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Exhibit 4.4(e)    
  

 
 

LOAN AGREEMENT    
    
    between
    CITY OF FORSYTH, ROSEBUD COUNTY, MONTANA
    and
    THE MONTANA POWER COMPANY    
  

Dated
as of May 1, 1993 

Relating
to 

Pollution
Control Revenue Refunding Bonds

(The Montana Power Company Colstrip Project)

Series 1993A 

        The
amounts payable by The Montana Power Company to the City of Forsyth, Rosebud County, Montana, under Sections 4.04 and 9.01 of this
Loan Agreement and on the First Mortgage Bonds delivered by such Company pursuant to this Loan Agreement, together with certain other amounts payable by such Company under this Loan Agreement and
certain other rights of such City under this Loan Agreement, have been pledged and assigned to The First National Bank of Chicago, as trustee under the Indenture of Trust, dated as of May 1,
1993, of such City to such Trustee. For the purpose of perfecting the security interest of such Trustee in such amounts payable and such rights assigned to such Trustee, under the Montana Uniform
Commercial Code—Secured Transactions or otherwise, the counterpart of this Loan Agreement and the First Mortgage Bonds delivered, pledged and assigned to such Trustee shall be deemed the
originals thereof. 

  

 
 

TABLE OF CONTENTS    
  

	 
	 	 
	 	 
	 	Page

	ARTICLE I    DEFINITIONS	 	2
	 	 	Section 1.01.	 	Definitions	 	2
	

ARTICLE II    REPRESENTATIONS AND WARRANTIES	
 	

2
	 	 	Section 2.01.	 	Representations and Warranties of the Issuer	 	2
	 	 	Section 2.02.	 	Representations and Warranties of the Company	 	2
	

ARTICLE III    THE FACILITIES	
 	

4
	 	 	Section 3.01.	 	Maintenance of Facilities	 	4
	 	 	Section 3.02.	 	Facilities Insurance	 	4
	 	 	Section 3.03.	 	Condemnation	 	4
	 	 	Section 3.04.	 	Termination of Operation	 	4
	

ARTICLE IV    ISSUANCE OF THE BONDS; THE LOAN; DISPOSITION OF PROCEEDS OF THE BONDS; LOAN PAYMENTS	
 	

4
	 	 	Section 4.01.	 	Issuance of the Bonds	 	4
	 	 	Section 4.02.	 	Issuance of Other Obligations	 	5
	 	 	Section 4.03.	 	The Loan; Disposition of Bond Proceeds; Refunding of Prior Bonds	 	5
	 	 	Section 4.04.	 	Loan Repayments	 	5
	

ARTICLE V    THE FIRST MORTGAGE BONDS; OTHER OBLIGATIONS	
 	

6
	 	 	Section 5.01.	 	Issuance, Delivery and Surrender of First Mortgage Bonds	 	6
	 	 	Section 5.02.	 	Payments Assigned; Obligation Absolute	 	6
	 	 	Section 5.03.	 	Payment of Expenses	 	7
	 	 	Section 5.04.	 	Indemnification	 	7
	 	 	Section 5.05.	 	Payment of Taxes; Discharge of Liens	 	7
	

ARTICLE VI    SPECIAL COVENANTS	
 	

8
	 	 	Section 6.01.	 	Maintenance of Existence	 	8
	 	 	Section 6.02.	 	Permits or Licenses	 	8
	 	 	Section 6.03.	 	Issuer's Access to Facilities	 	8
	 	 	Section 6.04.	 	Arbitrage and Tax Exemption Certifications and Covenants	 	9
	 	 	Section 6.05.	 	Use of Facilities	 	9
	 	 	Section 6.06.	 	Financing Statements	 	9
	

ARTICLE VII    ASSIGNMENT	
 	

9
	 	 	Section 7.01.	 	Conditions	 	9
	 	 	Section 7.02.	 	Instruments Furnished to Trustee	 	10
	 	 	Section 7.03.	 	Limitation	 	10
	

ARTICLE VIII    EVENTS OF DEFAULT AND REMEDIES	
 	

10
	 	 	Section 8.01.	 	Events of Default	 	10
	 	 	Section 8.02.	 	Force Majeure	 	10
	 	 	Section 8.03.	 	Remedies	 	10
	 	 	Section 8.04.	 	No Remedy Exclusive	 	11
	 	 	Section 8.05.	 	Reimbursement of Attorneys' Fees	 	11
	 	 	Section 8.06.	 	Waiver of Breach	 	11
	 	 	Section 8.07.	 	No Liability of Issuer	 	11

i

 

	

ARTICLE IX    REDEMPTION OF BONDS	
 	

11
	 	 	Section 9.01.	 	Redemption of Bonds	 	11
	 	 	Section 9.02.	 	Compliance with the Indenture	 	12
	

ARTICLE X    MISCELLANEOUS	
 	

12
	 	 	Section 10.01.	 	Term of Loan Agreement	 	12
	 	 	Section 10.02.	 	Notices	 	12
	 	 	Section 10.03.	 	Parties in Interest	 	12
	 	 	Section 10.04.	 	Amendments	 	12
	 	 	Section 10.05.	 	Counterparts	 	12
	 	 	Section 10.06.	 	Severability	 	12
	 	 	Section 10.07.	 	Governing Law	 	12
	

Exhibit A. Colstrip Units 1, 2, 3 and 4 Pollution Control Facilities	
 	

A-I

ii

 
 

LOAN AGREEMENT    
  

        THIS LOAN AGREEMENT, dated as of May 1,1993, between the CITY OF
FORSYTH, ROSEBUD COUNTY, MONTANA, a municipal corporation and political subdivision organized and existing under the
Constitution and laws of the State of Montana (the "Issuer"), and THE MONTANA POWER COMPANY, a corporation organized and existing under the laws of the
State of Montana (the "Company"), 

WITNESSETH  

        WHEREAS, the Issuer is authorized by the provisions of the Act (as hereinafter defined) to issue one or more
series of its revenue bonds and to loan the proceeds to others for the purpose of defraying the cost of acquiring or improving projects consisting of land, any building or other improvement, and any
other real and personal properties deemed necessary in connection therewith, whether or not now in existence, whether located within or without the boundaries of the Issuer, which shall be suitable
for, among other things, air and water pollution control facilities and sewage and solid waste disposal facilities; 

        WHEREAS, the Issuer is authorized by the provisions of the Act to issue one or more series of its revenue refunding bonds to refund
revenue bonds issued under the provisions of the Act; 

        WHEREAS, the Act provides that payment of principal of and interest on revenue bonds issued thereunder shall be secured by a pledge of the
revenues out of which such revenue bonds shall be payable and may be secured by a pledge of an agreement relating to a project and such other security device as may be deemed most advantageous by the
Issuer; 

        WHEREAS, the County (as hereinafter defined) has heretofore issued and sold (a) $20,000,000 of Pollution Control Revenue Bonds (The
Montana Power Company Project) Series 1973, of which $18,545,000 will be outstanding on the date of the authentication and delivery of the Bonds (as hereinafter defined), and
(b) $7,000,000 of Pollution Control Revenue Bonds (The Montana Power Company Project) Series 1977, all of which will be outstanding on the date of the authentication and delivery of the
Bonds, and the Issuer has heretofore issued and sold (c) $39,660,000 of Collateralized Variable Rate Pollution Control Revenue Bonds (The Montana Power Company Colstrip Project),
Series 1984B, all of which will be outstanding on the date of the authentication and delivery of the Bonds, and (d) $25,000,000 of Adjustable Rate Pollution Control Revenue Bonds (The
Montana Power Company Colstrip Project), Series 1984, all of which will be outstanding on the date of the
authentication and delivery of the Bonds (collectively, the "Prior Bonds"), for the purpose of either financing or refinancing the cost to the Company of acquiring and improving the Facilities (as
hereinafter defined); 

        WHEREAS, the Issuer, by resolution adopted pursuant to and in accordance with the Act, has authorized and undertaken to issue the Bonds
(as hereinafter defined) for the purpose of refunding the Prior Bonds; 

        WHEREAS, the Issuer has agreed under this Loan Agreement to lend to the Company the proceeds (other than accrued interest, if any) from
the sale of the Bonds for the purpose of refunding the Prior Bonds; 

        WHEREAS, the Company has agreed under this Loan Agreement to make payments sufficient to pay when due (whether at stated maturity, by
acceleration or otherwise) the principal of, and premium, if any, and interest, on the Bonds; and 

        WHEREAS, the Company has issued and delivered the Company's First Mortgage Bonds (as hereinafter defined) to the Trustee (as hereinafter
defined) to provide for the payment of certain of its obligations hereunder; 

 

        NOW, THEREFORE, the parties hereto, intending to be legally bound hereby and in consideration of the premises, do hereby agree as follows: 

 
 

ARTICLE I    
    
    DEFINITIONS    
  

        Section 1.01. Definitions.    The terms defined in Article I of the Indenture of Trust between the City of
Forsyth, Rosebud County, Montana, and The First National Bank of Chicago, a national banking association, as Trustee, dated as of May 1, 1993, shall, for all purposes of this Loan Agreement,
have the meanings specified therein, unless the context clearly requires otherwise. 

