Document:

Services Agreement

 Exhibit 10.1 
 SERVICES AGREEMENT 
 This Services Agreement (“Agreement”) is made and
entered into as of the 6th day of April, 2006 (the “Effective Date”) by and among ONEOK, Inc., an
Oklahoma corporation (“ONEOK”), Northern Plains Natural Gas Company, LLC, a Delaware limited liability company (“Northern Plains”), NBP Services, LLC, a Delaware limited liability company (“NBP
Services”), Northern Border Partners, L.P., a Delaware limited partnership (the “MLP”), and Northern Border Intermediate Limited Partnership (the “ILP”), a Delaware limited partnership. Each party is
referred to herein individually as a “Party,” and collectively as the “Parties.” Capitalized terms used herein and not otherwise defined shall have the meanings given to them in Section 10.1.

 W I T N E S S E T H: 
 WHEREAS, the MLP and ILP previously contracted for NBP Services to provide certain services to the MLP and the ILP in connection with the day-to-day business and affairs of the MLP and ILP pursuant to the Administrative Services Agreement;

 WHEREAS, the Parties desire for the Administrative Services Agreement to be terminated, superseded and replaced by this Agreement and to
have the services previously provided under that Administrative Services Agreement be provided under this Agreement; 
 WHEREAS, Northern
Plains, pursuant to certain Operating Agreements, is the operator of certain interstate natural gas pipelines in which the MLP and the ILP have an ownership interest; 
 WHEREAS, the Operating Agreements each provide that Northern Plains may delegate or cause one or more of its affiliates to fulfill its obligations under the Operating Agreements; 
 WHEREAS, certain affiliates of ONEOK own all of the outstanding general partner interests of each of the MLP and ILP and own a substantial percentage of
the outstanding equity interests in the MLP; 
 WHEREAS, the Parties have determined that the operations of ONEOK and its affiliates and the
Northern Border Companies can operate more efficiently and cost effectively if certain common services are combined and shared; 
 WHEREAS,
certain ONEOK Affiliates and Northern Border Companies are regulated by various governmental entities that require a fair and reasonable method of allocation for costs incurred for such common services; and 
 WHEREAS, ONEOK (an affiliate of NBP Services and Northern Plains) desires to provide or cause the provision of certain services to the Northern Border
Companies, and the Northern Border Companies desire to receive these services, in accordance with the terms and conditions of this Agreement. 
 NOW THEREFORE, in consideration of the premises and the agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are 

 
hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows: 
 ARTICLE I 
 SERVICES TO BE PROVIDED 
 1.1 Services. On the terms and conditions set forth in this Agreement, ONEOK will provide or cause to be provided to the Northern Border Companies
at least the type and amount of services that it provides or causes to be provided to ONEOK Affiliates, including but not limited to, executive officers, legal services, human resources and employee benefits, information technology, insurance and
risk management, purchasing, inventory control, gas supply services, marketing, pipeline control, right of way management, general operations and maintenance, measurement, engineering, accounting, contract administration, SEC reporting, day-to-day
supervisory and administrative services, planning support, budgeting support, technical, treasury services, tax and internal audit services and other services required to be provided pursuant to the partnership agreements of the MLP and ILP, as
amended from time to time, and various other services routinely and customarily provided to the ONEOK Affiliates (the “Services”). Each Northern Border Company or permitted successor or assign that receives Services shall be
referred to as a “Purchaser” and collectively as the “Purchasers”. ONEOK and the ONEOK Affiliates that provide Services under this Agreement, including Northern Plains and NBP Services, shall be collectively
referred to as the “Provider.” 
 1.2 Operating Agreement Services. The Parties acknowledge and agree that Northern
Plains will continue to perform its obligations under each of the Operating Agreements. To the extent Northern Plains requests Services from ONEOK under this Agreement in order to perform those obligations, ONEOK shall provide such Services, and
Northern Plains shall pay for such Services, under the terms and conditions set forth in this Agreement. To the extent Northern Plains receives Services under this Agreement, it will be deemed a “Purchaser” with respect to such Services.

 1.3 Additional Services. Any additional services requested by any Purchaser will be provided on the basis agreed upon by the
Parties in writing. Unless the context otherwise requires, the term “Services” in this Agreement shall include any such additional services agreed upon in writing by the Parties. 
 1.4 Costs. The costs for the Services provided under this Agreement will be allocated and billed monthly to the Purchasers in a manner consistent
with the method of allocation of such costs among other ONEOK Affiliates and consistent with applicable law, including the requirements of the Federal Energy Regulatory Commission (“FERC”). Direct costs will be allocated to the
Purchasers having activities that give rise to such costs to the extent that such direct basis can reasonably be determined and allocated. The remaining unallocated direct costs and all indirect costs will then be allocated on the basis of a
three-factor formula (the “Distrigas Method”), consistent with methods approved by the FERC. The Distrigas Method provides for the allocation of common costs based on the average of the percentage of “gross plant and
investment”, “operating income” and “labor expense,” as such terms are defined in FERC regulations of each company involved in the calculation. The Provider will determine an average of those three factors for each Purchaser
and for ONEOK and each ONEOK Affiliate 

 
that is involved in the calculation. That average will be the allocation ratio for each such entity (the “Distrigas Allocation Ratio”). The
Distrigas Allocation Ratio for each such entity will then be applied to the total amount of common costs to determine the amount of common costs that will be allocated to each such entity. The Distrigas Allocation Ratio will be recalculated
annually, or as required due to acquisitions, divestitures or other similar types of transactions or regulatory requirements. For the avoidance of doubt, the costs allocated through the Distrigas Method are based on actual costs recognized under
U.S. generally accepted accounting principles and do not include a mark-up or other element of profit. The Provider is not entitled to and will not receive any other fee or other compensation for the performance of the Services other than as set
forth in this Section 1.4. 
 ARTICLE II 
 SERVICE STANDARD 
 2.1 Standard of Care; Limited Warranty. 
 (a) The Provider represents that it will discharge its duties hereunder in good faith and with reasonable diligence and on a basis
consistent with the standards of service provided to ONEOK Affiliates. EXCEPT AS SET FORTH IN THE IMMEDIATELY PRECEDING SENTENCE, THE PROVIDER MAKES NO (AND HEREBY DISCLAIMS AND NEGATES ANY AND ALL) WARRANTIES OR REPRESENTATIONS WHATSOEVER, EXPRESS
OR IMPLIED, WITH RESPECT TO THE SERVICES. IN NO EVENT SHALL THE PROVIDER BE LIABLE TO THE NORTHERN BORDER COMPANIES OR ANY OTHER PERSON FOR ANY INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES RESULTING FROM ANY ERROR IN THE PERFORMANCE OF THE
SERVICES, REGARDLESS OF WHETHER THE PROVIDER OR OTHERS MAY BE WHOLLY, CONCURRENTLY, PARTIALLY, OR SOLELY NEGLIGENT OR OTHERWISE AT FAULT; PROVIDED HOWEVER, THAT THE PROVIDER SHALL BE LIABLE FOR ANY DAMAGES ARISING OUT OF ITS GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT. THE PRECEDING IS THE ONLY WARRANTY CONCERNING THE SERVICES AND ANY RESULTS, WORK PRODUCT OR PRODUCTS RELATED THERETO, AND IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES AND REPRESENTATIONS EXPRESSED OR IMPLIED, INCLUDING,
WITHOUT LIMITATION, THE WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY OR NONINFRINGEMENT. THE PARTIES UNDERSTAND, ACKNOWLEDGE AND AGREE THAT THE LEVEL OF COMPENSATION THE PARTIES HAVE AGREED TO ACCEPT IS PREDICATED ON THIS
LIMITATION OF LIABILITY AND DISCLAIMER OF WARRANTIES. 
 (b) The Parties shall agree and communicate regarding (i) any
changes to the Services or (ii) service level expectations related to the Services. The Provider shall not make any changes to the Services or the manner in which they are provided without advance notice to the Purchaser. 
 2.2 Consequences of Breach or Non-Performance. The Purchasers shall promptly notify the Provider of any failure by the Provider to perform one or
more of the Services in 

