964
	 	$	22,000,000	 	None
						
	 First
	 	October 1, 1952	 	2	 	 3- 3/4% Series
 due 1982
	 	 	30,000,000	 	None
						
	 Second
	 	May 1, 1953	 	3	 	 3- 7/8% Series
 due 1983
	 	 	10,000,000	 	None
						
	 Third
	 	December 1, 1955	 		 	None	 			 	
						
	 Fourth
	 	March 15, 1957	 		 	None	 			 	
						
	 Fifth
	 	July 1, 1957	 	4	 	 4- 7/8% Series
 due 1987
	 	 	30,000,000	 	None
						
	 Sixth
	 	January 1, 1958	 	5	 	 4- 1/8% Series
 due 1988
	 	 	20,000,000	 	None
						
	 Seventh
	 	August 1, 1958	 	6	 	 4- 3/8% Series
 due 1988
	 	 	15,000,000	 	None
						
	 Eighth
	 	January 1, 1959	 	7	 	 4- 3/4% Series
 due 1989
	 	 	15,000,000	 	None
						
	 Ninth
	 	January 1, 1960	 	8	 	 5- 3/8% Series
 due 1990
	 	 	10,000,000	 	None
						
	 Tenth
	 	April 1, 1964	 	9	 	 4- 5/8% Series
 due 1994
	 	 	30,000,000	 	None
						
	 Eleventh
	 	March 1,1965	 	10	 	 4- 5/8% Series
 due 1995
	 	 	10,000,000	 	None
						
	 Twelfth
	 	May 1, 1966	 		 	None	 			 	
						
	 Thirteenth
	 	August 1, 1966	 	11	 	 6 % Series
 due 1996
	 	 	20,000,000	 	None
						
	 Fourteenth
	 	April 1, 1970	 	12	 	 9- 1/4% Series
 due 2000
	 	 	20,000,000	 	None
						
	 Fifteenth
	 	May 1, 1973	 	13	 	 7- 7/8% Series
 due 2003
	 	 	20,000,000	 	None
						
	 Sixteenth
	 	February 1, 1975	 	14	 	 9- 3/8% Series
 due 2005
	 	 	25,000,000	 	None
						
	 Seventeenth
	 	November 1, 1976	 	15	 	 8- 3/4% Series
 due 2006
	 	 	30,000,000	 	None
						
	 Eighteenth
	 	June 1, 1980	 		 	None	 			 	
						
	 Nineteenth
	 	January 1, 1981	 	16	 	 14- 1/8% Series
 due 1991
	 	 	40,000,000	 	None
						
	 Twentieth
	 	August 1, 1982	 	17	 	15- 3/4% Series
due 1990-1992	 	 	60,000,000	 	None
						
	 Twenty-First
	 	September 1, 1983	 	18	 	 13- 1/2% Series
 due 2013
	 	 	60,000,000	 	None

  

 A-1 









											
						
	 Twenty-Second
	 	March 1, 1984	 	19	 	 13- 1/4% Series
 due 1994
	 	60,000,000	 	None
						
	 Twenty-Third
	 	December 1, 1986	 	20	 	 9- 1/4% Series
 due 2016
	 	80,000,000	 	None
						
	 Twenty-Fourth
	 	January 1, 1988	 	21	 	 10- 3/8% Series
 due 2018
	 	50,000,000	 	None
						
	 Twenty-Fifth
	 	October 1, 1989	 	22	 	 7- 1/8% Series
 due 2013
	 	66,700,000	 	None
						
		 		 	 23
	 	 7- 2/5% Series
 due 2016
	 	17,000,000
	 	 None

						
	 Twenty-Sixth
	 	April 1, 1993	 	24	 	 Secured
 Medium-Term
 Notes, Series A
 ($250,000,000
 authorized)
	 	250,000,000	 	48,000,000
						
	 Twenty-Seventh
	 	January 1, 1994	 	25	 	 Secured
 Medium-Term
 Notes, Series B
 ($250,000,000
 authorized)
	 	161,000,000	 	5,000,000
						
	 Twenty-Eighth
	 	September 1, 2001	 	26	 	 Collateral Series
 due 2002
	 	220,000,000	 	None
						