 
 

ARTICLE II    
    
    REPRESENTATIONS AND WARRANTIES    
  

        Section 2.01. Representations and Warranties of the Issuer.    The Issuer represents, warrants and agrees that: 

        (a)  The
Issuer is a municipal corporation and political subdivision duly organized and existing under the Constitution and laws of the State of Montana. 

        (b)  The
Issuer has the power to enter into this Loan Agreement and the Indenture and to perform and observe the agreements and covenants on its part contained herein and
therein, including without limitation the power to issue and sell the Bonds as contemplated herein and in the Indenture, and by proper corporate action has duly authorized the execution and delivery
hereof and thereof. 

        (c)  The
execution and delivery of this Loan Agreement and the Indenture by the Issuer do not, and consummation of the transactions contemplated hereby and thereby and
fulfillment of the terms hereof and thereof by the Issuer will not, result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Issuer is now a party or by which it is now bound, or any order, rule or regulation applicable to the Issuer of any Court or of any regulatory body or
administrative agency or other governmental body having jurisdiction over the Issuer or over any of its properties, or any statute of any jurisdiction applicable to the Issuer. 

        (d)  The
Issuer has not assigned and will not assign its interest in this Loan Agreement other than to secure the Bonds. 

        (e)  The
public hearing and approval requirements of Section 147(f) of the Code have been satisfied. 

        Section 2.02. Representations and Warranties of the Company.    The Company represents, warrants and agrees that: 

        (a)  The
Company is a corporation duly organized and existing in good standing under the laws of the State of Montana. 

        (b)  The
Company has the power to enter into this Loan Agreement and to perform and observe the agreements and covenants on its part contained herein, including without
limitation the power to issue and deliver the First Mortgage Bonds as contemplated herein, in the Mortgage and in the Bond Delivery Agreement, and by proper corporate action has duly authorized the
execution and delivery hereof. 

        (c)  The
execution and delivery of this Loan Agreement by the Company do not, and consummation of the transactions contemplated hereby and fulfillment of the terms hereof by
the Company, including, without limitation, the issuance and delivery of the First Mortgage Bonds and the 

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execution and delivery of the Bond Delivery Agreement, will not, result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is a party or by which it is now bound, or the Restated Articles of Incorporation, as amended, or the Bylaws of the Company, or any order, rule or
regulation applicable to the Company of any court or of any regulatory body or administrative agency or other governmental body having jurisdiction over the Company or over any of its properties, or
any statute of any jurisdiction applicable to the Company. 

        (d)  The
Montana Public Service Commission has approved all of the transactions contemplated by this Loan Agreement which require its approval, and no other consent,
approval, authorization or other order of any governmental body is required for the Company's participation therein, except such as may have been obtained or may be required under the securities laws
of any jurisdiction. 

        (e)  The
information relating to the Facilities (other than estimates) furnished by the Company in writing to Chapman and Cutler, as Bond Counsel, in connection with the
issuance by the Issuer of the Prior Bonds and the Bonds, was, at the time furnished, and remains, to the Company's knowledge, true and correct. 

        (f)    The
Facilities consist of those facilities described in Exhibit A hereto and are (i) designed to meet applicable Federal, state and local requirements for
the control of pollution or the disposal of solid waste, (ii) to be used solely for purposes contemplated by the Act, and (iii) located within Rosebud County, Montana. 

        (g)  The
Montana Department of Health and Environmental Sciences has certified that the pollution control facilities constituting part of the Facilities, as designed, are in
furtherance of the purpose of abating or controlling atmospheric pollutants or contaminants, and water pollution, as the case may be. 

        (h)  No
construction, reconstruction or acquisition (within the meaning of the Code) of any of the Facilities was commenced with respect to any portion of the Project prior
to the taking of official action by the Issuer with respect thereto and the Facilities have been placed in service. 

        (i)    The
Company has received an executed counterpart of the Indenture and consents to and approves the provisions thereof. 

        (j)    To
the Company's knowledge, (i) the Indenture of Trust, dated as of June 1, 1973, from the County to First Interstate Bank of Commerce, Billings, Montana
(formerly, Security Trust & Savings Bank), as trustee, as amended and supplemented by a First Supplemental Indenture of Trust, dated as of June 1, 1977, from the County to Security Bank,
N.A. (formerly, Security Trust and Savings Bank), as trustee, (ii) the Equipment Lease, dated as of June 1, 1973, between the Company and Puget Sound Power and Light Company, as lessors,
and the County, as lessee, as amended and supplemented by a First Supplemental Equipment Lease, dated as of June 1, 1977, between such lessors and such lessee, (iii) the Sublease
Agreement, dated as of June 1, 1973, between the County, as sublessor, and the Company and Puget Sound Power & Light Company, as sublessees, as amended and supplemented by a First
Supplemental Sublease Agreement, dated as of June 1, 1977, between such sublessor and such sublessees, (iv) the Indenture of Trust, dated as of January 1, 1984, from the Issuer to
Chemical Bank, as trustee, as amended and supplemented by a First Supplemental Indenture of Trust, dated as of June 1, 1988, and a Second Supplemental Indenture of Trust, dated as of
July 1, 1988, (v) the Loan Agreement, dated as of January 1, 1984, between the Issuer and the Company, as amended and supplemented by a First Supplemental Loan Agreement, dated as
of June 1, 1988, and a Second Supplemental Loan Agreement, dated as of July 1, 1988, (vi) the Indenture of Trust, dated as of August 1, 1984, from the Issuer to Chemical
Bank, as trustee, as amended and supplemented by a First Supplemental Indenture of Trust, dated as of November 1, 1990, and (vii) the Loan Agreement, dated as of August 1, 1984,
between the Issuer and the Company, pursuant to which the Prior Bonds were 

3

 

issued and sold and are outstanding, are in full force and effect, without further amendment, and no event has occurred and is continuing under the provisions of any of such instruments which event
now constitutes, or with the lapse of time or the giving of notice, or both, would constitute, an event of default thereunder. 

 
 

ARTICLE III    
    
    THE FACILITIES    
  

        Section 3.01. Maintenance of Facilities.    The Company shall at all times exercise all of its rights, powers, elections
and options under the Inter-Company Agreements to cause the Facilities, and every element and unit thereof, to be maintained in good repair, working order and condition; provided, however, that the
Company may cause the discontinuance of the operation or a reduction in the capacity of the Facilities, or any element or unit thereof, if, in the judgment of the Company, it is no longer economic to
operate the same or to operate the same at its former capacity, or if the Company intends to sell and dispose of its interest in the same and within a reasonable time shall endeavor to effectuate such
sale or disposition. 

        The
Company may, at its own expense, exercise any of its rights, powers, elections and options under the Inter-Company Agreements to cause the Facilities to be remodeled or cause such
substitutions, modifications and improvements to be made to the Facilities from time to time as it, in its discretion, may deem to be desirable for its uses and purposes, which remodeling,
substitutions, modifications and improvements shall be included under the terms of this Loan Agreement as part of the Facilities; provided, however, that the Company shall not exercise any such right,
power, election or option if the proposed remodeling, substitution, modification or improvement would adversely affect the exclusion of interest on the Bonds from the gross income of Owners thereof
for Federal income tax purposes. 

        Section 3.02. Facilities Insurance.    The Company shall exercise all its rights and powers and will perform all of its
duties under the Inter-Company Agreements to cause insurance to be taken out and continuously maintained in effect with respect to the Facilities against such risks and to such extent as is required
by the Inter-Company Agreements. All proceeds of such insurance shall be for the account of the Company to the extent of the interest of the Company in the Facilities. 