 
accordance with the terms of this Agreement. In the event that the Provider does not cure such non-performance within thirty (30) business days of the
receipt of such notice, the Purchasers may terminate such Service(s) by delivering notice to the Provider. 
 2.3 Relationship of
Parties. The Parties hereby acknowledge and agree that, in providing the Services and otherwise in connection with this Agreement, the Provider is an independent contractor and is not, and shall not be deemed to be, an agent, employee or legal
representative of the Purchasers or otherwise as having power or authority to bind the Purchasers, unless specifically delegated to do so in order to facilitate the Services. 
 ARTICLE III 
 TERM AND TERMINATION 
 3.1 Term. This Agreement shall become effective as of the Effective Date and shall remain in effect until terminated as herein provided or until
Services are no longer being provided (the “Term”). 
 3.2 Termination of this Agreement. Except as set forth in
Section 2.2 of this Agreement, a Party may not terminate this Agreement during the Term except under the following circumstances: 
 (a) The Parties may terminate this Agreement by the execution of a written agreement signed by authorized representatives of all Parties, in which event the termination shall be effective on the date specified in such
agreement. 
 (b) If a transaction is consummated which would cause the Provider or its Affiliates (other than the Northern
Border Companies and their subsidiaries) to cease to be a general partner of the MLP or the ILP, then ONEOK or the MLP, as the case may be, shall have the right to terminate this Agreement upon the execution and delivery of a mutually agreeable
transition services agreement between the Parties. 
 3.3 Termination of the Administrative Services Agreement. Effective as of the
execution and delivery of this Agreement, the Administrative Services Agreement is hereby terminated, superseded and replaced by this Agreement; provided, however, that all amounts due or to become due under that Administrative Services Agreement
shall be paid in full and the Administrative Services Agreement shall continue in effect with respect thereto until all such amounts are paid in full. 
 ARTICLE IV 
 BILLING AND PAYMENT 
 4.1 Invoices. The Provider will send one monthly invoice to the ILP covering all of the Services provided under this Agreement. The monthly
invoice will be sent following completion of the Provider’s normal monthly financial reporting process, including completion of the Distrigas Method calculation. The ILP shall pay each invoice by wire transfer or other means of immediate
payment within fifteen (15) days of the invoice date without setoff or deduction of any kind, except as provided in Section 4.2. Any late payment by the ILP shall incur a late fee of ten percent (10%) per annum, calculated from
the due date until the date of 

 
payment. In the event that any invoice is based on estimated costs, the Provider shall make adjustments by increasing or decreasing the costs in the invoice
subsequent to the determination of the actual costs. 
 4.2 Disputed Amounts. In the event that a dispute arises as to the amount of
any statement or invoice or any portions thereof submitted pursuant to this Article IV, the Parties will resolve the dispute in accordance with this Section 4.2 and Section 4.3 below. Pending resolution of the dispute,
the ILP may withhold payment of the amounts on an invoice or statement to the extent such amounts are disputed in good faith, but shall pay all charges on such invoice or statement that are not so disputed. If the ILP disputes any amount on an
invoice or statement it shall promptly notify the Provider in writing of such disputed amounts and the reasons each such charge is disputed. The Provider shall provide the ILP with sufficient records relating to the disputed charge to enable the
Parties to resolve the dispute. In the event the determination is made that the ILP should have paid the disputed amount, the ILP shall pay the disputed amount, with interest on the disputed amount at a rate of ten percent (10%) per annum,
calculated from and after the original due date of such invoice until the date of payment. If the ILP paid the disputed amount, but such disputed amount is ultimately determined not to have been payable, then the Provider shall refund to the ILP the
disputed amount, with interest on the disputed amount at a rate of ten percent (10%) per annum, calculated from and after the date the Provider received the payment to the date of the refund. Payment by the ILP of a disputed amount shall not be
deemed a waiver of the right of the ILP to recoup any contested portion of any bill or statement. 
 4.3 Dispute Resolution. In the
event of a dispute under this Agreement, the Parties shall, during the fifteen (15) days after notice of such a dispute, use their commercially reasonable efforts to reach agreement on the disputed items or amounts. If the Parties are unable to
reach agreement within such period, they shall promptly thereafter cause a nationally recognized accounting firm agreeable to the Parties (the “Accounting Referee”) to review this Agreement and the disputed items or amounts. The
Accounting Referee shall deliver to the Parties as promptly as practicable (but in any event no later than thirty (30) days from the date of engagement of the Accounting Referee), a report setting forth the Accounting Referee’s
determination of the appropriate resolution of the dispute. Such determination shall be final and binding upon the Parties. The cost of such review and report shall be borne equally by each Party involved in the dispute. 
 4.4 Audit. The Northern Border Companies and their designated representatives, after fifteen (15) days notice in writing to the Provider,
shall have the right during normal business hours to audit, at their own expense, all books and records of the Provider related to the Services. Such audits shall not be commenced more often than twice each calendar year. The Northern Border
Companies shall have two (2) years after the close of a calendar year in which to make an audit of the Provider’s records for such calendar year. Absent fraud or intentional concealment or misrepresentation by the Provider or its
employees, the Provider shall neither be required nor permitted to adjust any item unless a claim therefore is presented or adjustment is initiated within two (2) years after the close of the calendar year in which the statement therefore is
rendered, and in the absence of such timely claims or adjustments, the bills and statements rendered shall be conclusively established as correct. The Provider shall use reasonable 

 
commercial efforts to obtain similar audit rights from contractors, consultants and suppliers engaged to perform any of the Services on behalf of the
Provider. 
 ARTICLE V 
 LIMITATION OF LIABILITY AND INDEMNITIES 
 5.1 Purchaser’s Limitation of Liability. Each of the Northern Border
Companies agrees, with respect to the Services provided to such entity hereunder, to indemnify, defend and hold harmless the Provider and its Affiliates (provided that Northern Plains shall not be entitled to indemnity for any costs, expenses or
liabilities incurred by it as a general partner of the MLP or the ILP), and their respective employees, officers, directors, representatives and agents harmless from and against all claims, losses, costs, damages and expenses (including, without
limitation, attorneys’ fees and expenses), penalties and liabilities (collectively, “Liabilities”) arising out of the acts (or failure to act) by any such persons or entities in connection with the performance by such persons
or entities of such Services, REGARDLESS OF WHETHER THE PROVIDER OR SUCH OTHER PERSONS OR ENTITIES MAY BE WHOLLY, CONCURRENTLY, PARTIALLY OR SOLELY NEGLIGENT OR OTHERWISE AT FAULT IN CONNECTION THEREWITH; PROVIDED, HOWEVER, THAT NEITHER THE PROVIDER
NOR ANY OF SUCH OTHER PERSONS AND ENTITIES SHALL BE INDEMNIFIED FOR THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PROVIDER OR SUCH OTHER PERSONS OR ENTITIES. 
 5.2 Provider’s Indemnification. The Provider shall indemnify, defend and hold the Northern Border Companies and their general partners and their respective employees, directors, policy committee members,
officers, representatives and agents harmless from and against all Liabilities arising out of the performance of this Agreement and resulting from the gross negligence or willful misconduct of the Provider or its Affiliates. 
 5.3 Defense of Claims. It is understood and agreed that in the event that any Party is made a defendant in any suit, action or proceeding for
which it is entitled to be indemnified pursuant to this Agreement, and the applicable indemnifying party fails or refuses to timely assume the defense thereof, after having been notified by the indemnified party to do so, that the indemnified party
may compromise and settle or defend any such claim, and the applicable indemnifying party shall be bound and obligated to reimburse said indemnified party for the amount expended by the indemnified party in settling and compromising any such claim,
or for the amount expended by the indemnified party in paying any judgment rendered therein, together with all reasonable attorneys’ fees and costs incurred by the indemnified party for defense or settlement of such claim. Any judgment rendered
against the indemnified party or amount expended by the indemnified party in compromising or settling such claim, together with all reasonable attorneys’ fees and costs, shall be conclusive as determining the amount for which the applicable
indemnifying party is liable to reimburse the indemnified party hereunder. 
 ARTICLE VI 
 CONFIDENTIALITY AND OWNERSHIP OF RECORDS 
 6.1 Confidentiality. The Parties acknowledge that in the course of this Agreement they may have access to and be in possession of Confidential Information (as described 