	 Twenty-Ninth
	 	December 1, 2001	 	27	 	 7.75% Series
 due 2007
	 	150,000,000	 	None
						
	 Thirtieth
	 	May 1, 2002	 	28	 	 Collateral Series
 due 2003
	 	225,000,000	 	None
						
	 Thirty-first
	 	May 1, 2003	 	29	 	 Collateral Series
 due 2004
	 	245,000,000	 	None
						
	 Thirty-second
	 	September 1, 2003	 	30	 	 6.125% Series
 due 2013
	 	45,000,000	 	45,000,000
						
	 Thirty-third
	 	May 1, 2004	 	31	 	 Collateral Series
 due 2005
	 	350,000,000	 	None
						
	 Thirty-fourth
	 	November 1, 2004	 	32	 	 5.45% Series
 due 2019
	 	90,000,000	 	90,000,000
						
	 Thirty-fifth
	 	December 1, 2004	 	33	 	 Collateral Series
 2004A
	 	88,850,000	 	50,000,000
						
	 Thirty-sixth
	 	December 1, 2004	 	34	 	 Collateral Series
 2004B
	 	66,700,000	 	None
						
		 		 	 35
	 	 Collateral Series
 2004C
	 	17,000,000
	 	 None

						
	 Thirty-seventh
	 	December 1, 2004	 	36	 	 Collateral Series
 2004D
	 	350,000,000	 	None
						
	 Thirty-eighth
	 	May 1, 2005	 	37	 	 Collateral Series
 2005B
	 	66,700,000	 	66,700,000
						
		 		 	 38
	 	 Collateral Series
 2005C
	 	17,000,000
	 	 17,000,000

						
	 Thirty-ninth
	 	November 1, 2005	 	39	 	 6.25% Series
 due 2035
	 	100,000,000
50,000,000	 	 100,000,000
 50,000,000

						
	 Fortieth
	 	April 1, 2006	 	40	 	 Collateral Series
 due 2011
	 	320,000,000	 	320,000,000
						
	 Forty-first
	 	December 1, 2006	 	41	 	 5.70% Series
 due 2037
	 	150,000,000	 	150,000,000
						
	 Forty-second
	 	April 1, 2008	 	42	 	 5.95% Series
 due 2018
	 	250,000,000	 	250,000,000

  

 A-2 









											
	 Forty-third
	 	November 1, 2008	 	43	 	Collateral Series
2008A	 	200,000,000	 	200,000,000
						
	 Forty-fourth
	 	December 1, 2008	 	44	 	7.25% Series
due 2013	 	30,000,000	 	30,000,000

  

 A-3 








 EXHIBIT B 
 (Form of Bond) 
 This bond is non-transferable, except to a successor 
 Bank under the Reimbursement Agreement referred to herein). 
 AVISTA CORPORATION 
 First Mortgage Bond, 
 Collateral Series 2008B 
  

			
	REGISTERED	 	REGISTERED
		
	NO.
                                	 	$
                                

 AVISTA CORPORATION, a corporation of the State of Washington (hereinafter called the
Company), for value received, hereby promises to pay to 
  
 , as Bank under the
Reimbursement Agreement hereinafter referred to or registered assigns on December 30, 2009 
 DOLLARS 
 and to pay the registered owner hereof interest thereon from December 30, 2008 in arrears on March 31, June 30, September 30, and
December 30 of each year, commencing March 31, 2009 (each such date being hereinafter called an “Interest Payment Date”) and at Maturity (as hereinafter defined), at the rate of eight per centum (8%) per annum computed as
provided in the Forty-fifth Supplemental Indenture hereinafter referred to, until the Company’s obligation with respect to the payment of such principal shall have been discharged. The principal of and premium, if any, and interest on this bond
payable at Maturity shall be payable upon presentation hereof at the office or agency of the Company in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal
tender for public and private debts. The interest on this bond (other than interest payable at Maturity) shall be paid directly to the registered owner hereof. Interest payable at Maturity shall be paid to the person to whom principal shall be paid.
As used herein, the term “Maturity” shall mean the date on which the principal of this bond becomes due and payable, whether at stated maturity, upon redemption or acceleration, or otherwise. 
 This bond is one of an issue of bonds of the Company issuable in series and is one of a series known as its First Mortgage Bonds, Collateral Series
2008B, all bonds of all such series being issued and issuable under and equally secured (except insofar as any sinking or other fund, established in accordance with the provisions of the Mortgage hereinafter mentioned, may afford additional security
for the bonds of any particular series) by a Mortgage and Deed of Trust, dated as of June 1, 1939, executed by the Company (formerly known as The Washington Water Power Company) to City Bank Farmers Trust Company and Ralph E. Morton, as
Trustees 