        Section 3.03. Condemnation.    The Company shall be entitled to the proceeds of any condemnation award or portion thereof
made for damage to or taking of the Facilities or other property of the Company, to the extent of the interest of the Company in the Facilities or such other property, as the case may be. 

        Section 3.04. Termination of Operation.    Anything in this Loan Agreement to the contrary notwithstanding, the Company
shall have the right at any time to cause the operation of the Facilities to be terminated if the Company shall have determined that the continued operation of the Project or the Facilities is
uneconomical for any reason. 

 
 

ARTICLE IV    
    
    ISSUANCE OF THE BONDS; THE LOAN; DISPOSITION
  OF PROCEEDS OF THE BONDS; LOAN PAYMENTS    
  

        Section 4.01. Issuance of the Bonds.    The Issuer shall issue and sell the Bonds under and in accordance with the
Indenture and the bond purchase agreement between the Issuer and the initial purchasers of the Bonds. The Company hereby approves the issuance and sale of the Bonds as aforesaid. 

4

 

        Section 4.02. Issuance of Other Obligations.    The Issuer and the Company expressly reserve the right to enter into, to
the extent permitted by law, an agreement or agreements other than this Loan Agreement with respect to the issuance by the Issuer, under an indenture or indentures other than the Indenture, of
obligations to provide funds to defray any additional costs of construction of the Facilities or to refund any or all of the Bonds. 

        Section 4.03. The Loan; Disposition of Bond Proceeds; Refunding of Prior Bonds.    (a) The Issuer shall lend to the
Company the proceeds of the issuance and sale of the Bonds, other than accrued interest, if any, paid by the initial purchasers thereof, for the purposes specified in this Loan Agreement, such
proceeds to be applied as provided hereinafter and in the Indenture. 

        (b)  The
Issuer and the Company shall cause the proceeds of the Bonds, other than accrued interest, if any, paid by the initial purchasers thereof, to be deposited with the
Trustee and immediately thereafter transferred by the Trustee to the trustees under the indentures pursuant to which the Prior Bonds have been issued as follows: 

(i)  $24,417,437.50
with First Interstate Bank of Commerce, Billings, Montana (formerly, Security Bank, N.A.), as trustee under an Indenture of Trust, dated as of June 1, 1973, from
Rosebud County, Montana, to Security Trust & Savings Bank, Billings, Montana, as trustee, as amended and supplemented by a First Supplemental Indenture of Trust, dated as of June 1,
1977, from Rosebud County, Montana, to Security Bank, N.A., Billings, Montana (formerly, Security Trust & Savings Bank), as trustee, for the purpose of redeeming $18,545,000 of Rosebud County,
Montana, Pollution Control Revenue Bonds (The Montana Power Company Project) Series 1973 and $7,000,000 of Rosebud County, Montana, Pollution Control Revenue Bonds (The Montana Power Company
Project) Series 1977; 

(ii)  $39,660,000
with Chemical Bank, as trustee under an Indenture of Trust, dated as of January 1, 1984, from the Issuer, to Chemical Bank, as trustee, for the purpose of
redeeming $39,660,000 of the Issuer's Collateralized Variable Rate Pollution Control Revenue Bonds (The Montana Power Company Colstrip Project), Series 1984B, pursuant to a letter agreement,
dated as of May 27, 1993, among Chemical Bank, as trustee, the Issuer, Union Bank of Switzerland, Morgan Guaranty Trust Company of New York and the Company; and 

(iii)  $25,000,000
with Chemical Bank, as trustee under an Indenture of Trust, dated as of August 1, 1984, from the Issuer to Chemical Bank, as trustee, as amended and supplemented
by a First Supplemental Indenture of Trust, dated as of June 1,1988, and a Second Supplemental Indenture of Trust, dated as of July 1,1988, for the purpose of redeeming $25,000,000 of
the Issuer's Adjustable Rate Pollution Control Revenue Bonds (The Montana Power Company Colstrip Project), Series 1984, pursuant to a letter agreement, dated as of May 27, 1993, among
Chemical Bank, as trustee, the Issuer, Union Bank of Switzerland, Morgan Guaranty Trust Company of New York and the Company. 

        Because
such Bond proceeds will not be sufficient to effect the redemption of the Prior Bonds, the Company, simultaneously with the transfer of such proceeds referred to in the preceding
sentence and at its own expense and without any right of reimbursement in respect thereof, shall pay to such trustees for deposit into the bond fund under the respective indentures, all amounts
necessary to effect the redemption of each series of the Prior Bonds. 

        The
Issuer shall establish the Bond Fund with the Trustee in accordance with Section 4.01 of the Indenture. The proceeds of the issuance and sale of the Bonds constituting accrued
interest, if any, paid by the initial purchasers thereof shall be deposited into the Bond Fund. 

        Section 4.04. Loan Repayments.    (a) As and for repayment of the Loan made to the Company by the Issuer pursuant to
Section 4.03 hereof, the Company shall pay to the Trustee for the account of the Issuer an amount equal to the aggregate principal amount of, and the premium, if any, on the Bonds 

5

 

from time to time Outstanding and, as interest on its obligation to pay such amount, an amount equal to interest on the Bonds, such amounts to be paid in installments of immediately available funds
due on the dates, in the amounts and in the manner provided in the Indenture for the payment of the principal of, and premium, if any, and interest on, the Bonds whether at maturity, upon redemption
or otherwise; provided, however, that the obligation of the Company to make any such payment hereunder shall be reduced by the amount of any reduction under the Indenture of the amount of the
corresponding deposit into the Bond Fund required to be made by the Issuer pursuant to Section 2.10 thereof. 

        (a)  In
the event the Company shall fail to make any payment required by Section 4.04(a) with respect to the principal of, or premium, if any, or interest on, any
Bond, the payment so in default shall continue
as an obligation of the Company until the amount in default shall have been fully paid and the Company will pay interest on any overdue amount with respect to principal of such Bond and, to the extent
permitted by law, on any overdue amount with respect to premium, if any, and interest on such Bond, at the interest rate borne by such Bond until paid. 

 
 

ARTICLE V    
    
    THE FIRST MORTGAGE
  BONDS; OTHER OBLIGATIONS    
  

        Section 5.01. Issuance, Delivery and Surrender of First Mortgage Bonds.    To provide for the payment of the obligation
of the Company pursuant to Section 4.04 hereof, concurrently with the issuance and delivery by the Issuer of the Bonds, the Company shall issue and deliver to the Trustee its First Mortgage
Bonds as provided in the Bond Delivery Agreement (i) maturing on the same date and in the same principal amount as the Bonds, (ii) bearing interest at the same rate and payable at the
same times as interest shall be payable on the Bonds and (iii) containing redemption provisions correlative to the provisions of Section 3.01(c) of the Indenture. The First Mortgage
Bonds shall be delivered to and registered in the name of the Trustee (or, subject to Section 6.11 of the Indenture, the Trustee's nominee) for the benefit of the Owners from time to time of
the Bonds and shall be held, voted, transferred and surrendered by the Trustee subject to and in accordance with the respective provisions of the Indenture and the Bond Delivery Agreement. 

        Section 5.02. Payments Assigned; Obligation Absolute.    It is understood and agreed that all payments to be made by the
Company hereunder (except for payments made pursuant to Sections 5.03, 5.04, 6.04 and 8.05 hereof) are, by the Indenture, pledged and assigned by the Issuer to the Trustee, and that all rights and
interest of the Issuer hereunder (except for the Issuer's rights under Sections 5.03, 5.04, 6.04 and 8.05 hereof and any rights of the Issuer to receive notices, certificates, requests, requisitions,
directions and other communications hereunder) are, by the Indenture, pledged and assigned to the Trustee. The Company assents to such pledge and assignment. The obligation of the Company to make the
payments hereunder shall be absolute, irrevocable and unconditional and shall not be subject to cancellation, termination or abatement, or to any defense other than payment or to any right of
set-off, counterclaim or recoupment arising out of any breach under this Loan Agreement, the Indenture or otherwise by the Issuer or the Trustee or any other party, or out of any
obligation or liability at any time owing to the Company by the Issuer, the Trustee or any other party, and, further, the payments hereunder shall continue to be payable at the times and in the
amounts herein specified, whether or not the Facilities or the Project, or any portion thereof, shall have been destroyed by fire or other casualty, or title thereto, or the use thereof, shall have
been taken by the exercise of the power of eminent domain, and, further, there shall be no abatement of or diminution in any such payments by reason thereof, whether or not the Facilities or the
Project shall be used or useful, whether or not any applicable laws, regulations or standards shall prevent or prohibit the use of the Facilities or the Project, or for any other reason. 