 
immediately below) of the other Party. Each Party shall protect the other Parties’ Confidential Information in the same manner as it protects its own
confidential information of like kind, which in no event shall be less than reasonable care. Each Party’s access to the Confidential Information of the other Parties shall be restricted to those of such Party’s personnel who have a need to
know in order to perform under this Agreement. The provisions of this Section shall survive any termination or expiration of this Agreement and shall not be limited by any limitation of liability contained herein. The term “Confidential
Information” shall mean information regarded by that Party as proprietary or confidential, including, but not limited to, information relating to its business affairs, financial information and prospects; future projects or purchases;
proprietary products, materials or methodologies; data; customer lists; system or network configurations; passwords and access rights; and any other information marked as confidential or, in the case of information verbally disclosed, verbally
designated as confidential. 
 6.2 Ownership of Records. The Northern Border Companies shall own the data, records, information, etc.
provided, generated, or otherwise related to the Services and the business of the Northern Border Companies (“Northern Border Company Records”), regardless of who prepares or generates such Northern Border Company Records. The
Provider shall maintain on behalf of the Northern Border Companies all Northern Border Company Records and shall not destroy or delete any Northern Border Company Records without the prior written consent of the Northern Border Companies.
Additionally, should this Agreement be terminated, then the Provider shall deliver or cause to be delivered all Northern Border Company Records to the Northern Border Companies; provided, however, that ONEOK shall be entitled to retain copies
of any such Records. 
 ARTICLE VII 
 FORCE MAJEURE 
 7.1 Force Majeure. Subject to the standards set forth in Article II, if, by reason of force
majeure (as defined in Section 7.2 below), a Party is rendered unable, wholly or in part, to carry out its obligations under this Agreement, and if the non-performing Party declaring force majeure gives notice and reasonable particulars
of such force majeure to the Party to whom the performance is due within a reasonable time after the occurrence of the cause relied on, upon giving such notice, so far as and to the extent that it is affected by such force majeure, the
non-performing Party declaring force majeure shall not be liable solely on account of such inability to perform during the continuance of any inability so caused; provided, however, the non-performing Party shall use commercially reasonable
efforts to recommence performance of the affected Services as promptly as possible; provided, further, however, that an event of force majeure shall not excuse payment for Services provided hereunder. 
 7.2 Definition of Force Majeure. The term “force majeure” as employed in this Agreement shall mean acts of God; strikes, lockouts or
industrial disputes or disturbances; civil disturbances; arrests and restraints from rulers of people; interruptions by government, administrative agency or court orders, other than as a result of a failure to comply with laws; present and future
valid orders, decisions or rulings of any governmental or administrative entity having proper jurisdiction; acts of a public enemy; wars; acts of terrorism; riots; blockades; insurrections; inability to secure materials by reason of allocations
promulgated by authorized governmental agencies; epidemics; landslides; lightning; earthquakes; fire; storm; floods; 

 
washouts; whether of the kind herein enumerated or otherwise, not reasonably within the control of the Party claiming force majeure and not caused, in whole
or in part, by the acts or omissions of the Party so affected by force majeure. 
 ARTICLE VIII 
 NOTICES AND REPORTS 
 8.1
Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed duly given (i) when delivered personally or by prepaid overnight courier, with a record of receipt, (ii) the fourth day after
mailing, if mailed by certified mail, return receipt requested, or (iii) the day of transmission, if sent by facsimile or telecopy during regular business hours, or the day after transmission if sent after regular business hours (with a copy
promptly sent by prepaid overnight courier with record of receipt or by certified mail, return receipt requested), to the Parties at the following addresses or telecopy numbers (or to such other address or telecopy number as a Party may have
specified by notice given to the other Party pursuant to this provision): 
 If to the Provider(s), to: 
 ONEOK, Inc. 
 100 West 5th Street 
 Tulsa,
OK 74103 
 Attn: General Counsel 
 Facsimile: (918) 588-7971 
 If to Northern Border Companies: 
 Northern Border Partners, L.P. 
 13710 FNB
Parkway 
 Omaha, NE 68154-5200 
 Attention: General Counsel 
 Facsimile: (402) 492-7480 
 ARTICLE IX 
 MISCELLANEOUS 
 9.1 Applicable Law. THIS AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT, AND ANY CLAIM OR CONTROVERSY DIRECTLY OR
INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL IN ALL RESPECTS
BE GOVERNED BY AND INTERPRETED, CONSTRUED, AND DETERMINED IN ACCORDANCE WITH, THE APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE AND THE INTERNAL LAWS OF THE STATE OF OKLAHOMA (WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION THAT WOULD REQUIRE THE
APPLICATION OF THE LAW OF ANY OTHER JURISDICTION). 

 9.2 Waiver. The performance of or compliance with a Party’s obligation hereunder may be
waived, but only in writing signed by an authorized representative of the other relevant Party. No waiver or failure of enforcement by any Party of any default by any other Party in the performance of any provision, condition or requirement herein
shall be deemed to be a waiver of, or in any manner a release of the defaulting Party from, performance of any other provision, condition or requirement herein, nor deemed to be a waiver of, or in any manner a release of the defaulting Party from,
future performance of the same provision, condition or requirement; nor shall any delay or omission of any non-defaulting Party to exercise any right hereunder in any manner impair the exercise of any such right or any like right accruing to it
thereafter. 
 9.3 Modification. This Agreement may not be modified, varied or amended except by an instrument in writing signed by
the Parties. 
 9.4 Headings. The headings to each of the various Articles and Sections in this Agreement are included for convenience
and reference only and shall have no effect on, or be deemed as part of the text of, this Agreement. 
 9.5 Third Parties. Except as
provided in Article V hereof, this Agreement is not intended to confer upon any Person not a Party hereto any rights or remedies hereunder, and no Person other than the Parties hereto is entitled to rely on or enforce any representation,
warranty or covenant contained herein. 
 9.6 Survival; Limitations Period. Notwithstanding any other provisions in this Agreement,
all indemnities, limitations of liability, and payment obligations set forth in this Agreement, and the provisions set forth in Section 4.2 and Articles V, VI, VII, VIII, IX, X and XI,
shall survive the termination of this Agreement or the expiration of the Term, in whole or in part. NO PARTY MAY ASSERT ANY CAUSE OF ACTION AGAINST ANY OTHER PARTY ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT MORE THAN ONE (1) YEAR AFTER
TERMINATION OF THIS AGREEMENT. 
 9.7 Binding Effect Assignment. 
 (a) Subject to Section 9.7(b) below, no Party hereto may assign this Agreement, in whole or in part, except with the prior
written approval of each other Party. This Agreement shall inure to the benefit of, and shall be binding upon, the Parties and their respective permitted successors and assigns. 
 (b) The Provider may assign the performance by it of any Service to an Affiliate (other than the Northern Border Companies and their
subsidiaries) or any subsidiary or any successor in interest to any such Affiliate or subsidiary. In addition, the Provider may subcontract or outsource the performance of any Service to a third party. 
 9.8 Entire Agreement. This Agreement, including any exhibits, attachments and schedules hereto, constitutes the entire agreement between the
Parties concerning the subject matter hereof, and supersedes any prior understandings or written or oral agreements relative to such subject matter. However, this Agreement in no way changes or amends the terms of the Operating Agreements or the
Administrative Services Agreement or the obligations of NBP 