  

 B-1 








 
(Citibank, N.A., successor Trustee to both said Trustees). Such mortgage and deed of trust has been amended and supplemented by various supplemental
indentures, including the Forty-fifth Supplemental Indenture, dated as of December 1, 2008 (the “Forty-fifth Supplemental Indenture”) and, as so amended and supplemented, is herein called the “Mortgage” . Reference is made
to the Mortgage for a description of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds and of the Trustee in respect thereof, the duties and immunities of the Trustee and the terms and
conditions upon which the bonds are and are to be secured and the circumstances under which additional bonds may be issued. By its acceptance of this bond, the holder hereof is deemed to have consented and agreed to all of the terms and provisions
of the Mortgage. 
 The Mortgage may be modified or altered by affirmative vote of the holders of at least 60% in principal amount of the
bonds outstanding under the Mortgage, considered as one class, or, if the rights of one or more, but less than all, series of bonds then outstanding are to be affected, then such modification or alteration may be effected with the affirmative vote
only of 60% in principal amount of the bonds outstanding of the series so to be affected, considered as one class, and, furthermore, for limited purposes, the Mortgage may be modified or altered without any consent or other action of holders of any
series of bonds. No modification or alteration shall, however, permit an extension of the Maturity of the principal of, or interest on, this bond or a reduction in such principal or the rate of interest hereon or any other modification in the terms
of payment of such principal or interest or the creation of any lien equal or prior to the lien of the Mortgage or deprive the holder of a lien on the mortgaged and pledged property without the consent of the holder hereof. 
 The bonds of this series are not redeemable, in whole or in part, at the option of the Company. 
 The bonds of this series have been issued and delivered to Bank of America, N.A. in order to provide the benefit of the lien of the Mortgage as security
for the obligation of the Company under the Letter of Credit and Reimbursement Agreement, dated as of December 1, 2008 (the “Reimbursement Agreement”), between the Company and the Bank, to pay the Obligations (as defined in the
Reimbursement Agreement), to the extent and subject to the limitations set forth below. 
 Upon the earliest of (A) the occurrence of an
Event of Default under the Reimbursement Agreement, and further upon the condition that, in accordance with the terms of the Reimbursement Agreement, the Obligations shall have been declared to be or shall have otherwise become due and payable
immediately and the Bank shall have delivered to the Company a notice demanding redemption of the bonds of this series which notice states that it is being delivered pursuant to Article VI of the Reimbursement Agreement, (B) the occurrence of
an Event of Default under clause (h) of Article VI of the Reimbursement Agreement, and (C) December 30, 2009, then all bonds of this series shall be redeemed or paid immediately at the principal amount thereof plus accrued interest to
the date of redemption for payment. 
 The obligation of the Company to pay the accrued interest on bonds of this series on any Interest
Payment Date prior to Maturity (a) shall be deemed to have been satisfied and discharged in full in the event that all amounts then due in respect of the Obligations shall have 

  