6

 

        Section 5.03. Payment of Expenses.    The Company shall pay all of the reasonable expenses incurred by the Issuer with
respect to the Loan Agreement, the Indenture and any transaction or event contemplated by the Loan Agreement or the Indenture, including without limitation the out-of-pocket
expenses of the Issuer and counsel for the Issuer incurred in connection with the authorization, issuance and sale of the Bonds and (b) the compensation and reimbursement of expenses and
advances payable to the Trustee, the Paying Agent and the Registrar under any provision of the Loan Agreement or the Indenture. Such payments shall be made directly to each such entity. 

        Section 5.04. Indemnification.    The Company agrees that the Issuer and its elected or appointed officials, officers,
agents, legal counsel, servants and employees, and the Trustee and its directors, officers and employees (collectively, the "Indemnified Parties"), shall not be liable for, and that the Company will
at all times indemnify and hold harmless, the Indemnified Parties from and against any loss or liability, and pay all expenses of the Indemnified Parties relating to any lawsuit, proceeding or claim
arising out of, or in any way relating to, the execution, delivery or performance of this Loan Agreement or the Bond Delivery Agreement or the Indenture or any action taken or omitted to be taken
hereunder or thereunder, the acceptance or administration by the Trustee of its trusts under the Indenture, the issuance or sale of the Bonds, or any cause whatsoever relating to the Facilities,
except, in any case, as a result of the negligence or willful misconduct of the Indemnified Party seeking indemnification. In case any action shall be brought against any Indemnified Party in respect
of which indemnity may be sought hereunder against the Company, such Indemnified Party shall promptly notify the Company in writing and the Company shall assume the defense thereof, including the
employment of counsel reasonably acceptable to the Indemnified Party and the payment of all expenses. Failure by such Indemnified Party to notify the Company shall not relieve the Company from any
liability which it may have to such Indemnified Party otherwise than under this Section 5.04. Such Indemnified Party shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel shall be paid by such Indemnified Party unless the employment of such counsel has been authorized by the Company. The
Company shall not be liable for any settlement of any such action without its consent, but if any such action is settled with the Consent of the Company or if there be final judgment for the plaintiff
in any such action, the Company shall indemnify and hold harmless such Indemnified Party from and against any loss or liability by reason of such settlement or judgment. 

        Section 5.05. Payment of Taxes; Discharge of Liens.    The Company shall: (a) pay, or make provision for payment
of, all lawful taxes and assessments, including income, profits, property or excise taxes, if any, or other municipal or governmental charges, levied or assessed by any Federal, state or municipal
government or political body upon its interest in the Facilities or any part thereof or upon any amounts payable hereunder or on the First Mortgage Bonds when the same shall become due; and
(b) pay or cause to be satisfied and discharged or make adequate provision to satisfy and discharge, within sixty (60) days after the same shall accrue, any lien or charge upon any
amounts payable hereunder or on the First Mortgage Bonds, and all lawful claims or demands for labor, materials, supplies or other charges which, if unpaid, might be or become a lien thereon;
provided, that, the Company may, at its expense, and in its own name and behalf or in the name and behalf of the Issuer, in good faith contest any such taxes, assessments and other charges, and in
such event may permit the taxes, assessments and other
charges so contested to remain unpaid during the period of such contest and any appeal therefrom, provided during such period enforcement of such contested item is effectively stayed unless by
nonpayment of any such items the lien of the Indenture as to the amounts payable hereunder or on the First Mortgage Bonds will be materially endangered, in which event the Company shall promptly pay
and cause to be satisfied and discharged all such unpaid items. 

        The
Issuer shall cooperate fully with the Company in any such contest. In the event that the Company shall fail to pay any of the foregoing items required by this Section to be paid by
the Company, either the Issuer or the Trustee, in its discretion and without notice to the Owners of the 

7

 

Bonds, may make advances to effect payment of such items on behalf of the Company, but neither the Issuer nor the Trustee shall have any obligation to do so. Any and all such advances may bear
interest at a rate per annum equal to the prime lending rate of the Trustee. No such advance shall operate to relieve the Company from any default hereunder. 

 
 

ARTICLE VI    
    
    SPECIAL COVENANTS    
  

        Section 6.01. Maintenance of Existence.    Except as permitted in this Section 6.01, the Company shall maintain
its corporate existence, will not dissolve or otherwise dispose of all or substantially all of its assets and will not consolidate with or merge with or into another corporation. The Company may
consolidate with or merge with or into another corporation incorporated under the laws of the United States of America, any state thereof or the District of Columbia, or sell, transfer or otherwise
dispose of all or substantially all of its assets to any other entity if (a) no Event of Default under this Loan Agreement shall have occurred and be continuing, (b) the surviving,
resulting or transferee corporation (if other than the Company), as the case may be, prior to or simultaneously with such merger, consolidation, sale, transfer or disposition, assumes, by delivery to
the Trustee of an instrument in writing satisfactory in form to the Trustee, all the obligations of the Company hereunder and the obligations of the Company on the First Mortgage Bonds, and
(c) in the case of a merger or consolidation in which the Company is not the surviving or resulting entity or in the case of such a sale, transfer or disposition, the Company shall deliver to
the Trustee an opinion of counsel to the Company that such consolidation, merger, sale, transfer or disposition complies with the provisions of this Section 6.01. 

        If
a consolidation, merger, sale or other transfer is made as permitted by this Section 6.01, the provisions of this Section 6.01 shall continue in full force and effect
and no further consolidation, merger, sale or other transfer shall be made except in compliance with the provisions of this Section 6.01. 

        Section 6.02. Permits or Licenses.    In the event that it may be necessary for the proper performance of this Loan
Agreement on the part of the Company or the Issuer that any application or applications for any permit or license to do or to perform certain things be made to any governmental or other agency by the
Company or the Issuer, the Company and the Issuer each, upon the request of the other, shall execute such application or applications. 

        Section 6.03. Issuer's Access to Facilities.    The Issuer shall have the right, subject to such limitations,
restrictions and requirements as the Company may reasonably prescribe and upon appropriate prior notice to the Company, to have reasonable access to the Facilities during normal business hours for the
purpose of making examinations and inspections of the same. 

8

  

        Section 6.04. Arbitrage and Tax Exemption Certifications and Covenants.    The Company covenants for the benefit of the
Issuer and the Owners from time to time of the Bonds that, so long as any of the Bonds remain outstanding, it will not take any action, or permit to be taken any action, and that moneys on deposit in
any fund or account in connection with the Bonds, whether or not such moneys were derived from the proceeds of the sale of the Bonds or from any other sources, will not be used or invested in a
manner, which will cause the Bonds to be "arbitrage bonds' within the meaning of Section 148 of the Code or which will otherwise cause interest on the Bonds to be includable in the gross income
of the owners thereof for purposes of Federal income taxation. To such end, the Company has entered into the Tax Certificate. The Company covenants and agrees that it will comply with the Tax
Certificate, as the same may be amended from time to time, in accordance with its terms. Pursuant to such covenant the Company obligates itself to comply with the requirements of Section 148 of
the Code, so long as any of the Bonds are outstanding. The Company shall not be deemed to have violated this covenant by virtue of the fact that interest on any of the Bonds becomes includable in
gross income of a person who is a "substantial user" of the Facilities or a "related person" within the meaning of Section 103(b) of the 1954 Code. 

        Section 6.05. Use of Facilities.    So long as the Company owns an interest in the Facilities, the Company shall exercise
all its rights, powers, elections and options under the Inter-Company Agreements to cause the Facilities to be used for purposes contemplated by the Act. 

        Nothing
contained in this Loan Agreement shall be construed to require or authorize the Issuer to operate the Facilities or conduct any business enterprise therewith. 