 
Services and Northern Plains to any of the Northern Border Companies under any of those agreements. 
 9.9 Waiver of Jury Trial. THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
THAT THEY MAY HAVE TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION, OR IN ANY LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT,
OR ANY OTHER THEORY). EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTIES WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 
 9.10 No Strict Construction. The Parties to this Agreement have participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises with respect to this Agreement, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring a
Party by virtue of the authorship of any of the provisions of this Agreement. 
 9.11 Severability. If any provision of this Agreement
is invalid or unenforceable, the balance of this Agreement shall remain in effect. 
 9.12 Counterparts. This Agreement may be
executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. 
 9.13 Acknowledgement of Applicability of Section 365(n) of the Bankruptcy Code. The Parties hereby acknowledge that this Agreement is an executory contract granting rights in intellectual property to the
Northern Border Companies as described in the U. S. Bankruptcy Code, Title 11 Section 365(n)(1)(B), and, as such, the Northern Border Companies may retain their rights under this Agreement in the event that the Provider or its Affiliates or its
trustee, as applicable, rejects such executory contract or this Agreement pursuant to, and in accordance with, Section 365(n) of Title 11. Furthermore, the Parties acknowledge and agree that the execution of this Agreement shall not impair any
of the Provider’s rights under title 11 of the United States Code. 
 ARTICLE X 
 INTERPRETATION; DEFINITIONS 
 10.1
Definitions. Capitalized terms used herein and not otherwise defined shall have the following meanings: 

 “Administrative Services Agreement” means the agreement between NBP Services, LLC,
Northern Border Partners, L.P. and Northern Border Intermediate Limited Partnership effective as of October 1, 1993, as amended. 
 “Affiliate” means any person or entity that is Controlled By a person. For purposes of this Agreement, a Provider shall not constitute an Affiliate of any Purchaser. 
 “Control” or “Controlled By” means possession, directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of securities or partnership or other ownership interests, by written contract or otherwise). 
 “Northern Border Companies” (each, individually, a Northern Border Company) means (i) the MLP, (ii) the ILP, (iii) any direct or indirect subsidiary of the MLP, and (iv) any other entity that directly,
or through one or more intermediaries, is controlled by the MLP, and (v) any entity in which the MLP or ILP has a direct or indirect ownership interest and NBP Services or Northern Plains is contractually obligated to provide administrative
and/or operational services. 
 “ONEOK Affiliates” means any direct or indirect subsidiary of ONEOK or any entity controlled
by ONEOK, but shall exclude any of the Northern Border Companies. 
 “Operating Agreements” include (i) the Northern
Border Pipeline Project Operating Agreement between Northern Plains Natural Gas Company and Northern Border Pipeline Company dated February 28, 1980; (ii) the Midwestern Gas Transmission Company Operating Agreement between Northern Plains
Natural Gas Company and Midwestern Gas Transmission Company dated May 1, 2001; (iii) the Viking Gas Transmission Company Operating Agreement between Northern Plains Natural Gas Company and Viking Gas Transmission Company dated
January 17, 2003, and (iv) the Operating Agreement between Northern Plains Natural Gas Company and Guardian Pipeline, L.L.C. dated April 5, 2004. Additionally, this definition shall include any other operating agreement subsequently
entered into by Northern Plains for the purpose of providing similar services to other natural gas transmission companies or similar services to other entities in the energy industry. 
 10.2 Construction and Interpretation. All references herein to agreements and other contractual instruments shall be deemed to include all
exhibits, attachments and appendices attached thereto and all amendments and other modifications to such agreements and instruments. Words used herein in the singular, where the context so permits, shall also apply to words when used in the plural
and visa versa. The term “including” when used in this Agreement will be by way of example and not considered in any way to be a limitation, and means “including, without limitation”. 
 ARTICLE XI 
 LICENSE GRANT

 11.1 License. Subject to the terms and conditions of this Agreement, and subject to the right of ONEOK and the ONEOK Affiliates
to do so, ONEOK and the ONEOK Affiliates (collectively, for purposes of this Article XI, “Licensor”) hereby grant and agree to grant to each Northern Border Company (each, for purposes of this Article XI, a
“Licensee”), under all of Licensor’s intellectual property rights in and to the software programs, object code and source 

 
code, and documentation related to the Services and licensed patents related thereto (“Licensed Programs”), a fully paid-up, irrevocable and
perpetual (during the term of this Agreement), worldwide, non-exclusive, transferable, sublicensable, assignable license to: (i) copy, modify and use the Licensed Programs and documentation; (ii) use, make, have made, distribute, and sell
any and all products and services of Licensee, its Affiliates, and its sublicensees (if any) and (iii) engage in the business as conducted by Licensee, its Affiliates, and sublicensees (if any). The foregoing license shall include the right for
any third party service company or independent contractor retained by any Licensee or an Affiliate of any Licensee (“Contractor”) to install, copy, modify and/or use the Licensed Programs on behalf of such Licensee and its
Affiliates. The grant of the foregoing licenses with respect to any particular Licensed Program and related documentation or patents shall be limited to those Licensed Programs utilized by the Provider to provide the Services to the Purchasers and
shall not include any Licensed Programs subject to agreements that would be breached by the grant in this paragraph. 
 11.2 Existing
Rights. Except as expressly provided herein, Licensor shall retain all of its right, title and interest, including, without limitation, all intellectual property rights, in and to the Licensed Programs, including any and all copies in whatever
form. Licensee acknowledges that all materials provided by Licensor to Licensee under this provision, including, but not limited to the Licensed Programs, class libraries, scripts, algorithms, designs, flow-charts, procedures, processes, systems,
methodologies, and information shall remain the sole and exclusive property of Licensor. 
 11.3 Hardware and Software Platform.
Licensee acknowledges that Licensee’s operation of the Licensed Programs may require, among other things, Licensee’s obtaining rights to use third party hardware and licensed copies of third party software, and Licensee shall be
responsible for obtaining such rights to use third party hardware and software. Licensor assumes no responsibility or liability under this license grant or otherwise for obtaining or providing any such third party hardware or software or for
providing any labor support. Licensor shall provide reasonable assistance in converting Licensee’s data files for use with the Licensed Programs. 
 (Signature Page Follows) 

 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective officers
thereunto duly authorized, all as of the date first above written. 
  