 B-2 








 
been paid or (b) shall be deemed to remain unsatisfied in an amount equal to the aggregate amount then due in respect of the Obligations and remaining
unpaid (not in excess, however, of the amount otherwise then due in respect of interest on the bonds of this series). 
 The obligation of
the Company to pay the principal of and accrued interest on bonds of this series at or after Maturity (x) shall be deemed to have been satisfied and discharged in full in the event that all amounts then due in respect of the Obligations shall
have been paid or (y) shall be deemed to remain unsatisfied in an amount equal to the aggregate amount then due in respect of the Obligations and remaining unpaid (not in excess, however, of the amount otherwise then due in respect of principal
of and accrued interest on the bonds of this series). 
 Anything in this bond to the contrary notwithstanding, if, at the time of the
Maturity of the bonds of this series, the stated aggregate principal amount of such bonds then outstanding shall exceed the aggregate principal amount of the Revenue Bonds (as defined in the Forty-fifth Supplemental Indenture), then outstanding, the
aggregate principal amount of such bonds shall be deemed to have been reduced by the amount of such excess. 
 The principal hereof may be
declared or may become due prior to the stated maturity date on the conditions, in the manner and at the time set forth in the Mortgage, upon the occurrence of a Completed Default as in the Mortgage provided. 
 As provided in the Mortgage and subject to certain limitations therein set forth, this bond or any portion of the principal amount hereof will be deemed
to have been paid if there has been irrevocably deposited with the Trustee moneys or direct obligations of or obligations guaranteed by the United States of America, the principal of and interest on which when due, and without regard to any
reinvestment thereof, will provide moneys which, together with moneys so deposited, will be sufficient to pay when due the principal of and premium, if any, and interest on this bond when due. 
 The Mortgage contains terms, provisions and conditions relating to the consolidation or merger of the Company with or into, and the conveyance or other
transfer, or lease, of assets to, another corporation and to the assumption by such other corporation, in certain circumstances, of all of the obligations of the Company under the Mortgage and on the bonds secured thereby. 
 This bond is non-transferable except as required to effect transfer to any successor bank under the Reimbursement Agreement, any such transfer to be made
at the office or agency of the Company in the Borough of Manhattan, The City of New York, upon surrender and cancellation of this bond, together with a written instrument of transfer whenever required by the Company duly executed by the registered
owner or by its duly authorized attorney, and, thereupon, a new fully registered bond of the same series for a like principal amount will be issued to the transferee in exchange herefor as provided in the Mortgage. The Company and the Trustee may
deem and treat the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment and for all other purposes. 
 In the manner prescribed in the Mortgage, any bonds of this series, upon surrender thereof for cancellation at the office or agency of the Company in the Borough of 

  

 B-3 








 
Manhattan, The City of New York, are exchangeable for a like aggregate principal amount of bonds of the same series of other authorized denominations.

 No recourse shall be had for the payment of the principal of or interest on this bond against any incorporator or any past, present or
future subscriber to the capital stock, stockholder, officer or director of the Company or of any predecessor or successor corporation, as such, either directly or through the Company or any predecessor or successor corporation, under any rule of
law, statute or constitution or by the enforcement of any assessment or otherwise, all such liability of incorporators, subscribers, stockholders, officers and directors being released by the holder or owner hereof by the acceptance of this bond and
being likewise waived and released by the terms of the Mortgage. 
 This bond shall not become obligatory until Citibank, N.A., the Trustee
under the Mortgage, or its successor thereunder, shall have signed the form of certificate endorsed hereon. 
 IN WITNESS WHEREOF,
AVISTA CORPORATION has caused this bond to be signed in its corporate name by its President or one of its Vice Presidents by his signature or a facsimile thereof, and its corporate seal to be impressed or imprinted hereon and attested by its
Corporate Secretary or one of its Assistant Corporate Secretaries by his signature or a facsimile thereof. 
  

					
	Dated:	 		 	
		
		 	AVISTA CORPORATION
			
		 	By:	 	  

			
	ATTEST:
                                         
                                       	 		 	

  

 B-4 








 TRUSTEE’S CERTIFICATE 
 This bond is one of the bonds, of the series herein designated, described or provided for in the within-mentioned Mortgage. 
  

			
	CITIBANK, N.A.
Trustee
		
	By:	 	  

		 	Authorized Signatory


  

 B-5 








 ASSIGNMENT CERTIFICATE 
 FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto 
  

			
	  
	 	

 [please insert social security or other identifying number of assignee] 
  

			
	  
	 	

 [please print or typewrite name and address of assignee] 
  

			
	  
	 	

 the within bond of AVISTA CORPORATION and does hereby irrevocably constitute and appoint
                    , Attorney, to transfer said bond on the books of the within-mentioned Company, will full power of substitution in the
premises. 
  

							
	Dated:	 	  
	 		 	

  

							
		 	  
	 		 	
			
		 		 	Notice: The signature to this assignment must correspond with the name as written upon the face of the bond in every particular without alteration or enlargement or any change
whatsoever.

  

 B-6