        Section 6.06. Financing Statements.    The Company shall, to the extent required by law, file, record, refile and
re-record, or cause to be filed, recorded, retied and re-recorded, all documents or notices, including financing statements and continuation statements, required by law in
order to perfect, or maintain the perfection of, the lien of the Indenture. The Issuer shall cooperate fully with the Company in taking any such action. Concurrently with the execution and delivery of
the Bonds, the Company shall cause to be delivered to the Trustee an opinion of counsel (a) stating that in the opinion of such counsel, either (i) such action has been taken, as set
forth therein, with respect to the recording and filing of such documents, notices and financing statements as is necessary to perfect the lien of the Indenture under the Uniform Commercial Code of
the State of Montana, or (ii) no such action is necessary to so perfect such lien, and (b) stating the requirements for the filing of continuation statements or other documentation or
notices in order to maintain the perfection of the lien of the Indenture. 

 
 

ARTICLE VII    
    
    ASSIGNMENT    
  

        Section 7.01. Conditions.    Company's interest in this Loan Agreement may be assigned as a whole or in part by the
Company to another entity, subject, however, to the condition that no assignment shall cause the interest payable on the Bonds (other than Bonds held by a "substantial user" or "related person" within
the meaning of Section 103(b)(13) of the 1954 Code) to be subject to Federal income taxation or (other than as described in Section 6.01 hereof) relieve the Company from primary
liability for its obligations on the First Mortgage Bonds or to make payments to the Trustee under Section 4.04 hereof or for any other of its obligations hereunder; and subject further to the
condition that the Company shall have delivered to the Trustee (a) an opinion of counsel to the Company that such assignment complies with the provisions of this Section 7.01, and
(b) an opinion of Bond Counsel to the effect that the proposed assignment will not impair the validity under the Act of the Bonds or the exemption from Federal income taxation of the interest
thereon. 

9

 

        Section 7.02. Instruments Furnished to Trustee.    The Company shall, within fifteen (15) days after the delivery
thereof, furnish to the Issuer and the Trustee a true and complete copy of the agreements or other documents effectuating any such assignment. 

        Section 7.03. Limitation.    This Loan Agreement shall not be assigned nor shall the Facilities be leased or sold, in
whole or in part, except as provided in this Article VII or in Sections 3.01 or 6.01. 

 
 

ARTICLE VIII    
    
    EVENTS OF DEFAULT AND REMEDIES    
  

        Section 8.01. Events of Default.    Each of the following events shall constitute and is referred to in this Loan
Agreement as an "Event of Default": 

        (a)  a
failure by the Company to pay when due any amounts required to be paid under Section 4.04(a) hereof, which failure results in an Event of Default under Sections
8.01(a) or 8.01(b) of the Indenture; 

        (b)  a
failure by the Company to pay when due any amount required to be paid under this Loan Agreement or to observe and perform any covenant, condition or agreement on its
part to be observed or performed (other than a failure referred to in subsection (a) above), which failure shall continue for a period of ninety (90) days after written notice,
specifying such failure and requesting that it be remedied, shall have been given to the Company by the Issuer or the Trustee, unless the Issuer and the Trustee shall agree in writing to an extension
of such period prior to its expiration; provided, however, that the Issuer and the Trustee shall be deemed to have agreed to an extension of such period if corrective action is initiated by the
Company Within such period and is being diligently pursued; or 

        (c)  an
occurrence of a "Default" as such term is defined in Section 65 of the Mortgage. 

        Section 8.02. Force Majeure.    The provisions of Section 8.01(b) hereof are subject to the following limitations:
If by reason of acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders of any kind of the Government of the United States or of the State of Montana or any
department, agency, political subdivision, court or official of any of them, or any civil or military authority; insurrections; riots or other untoward conduct; epidemics; landslides; lightning;
earthquakes; volcanoes; fires; hurricanes; tornadoes; storms; floods; washouts; droughts; arrests; restraint of government and people; civil disturbances; explosions; breakage or accident to
machinery; partial or entire failure of utilities; or any cause or event not reasonably within the control of the Company, the Company is unable in whole or in part to carry out any one or more of its
agreements or obligations contained herein, other than its obligations under Sections 4.04, 5.01, 5.03, 5.04, 5.05 and 6.01 hereof and on the First Mortgage Bonds, the Company shall not be deemed in
default by reason of not carrying out said agreement or agreements or performing said obligation or obligations during the continuance of such inability. The Company shall make reasonable efforts to
remedy with all reasonable dispatch the cause or causes preventing it from carrying out its agreements and obligations; provided, that the settlement of strikes, lockouts and other industrial
disturbances shall be entirely within the discretion of the Company, and the Company shall not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the
demands of the opposing party or parties when such course is in the judgment of the Company unfavorable to the Company. 

        Section 8.03. Remedies.    (a) Upon the occurrence and continuance of any Event of Default, the Trustee, as assignee of
the Issuer may take, or cause to be taken, any action at law or in equity as may appear necessary or desirable to collect any payments then due and thereafter to become due, or to enforce performance
and observance of any obligation, agreement or covenant of the Company herein. 

10

 

        (b)  Any
waiver of any "Event of Default" under the Indenture and a rescission and annulment of its consequences shall constitute a waiver of any corresponding event of
default under this Loan Agreement and a rescission and annulment of the consequences thereof. 

        (c)  Any
amounts collected from the Company pursuant to this Section 8.03 shall be applied in accordance with the Indenture. No action taken pursuant to this
Section 8.03 shall relieve the Company from the Company's obligations pursuant to Section 4.04 hereof. 

        Section 8.04. No Remedy Exclusive.    No remedy conferred upon or reserved to the Issuer hereby is intended to be
exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any
such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Issuer to exercise any remedy reserved to it in this Article VIII, it
shall not be necessary to give any notice, other than such notice as may be herein expressly required. Such rights and remedies as are given the Issuer hereunder shall also extend to the Trustee. The
Trustee and the Owners, subject to the provisions of the Indenture, shall be entitled to the benefit of all covenants and agreements herein contained. 

        Section 8.05. Reimbursement of Attorneys' Fees.    If the Company shall default under any of the provisions hereof and
the Issuer or the Trustee shall employ attorneys or incur other reasonable and proper expenses for the collection of payments due hereunder or for the enforcement of performance or observance of any
obligation or agreement on the part of the Company contained herein, the Company will on demand therefor reimburse the Issuer or the Trustee, as the case may be, for the reasonable fees of such
attorneys and such other reasonable expenses so incurred. 

        Section 8.06. Waiver of Breach.    In the event any obligation created hereby shall be breached by either of the parties
hereto and such breach shall thereafter be waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. In
view of the assignment of certain of the Issuer's rights and interests hereunder to the Trustee, the Issuer shall have no power to waive any default hereunder by the Company in respect of such rights
and interests without the consent of the Trustee and the Trustee may exercise any of the rights of the Issuer hereunder. 

        Section 8.07. No Liability of Issuer.    The Bonds are issued under and pursuant to the Act and shall be limited
obligations of the Issuer payable solely out of the Receipts and Revenues of the Issuer from the Loan Agreement. No holder of any Bond has the right to compel any exercise of the taxing power of the
Issuer to pay the Bonds or the interest or premium, if any, thereon, and the Bonds shall not constitute an indebtedness of the Issuer or a loan of credit thereof within the meaning of any
constitutional or statutory provisions. 

 
 

ARTICLE IX    
    
    REDEMPTION OF BONDS    
  

        Section 9.01. Redemption of Bonds.    The Issuer shall take, or cause to be taken, the actions required by the Indenture
to discharge the lien thereof through the redemption, or provision for payment or redemption, of all Bonds then Outstanding, or to effect the redemption, or provision for payment or redemption, of
less than all the Bonds then Outstanding, upon receipt by the Issuer and the Trustee from the Company of a notice designating the principal amount and maturity of the Bonds to be redeemed, or for the
payment or redemption of which provision is to be made, and, in the case of redemption of Bonds, or provision therefor, specifying the date of redemption, which shall not be less than
forty-five (45) days from the date such notice is given, the applicable provision of the 

11

 

Indenture and that all conditions precedent to the Company's right to direct the redemption or the provision for payment or redemption of the Bonds contained in the Indenture have been complied with.
Except in the case of a redemption pursuant to Section 3.01(c) of the Indenture, such notice (unless otherwise stated therein) shall be revocable by the Company at any time prior to the time at
which the Bonds to be redeemed, or for the payment or redemption of which provision is to be made, are first deemed to be paid in accordance with Article VII of the Indenture. The Company shall
furnish any moneys required by the Indenture to be deposited with the Trustee or otherwise paid by the Issuer in connection with any of the foregoing purposes including moneys for payment of any
premium on the Bonds which is not otherwise provided for. 