			
	 ONEOK, Inc., an Oklahoma corporation

		
	By:	 	 /s/ Jim Kneale

	 Name:
	 	 Jim Kneale

	 Title:
	 	Executive Vice President – Finance and Administration and Chief Financial Officer

			
	NORTHERN PLAINS NATURAL GAS COMPANY, LLC, a Delaware limited liability company
		
	By:	 	 /s/ Jerry L. Peters

	 Name:
	 	 Jerry L. Peters

	 Title:
	 	Vice President, Finance and Treasurer

			
	NBP SERVICES, LLC, a Delaware limited liability company
		
	By:	 	 /s/ Jerry L. Peters

	 Name:
	 	 Jerry L. Peters

	 Title:
	 	Vice President, Finance and Treasurer

			
	NORTHERN BORDER PARTNERS, L.P., a Delaware limited partnership
		
	By:	 	 /s/ Jerry L. Peters

	 Name:
	 	 Jerry L. Peters

	 Title:
	 	Chief Financial and Accounting Officer

			
	NORTHERN BORDER INTERMEDIATE LIMITED PARTNERSHIP, a Delaware limited partnership
		
	By:	 	 /s/ Jerry L. Peters

	 Name:
	 	 Jerry L. Peters

	 Title:
	 	Chief Financial and Accounting OfficerFortieth Supplemental Indenture, dated as of April 1, 2006

 Exhibit 4.1 
  

 AVISTA CORPORATION 
 TO 
 CITIBANK, N.A. 
 As Successor Trustee under 
 Mortgage and Deed of Trust, 
 dated as of June 1, 1939 
  

 Fortieth Supplemental Indenture 
 Providing among other things for a Series of Bonds designated 
 “First Mortgage Bonds,
Collateral Series due 2011” 
 Due April 5, 2011 
  

 Dated as of April 1, 2006

  

 FORTIETH SUPPLEMENTAL INDENTURE 
 THIS INDENTURE, dated as of the 1st day of April, 2006, 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 “Fortieth 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 Mortgage, as supplemented and amended by the First through Thirty-ninth Supplemental
Indentures being herein sometimes called the “Mortgage”); and 
 WHEREAS the Original Mortgage and the First through Thirty-eighth
Supplemental Indentures have been appropriately filed or recorded in various official records in the States of Washington, California, Idaho, Montana and Oregon, as set forth in the First through Thirty-ninth Supplemental Indentures and the
Instrument of Further Assurance, dated December 15, 2001, hereinafter referred to; and 
 WHEREAS the Thirty-ninth Supplemental
Indenture, dated as of November 1, 2005 has been appropriately filed or recorded in the various official records in the States of Washington, Idaho, Montana and Oregon set forth in Exhibit B hereto; 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 a 

  

 2 

 
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 California, 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, California, 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 Fortieth Supplemental Indenture and
the terms of the Bonds of the Fortieth 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 Fortieth
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 

  

 3 

 
receipt and sufficiency whereof are hereby acknowledged, hereby confirms the estate, title and rights of the Trustee (including, without limitation, the lien
of the Mortgage on the property of the Company subjected thereto, whether now owned or hereafter acquired) held as security for the payment of both the principal of and interest and premium, if any, on the Bonds from time to time issued under the
Mortgage according to their tenor and effect and the performance of all the provisions of the Mortgage and of such Bonds, and, without limiting the generality of the foregoing, hereby confirms the grant, bargain, sale, release, conveyance,
assignment, transfer, mortgage, pledge, setting over and confirmation unto the Trustee, contained in the Mortgage, of all the following described properties of the Company, whether now owned or hereafter acquired, namely: 
 All of the property, real, personal and mixed, of every character and wheresoever situated (except any hereinafter or in the Mortgage
expressly excepted) which the Company now owns or, subject to the provisions of Section 87 of the Original Mortgage, 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. 
 The property so conveyed or intended to be so conveyed under the Mortgage shall include, but shall
not be limited to, the property set forth in Exhibit C hereto, the particular description of which is intended only to aid in the identification thereof and shall not be construed as limiting the force, effect and scope of the foregoing. 

 

 4 

 TOGETHER WITH all and singular the tenements, hereditaments and appurtenances belonging or in anywise
appertaining to the aforesaid property or any part thereof, with the reversion and reversions, remainder and remainders and (subject to the provisions of Section 57 of the Original Mortgage) the tolls, rents, revenues, issues, earnings, income,
product and profits thereof, and all the estate, right, title and interest and claim whatsoever, at law as well as in equity, which the Company now has or may hereafter acquire in and to the aforesaid property and franchises and every part and
parcel thereof. 
 THE COMPANY HEREBY CONFIRMS that, subject to the provisions of Section 87 of the Original Mortgage, all the property,
rights, and franchises acquired by the Company after the date thereof (except any hereinbefore or hereinafter or in the Mortgage expressly excepted) are and shall be as fully embraced within the lien of the Mortgage as if such property, rights and
franchises had been owned by the Company at the date of the Original Mortgage and had been specifically described therein. 
 PROVIDED THAT
the following were not and were not intended to be then or now or hereafter granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed under the Mortgage and were, are and shall be expressly
excepted from the lien and operation 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 Fortieth Supplemental Indenture
being supplemental to the Mortgage. 
  

 5 

 AND IT IS HEREBY FURTHER CONFIRMED by the Company that all the terms, conditions, provisos, covenants and
provisions contained in the Mortgage shall affect and apply to the property in the Mortgage described and conveyed, and to the estates, rights, obligations and duties of the Company and the Trustee and the beneficiaries of the trust with respect to
said property, and to the Trustee and its successors in the trust, in the same manner and with the same effect as if the said property had been owned by the Company at the time of the execution of the Original Mortgage, and had been specifically and
at length described in and conveyed to said Trustee by the Original Mortgage as a part of the property therein stated to be conveyed. 
 The
Company further covenants and agrees to and with the Trustee and its successor or successors in such trust under the Mortgage, as follows: 
 ARTICLE I 
 Fortieth Series of Bonds 
 SECTION 1. (I) There shall be a series of bonds designated “Collateral Series due 2011” (herein sometimes referred to as the “Fortieth 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 B hereto. Bonds of the Fortieth 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 Fortieth Series shall mature on April 5, 2011 and shall bear interest, be redeemable and have such other terms and provisions as set forth below. 
 (II) The Bonds of the Fortieth Series shall have the following terms and characteristics: 
 (a) the Bonds of the Fortieth Series shall be initially authenticated and delivered under the Mortgage in the aggregate principal amount of $320,000,000; 
 (b) the Bonds of the Fortieth 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 hereafter 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 Credit Agreement (as hereinafter defined); 
 (c) the principal of and interest on each Bond of the Fortieth Series payable at Maturity shall be payable upon presentation thereof at
the office or agency 

  

 6 

 
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; and the interest on each Bond of the Fortieth Series (other than interest payable at Maturity) shall be payable directly to the registered owner thereof; 
 (d) the Bonds of the Fortieth Series shall not be redeemable, in whole or in part, at the option of the Company; 
 (e) (i) the Bonds of the Fortieth Series are to be issued and delivered to the Administrative Agent (as hereinafter defined) in order to
provide the benefit of the lien of the Mortgage as security for the obligation of the Company under the Credit 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 Credit Agreement, and further upon the condition that, in accordance with the terms of the Credit Agreement, the Commitments (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 Administrative Agent shall have delivered to the Company a notice demanding redemption of the Bonds of the Fortieth Series which notice
states that it is being delivered pursuant to Article VII of the Credit Agreement, (B) the occurrence of an Event of Default under clause (g) or (h) of Article VII of the Credit Agreement, and (C) April 5, 2011, then all
Bonds of the Fortieth 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 Fortieth Series on any Interest Payment Date prior to
Maturity (a) shall be deemed to have been satisfied and discharged in full in the event that all amounts then due in respect of the Obligations shall have been paid or (b) shall be deemed to remain unsatisfied in an amount equal to the
aggregate amount then due in respect of the Obligations and remaining unpaid (not in excess, however, of the amount otherwise then due in respect of interest on the Bonds of the Fortieth Series); 
 (iv) the obligation of the Company to pay the principal of and accrued interest on Bonds of the Fortieth 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 Fortieth Series). 
  