        Section 9.02. Compliance with the Indenture.    Anything in this Loan Agreement to the contrary notwithstanding, the
Issuer and the Company shall take all actions required by this Loan Agreement and the Indenture in order to comply with Section 3.01(c) of the Indenture. 

 
 

ARTICLE X    
    
    MISCELLANEOUS    
  

        Section 10.01. Term of Loan Agreement.    This Loan Agreement shall remain in full force and effect from the date hereof
until the right, title and interest of the Trustee in and to the Trust Estate shall have
ceased, terminated and become void in accordance with Article VII of the Indenture and until all payments required under this Loan Agreement shall have been made. Any moneys remaining in the
Bond Fund after the right, title and interest of the Trustee in and to the Trust Estate shall have ceased, terminated and become void shall be paid to the Company. 

        Section 10.02. Notices.    Except as otherwise provided in this Loan Agreement, all notices, certificates, requests,
requisitions and other communications hereunder shall be in writing and shall be sufficiently given and shall be deemed given when mailed by first-class mail, postage prepaid, addressed as follows: if
to the Issuer, at City Hall, Forsyth, Montana 59327, Attention: Mayor; if to the Company, at 40 East Broadway, Butte, Montana 59701, Attention: Treasurer; and if to the Trustee at such address as
shall be designated in the Indenture. A copy of each notice, certificate, request or other communication given hereunder to the Issuer, the Company or the Trustee shall also be given to the others.
Any of the foregoing may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates, requests or other communications shall be sent. 

        Section 10.03. Parties in Interest.    This Loan Agreement shall inure to the benefit of and shall be binding upon the
Issuer, the Company and their respective successors and assigns, and no other person, firm or corporation shall have any right, remedy or claim under or by reason of this Loan Agreement; provided,
however, that neither the Issuer, the State of Montana, or any political subdivision thereof shall in any event be liable for the payment of the principal of, or premium, if any, or interest on, the
Bonds or for the performance of any pledge, mortgage, obligation or agreement created by or arising Out of the Loan Agreement or the issuance of the Bonds; and provided, further, that neither the
Bonds nor any obligation of the Issuer created by or arising under this Loan Agreement shall constitute an indebtedness or loan of credit of the Issuer, the State of Montana or any political
subdivision thereof within the meaning of any constitutional or statutory provisions whatsoever, but shall be limited obligations of the Issuer payable solely out of the revenues derived from the
First Mortgage Bonds or this Loan Agreement, or from the sale of the Bonds, or income earned on invested funds as provided herein and in the Indenture. 

        Section 10.04. Amendments.    This Loan Agreement may be amended only by written agreement of the parties
hereto, subject to the limitations set forth herein and in the Indenture. 

        Section 10.05. Counterparts.    This Loan Agreement may be executed in any number of counterparts, each of which, when so
executed and delivered, shall be an original; but such counterparts shall together constitute but one and the same Loan Agreement. 

        Section 10.06. Severability.    In case any one or more provisions of this Loan Agreement shall, for any reason, be held
to be illegal or invalid, such illegality or invalidity shall not affect any other provisions hereof, and this Loan Agreement shall be construed and enforced as if such illegal or invalid provisions
had not been contained herein. 

        Section 10.07. Governing Law.    The laws of the State of Montana shall govern the construction and enforcement of this
Loan Agreement. 

12

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly executed as of the day and year first above written. 

	 	 	CITY OF FORSYTH,

ROSEBUD COUNTY, MONTANA

	

 	
 	

By	

/s/  WARREN BANKER      
 Mayor
	

ATTEST:	
 	

 	

 
	

/s/  DANIEL D. WATSON      
 City Clerk	
 	

 	

 
	

 	
 	
THE MONTANA POWER COMPANY

	

 	
 	

By	

/s/  JP PEDERSON      
 Vice President and Chief Financial Officer

13

  

 
 

EXHIBIT A    
    
    COLSTRIP UNITS 1, 2, 3 AND 4 POLLUTION CONTROL FACILITIES    

A-1

 
 
 

EXHIBIT A    
    
    UNITS 1 and 2    

	1.
	VENTURI
SCRUBBER SYSTEM 

        The
function of the scrubber system is to remove fly ash and sulfur dioxide from the flue gas by washing with a recycled liquor. The scrubbers were designed and installed by Combustion
Equipment Associates and Inc. Particulate loading in the scrubber gases shall be equal to or less than 0.18 grains per actual cubic foot measured at the reheater outlet condition (equivalent to
0.02 grains per actual cubic foot in the stack). Sulfur dioxide in the scrubbed gases shall be equal to or less than one pound of SO2 per million BTU of heat released in the furnace. The
design conditions are for a flue gas flow of 1,430,000 cubic feet per minute per unit at 2910F. This system, together with a related monitoring device, is composed of three scrubber
trains per unit, each containing a venturi throat, counter current sprays, mist eliminators, recycle tank, recycle pumps, steam coil type reheater, soot blowers, induced draft fan, effluent liquor
pumps and lines, and pond return pumps. Flue gas first passes down through the venturi throat section and is thoroughly mixed with the liquor. The liquor drops out into the integral recycle tank with
the absorbed ash and some absorbed SO2. Gas then passes upward through sprays and demisters where downward flowing liquor completes the SO2 absorption process. The liquor again
drops out in to the recycle tank. The gas passes on through a reheater before entering the ID
fans and exiting out the stack. Spent liquor is pumped to a fly ash slurry disposal pond by effluent liquor pumps and clear water is returned to the recycle tank by the pond return pumps. Each
scrubber unit includes all necessary pumps, agitators, all pipe lines interfacing the scrubber together with other unit facilities, other electrical services to the scrubber and associated equipment,
and all other necessary equipment. 

	2.
	ASH
DISPOSAL SYSTEM 

        The
fly ash slurry disposal system serves to dredge and pump fly ash slurry from the fly ash slurry disposal pond, mentioned above, to the evaporation pond and return reclaimed water to
the fly ash slurry pond. The system includes a barge mounted dredge, booster pumps, a 16" diameter slurry pipeline, evaporation pond, a barge mounted return line pump, emergency drain pumps, sump
pumps, seal water pumps, all electrical services, valves, miscellaneous piping, and all other necessary equipment. Facilities are included for bottom ash disposal. 

	3.
	NITROGEN
CONTROL SYSTEM 

        The
nitrogen control system services to reduce concentration of NOx in the flue gases. The system consists of four overfire air compartments per unit and associated ducting,
air dampers. and combustion controls. In operation, the system functions to decrease combustion temperatures and NOxproduction by increasing the volume of the fireball region in which
combustion takes place. This is accomplished by installation and control of overfire air compartments which spread the supply of combustion air over a larger volume. 

A-2

 
 
 

EXHIBIT A    
    
    UNITS 3 and 4    

	1.
	POLLUTION
CONTROL EQUIPMENT 

 Scrubber System  

The
air pollution control facilities employed on Units #3 and #4 consist of a complete scrubber system, including duet work, plenums, scrubber vessels, reheaters and induced draft tans, together with
infrastructures, monitoring and electrical controls and instrumentation therefore, for the purpose of removing the sulfur dioxide (SO2) and particulate matter from the flue gas. The
scrubber system also includes a scrubber maintenance facility, Including a machine shop and laboratory dedicated to the scrubber system and an environment monitoring laboratory for the pollution
control facilities. The scrubber system utilizes the Wet Venturi Principle and consists of eight modules for each unit through which the steam generator gases from the burned coal must pass. 

The
gases in the scrubber are contacted with finely atomized scrubber slurry. Within the stated performance of the system, fly ash particulates are removed by the slurry droplets. The sulfur dioxide
reacts with the alkali contained in the slurry which results from the mixing of water, fly ash particulates, hydrated high calcium lime and hydrated dolomitic lime. A major portion of the sulfur
dioxide is converted to solid sulfate compounds which are retained In the scrubber liquid and can, therefore, be piped to and deposited In an ash pond together with the particulate. 

After
the flue gas passes through the venturi section, absorption sprays and wash trays, it is processed through a demister which removes any entrained slurry and is then reheated and discharged
through the stack. 

The
slurry system in the Units #3 and #4 scrubber system consists of recycle tanks, regenerators, agitators, pumps and pipelines. The slurry from the Units #3 and #4 scrubber system is transported to
an effluent holding pond and involves- the use of effluent holding tanks, agitators, pumps and pipelines. A separate wash tray pond system is used to store the suspended solids collected from the wash
tray system. Reclaimed water from the clear water section of these ponds is circulated back to the scrubber system. 

 Lime Storage  

The
sole purpose of the lime system is to supply the lime slurry requirements of the scrubber regeneration system. There is one lime system that serves the sixteen scrubbers for Units #3 and #4. Major
components of the system include tour slakers, in which calcined high calcium lime is reacted
with water to produce a hydrated lime slurry, slurry transfer tanks, where the slurry is diluted with water and mixed with dry hydrated dolomitic lime, slurry feed storage tanks, where the slurry will
be held for use by the regenerators as needed, hydrators, for mixing calcined dolomitic lime with water, and agitators. 

 Scrubber Sludge Disposal  

Effluent
slurry is pumped from the plant to the sludge disposal pond located approximately three miles southeast of the plant. The suspended solids settle to the pond bottom and the clear water is
pumped back to the plant. 

There
are two phases in the development of this pond. The first phase requires the construction of one dam 108 feet high and 1,100 feet in length. A saddle dam must also be added. The saddle dam will
vary in height with a maximum height for this phase of 38 feet and be approximately 

A-3

 

2,800 feet in length. The capacity of Phase 1 will be 6,650 acre-feet and it will last approximately 10 years. 

The
development of the second phase will require that the original dam be raised to 133 feet in height and Increased to a length of 2,500 feet. The saddle dam will be raised to a maximum height of 66
feet and a total length of 3,500 feet. The capacity of the second phase will be an additional 7,000 acre-feet and it will last approximately 12 years, for a total life of
22 years. The construction of the second phase is not included in cost reported at this time. 

The
sludge disposal pond design takes into account a permit requirement for minimum seepage, by providing low permeability plastic concrete filled trenches around the periphery of the pond constructed
during the course of Phase 1 work. 

 Coal Dust Control System  

The
coal dust control system is designed to collect, store and treat coal dust resulting from mining, crushing, handling and storing coal In the course of normal Units #3 and #4 operations. To control
coal dust air pollution the points where coal Is transferred between conveyors or placed in coal piles have been enclosed. The coal transfer stations between conveyors are enclosed with steel framed
structures with metal siding. The structures are equipped with vacuum filtration systems, consisting at ducts, blowers, dust removal filters and associated equipment, to remove coal dust tram exhaust
air from the structures, and are also equipped with mechanical dust collectors. The mainline 45,000 ton coal storage pile is enclosed with a 340' long A-frame precast panel concrete
structure designed to contain coal dust, thereby allowing Its removal and treatment. 

 Cooling Tower Drift Containment Control Facility  

Operation
of the cooling towers produces exhaust air emissions containing circulating water, particulates and other pollutants generally known as cooling tower drift. To control release of these sir
pollutants, the cooling towers are provided with high efficiency drift eliminators, located at the top of the cooling tower structures, which remove drift from the cooling tower exhaust air. 

	2.
	SOLID
WASTE DISPOSAL 

 Bottom Ash Disposal  

The
function of the bottom ash disposal system is to remove accumulations of furnace bottom ash, pulverizer pyrites, economizer ash, and air preheater fly ash by means of a water-ash
slurry to a disposal pond located approximately 2,000 feet southeast of the plant site The system consists generally of three sets of fly ash hoppers, (economizer, air heater, and flue gas duct
hoppers) pyrite hoppers, the bottom ash hopper, an 18,000 gallon transfer tank, a settling pond, a clear water pond and various pumps, and pipelines. 

Clinker
grinders are used to grind the bottom ash which is then mixed with water and sluiced to the ash transfer tank. 

The
economizer ash collected in economizer hoppers falls by gravity to the ash transfer tank. 

The
pyrites are collected in local tanks and sluiced to the ash transfer tank. 

Ash
collected in the flue gas duct hoppers and air preheater hoppers is sluiced to the ash transfer tank. 

These
ashes are pumped from the ash transfer tank to the bottom ash pond. Reclaimed water is returned from the bottom ash disposal pond and redistributed to the various sections of the bottom ash
disposal system. 

A-4

 

The
solid waste disposal facilities for purposes of the issuance of the Notes include only so much of the bottom ash disposal system as is external to the plant building and Include piping from the
building to the settling pond, the pond itself, return water pumps and lines, a clear water pond and piping back to the plant building. 

	3.
	WATER
POLLUTION CONTROL 

 North Plant Sediment Pond  

The
north plant sediment pond is designed to collect and store the storm runoff from the general north plant area. These waters are retrained in the pond, allowing natural evaporation to desiccate the
pond. This prevents high quantities at suspended solids from being discharged to Armells Creek or other state surface waters. 

 North Plant Area Drainage System  

The
north plant area drainage system is designed to collect and store storm runoff from the water treatment building, fuel oil handling area and the cooling tower area in the north plant area drain
pond. The pond also serves as a storage facility for one cooling tower basin drain, cooling tower overflow, water treatment filter backwash, and for the cooling tower blowdown water not used In the
flue gas scrubbing process. These waters are potentially contaminated with oil and high suspended and dissolved solids, and this system stores these discharges preventing any discharge to Armells
Creek or other state surface waters. The north plant area drainage system consists of collection basins, piping, concrete culverts, yard drains, manholes and special yard gradings (berms) which route
these discharges to the north plant area sump and north plant area drain pond. The north plant area drain pond incorporates a hypalon liner to comply with a permit requirement for minimum seepage. The
oil separator section of the sump receives oily surface collection drains. The oil and water are separated. The oil from the sump is then trucked away for disposal. 

The
water discharges are either pumped to the scrubber effluent holding pond via a 6" diameter pipeline, 19,000 feet in length for evaporation, to the circulating Water system, or to the plant oily
waste sump as appropriate. Each discharge arrangement has its own set of sump pumps. The pumps and piping system which discharge to the plant oily waste sump are not Included in the costs covered by
this Report, nor is the circulating water system. The waters recovered are excess to any plant requirements and recovery of the waters does not provide any economic benefit to the plant. 

 Chemical and Oily Waste System  

The
chemical and oily waste system is designed to collect, store, treat and dispose of chemical and oily wastes resulting from the normal operation of Units #3 and #4. This system consists of drains
and pipes, oil separators, chemical waste sumps, chemical waste neutralizing tanks, neutralizing chemical storage tanks, chemical inspection equipment, and associated mechanical and electrical control
equipment. 

The
chemical waste drainage system includes drains and neutralization tanks for collection and treatment of chemical waste. Chemical waste drains are located throughout Units #3 and #4, and are used
to collect and transfer chemical waste to holding sumps and neutralization tanks. The neutralization equipment includes chemical storage and Injection equipment as well as controls and
Instrumentation. 

The
oily waste drainage system is made up of a. network of drains which collect oily waste from throughout Units #3 and #4, and dispose of the wastes in the Units #3 and #4 main water-oil
sump. Oil separation chambers in the sump allow for oil removal. The treated water is monitored 

A-5

 

for trace oil levels and released. After separation, the waste oil is removed by a contractor to an offsite disposal area. 

 Cooling Tower Blowdown System  

The
cooling tower blowdown system consists of a 6" pipeline from the cooling tower to the waste disposal pond where the blowdown Is treated by settlement and evaporation In accordance with water
pollution control requirements. 

 Groundwater Monitoring Wells  

Groundwater
monitoring wells have been installed around the various ponds associated with the plant operation. These ponds include the scrubber effluent holding pond, the scrubber drain pond, the
scrubber wash tray pond, the bottom ash pond, and the north plant area effluent pond. These groundwater monitoring wells provide the ability through sampling to detect and quantity accidental
discharges from the above mentioned plant storage and waste ponds. This is necessary to show compliance with State Groundwater Standards and with permit requirements for minimum seepage. 