 7 

 (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 Fortieth Series as the same shall become due and payable shall have been fully satisfied and discharged unless and until it shall have received a written notice from the Administrative Agent, signed
by an authorized officer thereof, stating that the principal of and/or interest on the Bonds of the Fortieth 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 Fortieth Series; 
 (g) in the event of an application by the Administrative Agent for a substituted Bond of the Fortieth Series pursuant to Section 16
of the Original Mortgage, the Administrative Agent shall not be required to provide any indemnity or pay any expenses or charges as contemplated in said Section 16; and 
 (h) the Bonds of the Fortieth Series shall have such other terms as are set forth in the form of bond attached hereto as Exhibit B.

 Anything in this Fortieth Supplemental Indenture or in the Bonds of the Fortieth Series to the contrary notwithstanding, if, at the time
of the Maturity of such Bonds, the stated aggregate principal amount of such Bonds then Outstanding shall exceed the aggregate Commitments (as hereinafter defined), 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 Fortieth Supplemental Indenture, except as otherwise expressly provided or
unless the context otherwise requires, the terms defined below shall have the meanings specified: 
 “Administrative
Agent” means The Bank of New York, in its capacity as Administrative Agent under the Credit Agreement. 
 “Bond Delivery Agreement” means the Bond Delivery Agreement, dated April 6, 2006 between the Company and the Administrative Agent. 
 “Credit Agreement” means the Credit Agreement, dated as of December 17, 2004, as amended by Amendment No. 1,
dated as of April 6, 2006 among the Company, the banks parties thereto, Bank of America, N.A., as Managing Agent, KeyBank National Association, as Documentation Agent, U.S. Bank, National Association, as Documentation Agent, Wells Fargo Bank,
as Documentation Agent and an Issuing Bank, Union Bank of California, N.A., as Syndication Agent and an Issuing Bank, and The Bank of New York, as Administrative Agent and an Issuing Bank. 
  

 8 

 “Interest Payment Date” means
March 31, June 30, September 30 and December 31 of each year, commencing June 30, 2006. 
 “Maturity” means the date on which the principal of the Bonds of the Fortieth 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. 
 “Commitments”, “Loans” and “Revolving Credit Exposures” shall have the meanings
specified in the Credit Agreement: 
 A copy of the Credit Agreement is on file at the office of the Administrative Agent at One Wall Street,
18th Floor, New York, NY 10286 and at the office of the Company at 1411 East Mission Avenue, Spokane, WA 99202.

 (IV) Upon the delivery of this Fortieth Supplemental Indenture, Bonds of the Fortieth Series in an aggregate principal amount not to
exceed $320,000,000 are to be issued and will be Outstanding, in addition to $910,550,000 aggregate principal amount of bonds of prior series Outstanding at the date of delivery of this Fortieth Supplemental Indenture. 
 ARTICLE II 
 Prospective Amendment

 SECTION 1. The owners of the Bonds of the Fortieth Series shall be deemed to have consented to the amendment of Section 28 of the
Original Mortgage to add at the end thereof a new paragraph reading as follows: 
 Notwithstanding the foregoing, any Opinion
of Counsel delivered pursuant to subdivision (7) of this Section 28, or pursuant to any other provision of this Indenture by reference to this Section 28, may, at the election of the Company, omit any or all of the statements
contained in clause (a) of subdivision (7) if there shall have been delivered to the Trustee a policy of title insurance (or endorsement thereto) issued by a nationally recognized title insurance company, in an amount not less than
twenty-eight percent (28%)1 of the cost or fair value to the Company (whichever is less) of the Property Additions
made the basis of such application, insuring, in customary terms, against risk of loss sustained or incurred by the Trustee by reason of any 

  

	1	The owners of the Bonds of the Fortieth Series shall be deemed to have consented to the amendment contained in this Section 1 of Article II, either with the
percentage shown above or with any higher percentage. 

 9 

 
circumstances or conditions by virtue of which the statements omitted from clause (a) of such Opinion of Counsel would not have been accurate if made.

 ARTICLE III 
 Miscellaneous Provisions 
 SECTION 1. The terms defined in the Original Mortgage of this Fortieth 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 Fortieth 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 Fortieth
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 Fortieth
Supplemental Indenture. 
 SECTION 3. Whenever in this Fortieth 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 Fortieth 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 Fortieth 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 Fortieth Supplemental Indenture or any covenant, condition,
stipulation, promise or agreement hereof, and all the covenants, conditions, stipulations, promises and agreements in this Fortieth 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 Fortieth 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. 
  

 10 

 SECTION 6. The titles of the several Articles of this Fortieth Supplemental Indenture shall not be deemed
to be any part thereof. 
  

 11 

 IN WITNESS WHEREOF, on the 6th day of April, 2006, 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 6th day of April, 2006, 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/ Malyn K. Malquist

		 		 		 		 	 Senior Vice President

				
	 Attest:
	 		 		 	Corporate Seal
				
	 /s/ Susan Y. Miner
	 		 		 	
	 Assistant Corporate Secretary
	 		 		 	
				
	 Executed, sealed and delivered
by AVISTA CORPORATION
in the presence of:
	 		 		 	
				
	 /s/ Diane C. Thoren
	 		 		 	
				
	 /s/ Ryan L. Krasselt
	 		 		 	

  

 12 

									
		 		 	 CITIBANK, N.A., AS TRUSTEE

				
		 		 	 By
	 	 /s/ Wafaa Orfy

		 		 		 		 	 Wafaa Orfy

		 		 		 		 	 Vice President

				
	 Attest:
	 		 		 	Corporate Seal
				
	 /s/ John J. Byrnes
	 		 		 	
	 John J. Byrnes Vice President
	 		 		 	
				
	 Executed, sealed and delivered
by CITIBANK, N.A.,
as trustee. in the presence of:
	 		 		 	
				
	 /s/ R.T. Kirchner
	 		 		 	
	 R.T. Kirchner
	 		 		 	
				
	 /s/ Louis Piscitelli
	 		 		 	
	 Louis Piscitelli
	 		 		 	

  

 13 

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

 On the 6th day of April, 2006, before me personally appeared Malyn K. Malquist, to me known to be
a Senior 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 6th day of April, 2006, before me, a Notary Public in and for the State and County aforesaid, personally appeared Malyn K. Malquist, known to me to be a Senior 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. 
  

									
			
	 Notary Seal
	 		 	 /s/ Diane L. Kaufman

		 		 		 		 	 Notary Public

		 		 		 		 	 State of Washington

		 		 		 		 	 Commission Expires 07-03-08

  

 14 

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

 On the 4th day of April, 2006 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
4th day of April, 2006, before me, a Notary Public in and for the State and County aforesaid, personally appeared Wafaa Orfy, known to me to be a 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. 
  

									
			
	 Notary Seal
	 		 	 /s/ Karen Katlan

		 		 		 	 Notary Public

		 		 		 	 State of New York

		 		 		 	 Commission Expires April 6, 2006

  

 15 

 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
	 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	  	$72,000,000
	 Twenty-Seventh
	  	January 1, 1994	  	25	  	Secured Medium-
Term Notes,
Series B
($250,000,000
authorized)	 	161,000,000	  	31,000,000
	 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	  	150,000,000
	 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	  	88,850,000
	 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	  	350,000,000
	 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	 	150,000,000	  	150,000,000

 EXHIBIT B 
 FILING AND RECORDING OF 
 THIRTY-NINTH SUPPLEMENTAL INDENTURE 
 FILING IN STATE OFFICES 
  

							
	 State
	  	Office of	  	Date	  	 Financing Statement
 Document Number

	 Washington
	  	Secretary of State	  	12/29/05	  	2005-364-1506-8
	 Idaho
	  	Secretary of State	  	12/29/05	  	B2005-0997695-2
	 Montana
	  	Secretary of State	  	12/29/05	  	85637837
	 Oregon
	  	Secretary of State	  	12/29/05	  	7134721

  

													
	RECORDING IN COUNTY OFFICES
	 County
	  	Office of	  	Real Estate Mortgage Records	  	 Financing
 Statement
 Document
 Number

	  	  	 	  	Date	  	Document
Number	  	Book	  	Page	  	 
	 Washington
 Adams
	  	Auditor	  	12/28/05	  	279806	  	N/A	  	N/A	  	N/A
	 Asotin
	  	Auditor	  	12/28/05	  	288484	  	N/A	  	N/A	  	N/A
	 Benton
	  	Auditor	  	12/28/05	  	2005-044447	  	N/A	  	N/A	  	N/A
	 Douglas
	  	Auditor	  	12/29/05	  	3093305	  	N/A	  	N/A	  	N/A
	 Ferry
	  	Auditor	  	12/28/05	  	264226	  	N/A	  	N/A	  	N/A
	 Franklin
	  	Auditor	  	12/28/05	  	1675439	  	N/A	  	N/A	  	N/A
	 Garfield
	  	Auditor	  	12/28/05	  	20059619	  	N/A	  	N/A	  	N/A
	 Grant
	  	Auditor	  	12/29/05	  	1182905	  	N/A	  	N/A	  	N/A
	 Klickitat
	  	Auditor	  	12/30/05	  	1059170	  	N/A	  	N/A	  	N/A
	 Lewis
	  	Auditor	  	12/29/05	  	3240934	  	N/A	  	N/A	  	N/A
	 Lincoln
	  	Auditor	  	12/28/05	  	20050439140	  	89	  	2446	  	N/A
	 Pend Oreille
	  	Auditor	  	12/28/05	  	20050285013	  	N/A	  	N/A	  	N/A
	 Skamania
	  	Auditor	  	12/30/05	  	2005160050	  	N/A	  	N/A	  	N/A
	 Spokane
	  	Auditor	  	12/29/05	  	5324706	  	N/A	  	N/A	  	N/A
	 Stevens
	  	Auditor	  	12/28/05	  	2005-0016334	  	339	  	3508	  	N/A
	 Thurston
	  	Auditor	  	1/3/06	  	3797611	  	N/A	  	N/A	  	N/A
	 Whitman
	  	Auditor	  	12/28/05	  	668529	  	N/A	  	N/A	  	N/A
	 Idaho
 Benewah
	  	Recorder	  	12/28/05	  	241066	  	N/A	  	N/A	  	N/A
	 Bonner
	  	Recorder	  	12/29/05	  	695305	  	N/A	  	N/A	  	N/A
	 Boundary
	  	Recorder	  	12/28/05	  	224402	  	N/A	  	N/A	  	N/A
	 Clearwater
	  	Recorder	  	12/28/05	  	201373	  	N/A	  	N/A	  	N/A
	 Idaho
	  	Recorder	  	12/28/05	  	445810	  	N/A	  	N/A	  	N/A

													
	RECORDING IN COUNTY OFFICES
	 County
	  	Office of	  	Real Estate Mortgage Records	  	 Financing
 Statement
 Document
 Number

	  	  	 	  	Date	  	Document
Number	  	Book	  	Page	  	 
	 Kootenai
	  	Recorder	  	12/29/05	  	2004597	  	N/A	  	N/A	  	N/A
	 Latah
	  	Recorder	  	12/28/05	  	501824	  	N/A	  	N/A	  	N/A
	 Lewis
	  	Recorder	  	1/3/06	  	133029	  	N/A	  	N/A	  	N/A
	 Nez Perce
	  	Recorder	  	12/28/05	  	725879	  	N/A	  	N/A	  	N/A
	 Shoshone
	  	Recorder	  	12/28/05	  	428231	  	N/A	  	N/A	  	N/A
	 Montana
 Big Horn
	  	Clerk &
Recorder	  	12/29/05	  	334151	  	85	  	190	  	N/A
	 Broadwater
	  	Clerk &
Recorder	  	12/30/05	  	152259	  	90	  	553	  	N/A
	 Golden Valley
	  	Clerk &
Recorder	  	12/30/05	  	78648	  	M	  	12313	  	N/A
	 Meagher
	  	Clerk &
Recorder	  	12/30/05	  	115335	  	F63	  	738	  	N/A
	 Mineral
	  	Clerk &
Recorder	  	12/29/05	  	98861	  	N/A	  	N/A	  	N/A
	 Rosebud
	  	Clerk &
Recorder	  	12/30/05	  	98937	  	113	  	831	  	N/A
	 Sanders
	  	Clerk &
Recorder	  	12/29/05	  	52783	  	N/A	  	N/A	  	N/A
	 Stillwater
	  	Clerk &
Recorder	  	1/3/06	  	325109	  	N/A	  	N/A	  	N/A
	 Treasure
	  	Clerk &
Recorder	  	12/29/05	  	79407	  	17	  	707	  	N/A
	 Wheatland
	  	Clerk &
Recorder	  	12/29/05	  	103573	  	M	  	16861	  	N/A
	 Yellowstone
	  	Clerk &
Recorder	  	1/19/06	  	3364267	  	N/A	  	N/A	  	N/A
	 Oregon
 Douglas
	  	Recorder	  	12/29/05	  	2005-032359	  	N/A	  	N/A	  	N/A
	 Jackson
	  	Recorder	  	12/30/05	  	2005-078780	  	N/A	  	N/A	  	N/A
	 Josephine
	  	Recorder	  	12/29/05	  	2005-030457	  	N/A	  	N/A	  	N/A
	 Klamath
	  	Recorder	  	1/3/06	  	N/A	  	M06	  	00034	  	N/A
	 Morrow
	  	Recorder	  	12/29/05	  	05-015650	  	N/A	  	N/A	  	N/A
	 Union
	  	Recorder	  	12/29/05	  	20056954	  	N/A	  	N/A	  	N/A
	 Wallowa
	  	Recorder	  	12/29/05	  	05-054734	  	N/A	  	N/A	  	N/A

 EXHIBIT C 
 PROPERTY ADDITIONS 
 First 
 AN ADDITIONAL ELECTRIC SUBSTATION AND SUBSTATION
SITE OF THE COMPANY, in the State of Idaho, including all buildings, structures, towers, poles equipment appliances and devices for transforming, converting and distributing electric
energy, and the lands of the company on which the same are situated and all of the company’s real estate and interests therein, machinery, equipment, appliances, devices, appurtenances and supplies, franchises, permits and other rights and
other property forming a part of said substation or any of them, or used or enjoyed or capable of being used or enjoyed in connection with any thereof, including, but not limited to, the following situated in the State of Idaho, to wit: 

Kootenai County, Idaho: “Avondale 115kV Substation”; Property No. ID-K-032; Grantor: Walter M. Sims, Trustee of the Walter M. Sims Intervivos
Trust; Ptn of NE/4 in Section 11, Township 51 North, Range 4 West, B.M. 
 Second 
 BUSINESS OFFICE AND MISCELLANEOUS REAL ESTATE, in the State of
Washington, to wit: 
 Spokane County, Washington: “Avista Headquarters”; Property No. WA-32-001; Grantor: IRE-WWP, Inc.; Ptn of
Block 3 and all of Blocks 14, 15, Ross Park; Ptn Lots 3, 4, 5, 6 7 & 8, Subdivision of Block 4, Ross Park; Lots 1, 2, 3, 4, 5, 6 & 7, Block 1 and Lots 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 & 14, Block 2, Robert’s Sub of
Block 16, Ross Park; Ptn Lots 1 & 6, all of Lots 2, 3, 4 & 5, Forester’s Sub of Block 17, Ross Park; and Ptn of Lots 17 & 18, Ross Sub of Block 18, Ross Park; all in the SW/4 of Section 9, Township 25 North, Range 43 East,
W.M. 
  

 C-1 

 Third 
 ADDITIONAL PROTECTION, MITIGATION AND ENHANCEMENT PROPERTY of the Company, in the States of Idaho and Montana, real, personal,
or mixed, acquired, constructed and/or installed in, on, under and/or proximate to the Company’s Clark Fork hydroelectric development (including, without limitation, the Cabinet Gorge Hydroelectric Generating Station and the Noxon Rapids
Hydroelectric Generating Station) for the purpose of protecting and/or enhancing wildlife (including fish and aquatic life), botanical life and/or wetlands, and/or mitigating any harm or damage thereto, and all other property, real, personal or
mixed, used or enjoyed or capable of being used or enjoyed in conjunction therewith, including, but not limited to, the following in the States of Idaho and Montana, to wit: 
  

	 	1.	Bonner County, Idaho: “Cabinet Gorge Mitigation”; Property No. ID-7B-251; Grantor: Thelma L. Nyby; Lots 1-3, Block 9, Granite Creek Properties, Unit 2 in Section 26,
Township 55 North, Range 1 West, B.M. 

  

	 	2.	Sanders County, Montana: “Noxon Rapids Mitigation”; Property No. MT-35-252; Grantor: Framing Systems, Inc.; Lots 24, 25, 26 and 41, Steep River Ranch, a subdivision in S/2
of Section 2, and N/2 of Section 11; all in Township 22 North, Range 30 West, M.P.M. 

  

 C-2 

 EXHIBIT D 
 (Form of Bond) 
 This bond is non-transferable, except to a successor 
 Administrative Agent under the Credit Agreement referred to herein. 
 AVISTA CORPORATION 
 First Mortgage Bond, 
 Collateral Series due 2011 
  

			
	 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 Administrative Agent under the Credit Agreement hereinafter
referred to or registered assigns, on April 5, 2011, 
 DOLLARS 
 and to pay the registered owner hereof interest thereon from April 6, 2006 in arrears on March 31, June 30, September 30 and December 31 of each year, commencing June 30, 2006
(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 Fortieth 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 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 due 2011 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 

  

 D-1 

 
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 (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 Fortieth Supplemental Indenture, dated as of April 1, 2006 (the “Fortieth 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. If there shall be a conflict between the terms of this bond and the provisions of
the Mortgage, the provisions of the Mortgage shall control to the extent permitted by law. 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 The Bank of New York, as Administrative Agent under the Credit Agreement (as such terms are
defined in the Fortieth Supplemental Indenture) in order to provide the benefit of the lien of the Mortgage as security for the obligation of the Company under the Credit Agreement to pay the Obligations (as so defined), 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 Credit Agreement, and
further upon the condition that, in accordance with the terms of the Credit Agreement, the Commitments (as defined in the Fortieth Supplemental Indenture) shall have been or shall have terminated and any Loans (as so defined) outstanding shall have
been declared to be or shall have otherwise become due and payable immediately and the Administrative Agent shall have delivered to the Company a notice demanding redemption of 

  

 D-2 

 
the bonds of this series which notice states that it is being delivered pursuant to Article VII of the Credit Agreement, (B) the occurrence of an Event
of Default under clause (g) or (h) of Article VII of the Credit Agreement, and (C) April 5, 2011, then all bonds of this series shall be redeemed or paid immediately at the principal amount thereof plus accrued interest to the
date of redemption or payment. 
 The obligation of the Company to pay the accrued interest on bonds of this series on any Interest Payment
Date prior to Maturity (a) shall be deemed to have been satisfied and discharged in full in the event that all amounts then due in respect of the Obligations shall have been paid or (b) shall be deemed to remain unsatisfied in an amount
equal to the aggregate amount then due in respect of the Obligations and remaining unpaid (not in excess, however, of the amount otherwise then due in respect of interest on the bonds of this series). 
 The obligation of the Company to pay the principal of and accrued interest on bonds of this series at or after Maturity (x) shall be deemed to have
been satisfied and discharged in full in the event that all amounts then due in respect of the Obligations shall have been paid or (y) shall be deemed to remain unsatisfied in an amount equal to the aggregate amount then due in respect of the
Obligations and remaining unpaid (not in excess, however, of the amount otherwise then due in respect of principal of and accrued interest on the bonds of this series). 
 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
Commitments (as defined in the Fortieth Supplemental Indenture), 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 

  

 D-3 

 
certain circumstances, of all of the obligations of the Company under the Mortgage and on the bonds secured thereby. 
 This bond is non-transferable except as required to effect transfer to any successor administrative agent under the Credit Agreement, any such transfer
to be made at the office or agency of the Company in the Borough of Manhattan, The City of New York, upon surrender and cancellation of this bond, together with a written instrument of transfer whenever required by the Company duly executed by the
registered owner or by its duly authorized attorney, and, thereupon, a new fully registered bond of the same series for a like principal amount will be issued to the transferee in exchange herefor as provided in the Mortgage. The Company and the
Trustee may deem and treat the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment and for all other purposes. 
 In the manner prescribed in the Mortgage, any bonds of this series, upon surrender thereof for cancellation at the office or agency of the Company in the Borough of Manhattan, The City of New York, are exchangeable
for a like aggregate principal amount of bonds of the same series of other authorized denominations. 
 No recourse shall be had for the
payment of the principal of or interest on this bond against any incorporator or any past, present or future subscriber to the capital stock, stockholder, officer or director of the Company or of any predecessor or successor corporation, as such,
either directly or through the Company or any predecessor or successor corporation, under any rule of law, statute or constitution or by the enforcement of any assessment or otherwise, all such liability of incorporators, subscribers, stockholders,
officers and directors being released by the holder or owner hereof by the acceptance of this bond and being likewise waived and released by the terms of the Mortgage. 
 This bond shall not become obligatory until Citibank, N.A., the Trustee under the Mortgage, or its successor thereunder, shall have signed the form of certificate endorsed hereon. 
 IN WITNESS WHEREOF, AVISTA CORPORATION has caused this bond to be signed in its corporate name by its President or one of its Vice Presidents by
his signature or a facsimile thereof, and its corporate seal to be impressed or imprinted hereon and attested by its Corporate Secretary or one of its Assistant Corporate Secretaries by his signature or a facsimile thereof. 
  

									
	 Dated:
	 		 	 AVISTA CORPORATION

					
		 		 		 	 By:
	 	  
					
	 ATTEST:
	 	  	 		 		 	

  

 D-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 Officer

  

 D-5 

 ASSIGNMENT 
 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.

  

 D-6

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