A-6

QuickLinks

Exhibit 4.4(e)

LOAN AGREEMENT between CITY OF FORSYTH, ROSEBUD COUNTY, MONTANA and THE MONTANA POWER COMPANY

TABLE OF CONTENTS

LOAN AGREEMENT

ARTICLE I DEFINITIONS

ARTICLE II REPRESENTATIONS AND WARRANTIES

ARTICLE III THE FACILITIES

ARTICLE IV ISSUANCE OF THE BONDS; THE LOAN; DISPOSITION OF PROCEEDS OF THE BONDS; LOAN PAYMENTS

ARTICLE V THE FIRST MORTGAGE BONDS; OTHER OBLIGATIONS

ARTICLE VI SPECIAL COVENANTS

ARTICLE VII ASSIGNMENT

ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES

ARTICLE IX REDEMPTION OF BONDS

ARTICLE X MISCELLANEOUS

EXHIBIT A COLSTRIP UNITS 1, 2, 3 AND 4 POLLUTION CONTROL FACILITIES

EXHIBIT A UNITS 1 and 2

EXHIBIT A UNITS 3 and 4QuickLinks
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Exhibit 4.4(f)    
  

 
 

FIRST SUPPLEMENTAL LOAN AGREEMENT
  
    BETWEEN
  
    CITY OF FORSYTH, ROSEBUD COUNTY, MONTANA
  
    AND
  
    THE MONTANA POWER COMPANY    
  

DATED AS OF SEPTEMBER 21, 2001  

 
 

RELATING TO
  CITY OF FORSYTH, ROSEBUD COUNTY, MONTANA
  POLLUTION CONTROL REVENUE REFUNDING BONDS
  (THE MONTANA POWER COMPANY COLSTRIP PROJECT)
  SERIES 1993A    
  

  

 
 

TABLE OF CONTENTS    
  

	SECTION	Page
	Recitals	1
	

ARTICLE I	

DEFINITIONS	

1
	 	Section 1.01.	Definitions Contained in the Agreement	1
	 	Section 1.02.	New Definitions	1
	

ARTICLE II	

REPRESENTATIONS AND WARRANTIES	

2
	 	Section 201.	Representations and Warranties of the Issuer	2
	 	Section 2.02.	Representations and Warranties of the Company	2
	

ARTICLE III	

AMENDMENT OF LOAN AGREEMENT	

3
	 	Section 3.01.	Amendments	3
	

ARTICLE IV	

MISCELLANEOUS	

4
	 	Section 4.01.	Execution of Counterparts	4
	 	Section 4.02.	Applicability of the Agreement	4
	 	Section 4.03.	Consent of the Trustee	4
	 	Section 4.04.	Governing Law	4
	 	Section 4.05.	Severability	4
	Signatures	4
	

CONSENT OF TRUSTEE	

5

i

        THIS FIRST SUPPLEMENTAL LOAN AGREEMENT, dated as of September 21, 2001, between the City of Forsyth, Rosebud County, Montana, a
municipal corporation and political subdivision organized and existing under the Constitution and laws of the State of Montana (the "Issuer") and The
Montana Power Company, a Montana corporation (the "Company"), amends the Loan Agreement, dated as of May 1, 1993, between the Issuer and the
Company (the "Loan Agreement"). 

 
 

RECITALS:    
  

        WHEREAS, the Issuer has executed and delivered an Indenture of Trust, dated as of May 1, 1993 (the
"Indenture"), in connection with the issuance by the Issuer of its Pollution Control Revenue Refunding Bonds (The Montana Power Company Colstrip
Project) Series 1993A (the "Bonds"); and 

        WHEREAS, in connection with the issuance of the Bonds, the Issuer and the Company entered into the Loan Agreement; and 

        WHEREAS, Section 10.04 of the Loan Agreement provides that the Loan Agreement may be amended only by written agreement of the
Issuer and the Company and as provided in the Indenture; and 

        WHEREAS, Section 11.06 of the Indenture provides that without the consent of or notice to, the owners of the Bonds, the Issuer and
the Company may modify, alter, amend or supplement the Loan Agreement, and the Trustee may consent thereto, in connection with any change which is not materially adverse to the owners of the Bonds
provided that there shall be delivered to the Issuer and the Trustee an opinion of bond counsel stating that such modification, alteration, amendment or supplement is authorized or permitted by the
Indenture and the Act (as defined in the Indenture), complies with their respective terms, will, upon the execution and delivery thereof, be valid and binding upon the Issuer and the Company in
accordance with its terms and will not adversely affect the exemption of interest on the Bonds from federal income taxation (the "Opinion"); and 

        WHEREAS, the Company desires to amend Section 6.01 of the Loan Agreement as provided herein, there having been heretofore delivered
to the Issuer and the Trustee the Opinion required by Section 11.06 of the Indenture; and 

        WHEREAS, the parties to the Loan Agreement desire to enter into this First Supplemental Loan Agreement to make the modifications to the
Loan Agreement set forth herein. 

        NOW, THEREFORE, the parties hereto, intending to be legally bound hereby and in consideration of the premises, do hereby agree as follows: 

 
 

ARTICLE I
  
    DEFINITIONS    
  

        Section 1.01. Definitions Contained in the Agreement.    The words and terms defined in the Loan Agreement shall for all
purposes of this First Supplemental Loan Agreement have the meanings specified in such Loan Agreement when used herein, unless the context clearly requires otherwise. 

        Section 1.02. New Definitions.    The following words and terms as used in the First Supplemental Loan Agreement shall
have the following meanings: 

        "First Supplemental Loan Agreement" means these presents as from time to time amended and supplemented. 

        "Moody's" means Moody's Investors Service, its successors and assigns, and, if such entity shall for any reason no longer perform the
functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally-recognized rating agency designated by the Company by notice to the Issuer and the Trustee. 

        "Rating Agency" means Moody's or S&P or both of them, as the case may be. 

 

        "S&P" means Standard & Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc., its successors
and assigns, and, if such entity shall for any reason no longer perform the functions of a securities rating agency, "S&P" shall be deemed to refer to any other nationally-recognized rating agency
designated by the Company by notice to the Issuer and the Trustee. 

        "Trustee" means Bank One, as trustee under the indenture and any successor thereto. 

 
 

ARTICLE II
  
    REPRESENTATIONS AND WARRANTIES    
  

        Section 2.01. Representations and Warranties of the Issuer.    The Issuer makes the following representations and
warranties as the basis for the undertakings on the part of the Company contained herein: 

	(a)
	The
Issuer is a municipal corporation and political subdivision duly organized and existing under the Constitution and laws of the State of Montana;

	(b)
	The
Issuer has the power under the Act to enter into this First Supplemental Loan Agreement and to perform and observe the agreements and covenants on its part contained herein and
therein, and by proper corporate action has duly authorized the execution and delivery of this First Supplemental Loan Agreement;

	(c)
	The
execution and delivery of this First Supplemental Loan Agreement by the Issuer do not, and consummation of the transactions contemplated hereby and thereby and fulfillment of the
terms hereof and thereof by the Issuer will not, result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Issuer is now a party or by which it is now bound, or any order, rule or regulation applicable to the Issuer of any court or of any regulatory body or administrative agency or
other governmental body having jurisdiction over the Issuer or over any of its properties, or any statute of any jurisdiction applicable to the Issuer;

	(d)
	The
Issuer has not assigned and will not assign its interest in this First Supplemental Loan Agreement other than to secure the Bonds;

	(e)
	No
consent, approval, authorization or other order of any regulatory body or administrative agency or other governmental body is legally required for the Issuer's execution and
delivery of this First Supplemental Loan Agreement;

	(f)
	The
Loan Agreement has not been previously amended or supplemented and as of the date hereof is still in full force and effect;

	(g)
	The
Indenture has not been previously amended or supplemented and as of the date hereof is still in full force and effect; and

	(h)
	Bank
One is the trustee under the Indenture. 

        Section 2.02. Representations and Warranties of the Company.    The Company makes the following representations and
warranties as the basis for the undertakings on the part of the Issuer contained herein; 

	(a)
	The
Company is a corporation duly organized and existing in good standing under the laws of the State of Montana;

	(b)
	The
Company has the corporate power to enter into this First Supplemental Loan agreement and to perform and observe the agreements and covenants on its part contained herein and by
proper corporate action has duly authorized the execution and delivery hereof; 

2

 

	(c)
	Neither
the execution and delivery of this First Supplemental Loan Agreement nor the fulfillment of or compliance with the terms and conditions of this First Supplemental Loan
Agreement will result in a breach of or constitute a default under any of the terms, conditions or provisions of any corporate restriction or any agreement or instrument to which the Company is now a
party or by which it is bound, or constitute a default under any of the foregoing, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the
property or assets of the Company prohibited under the terms of any instrument:

	(d)
	No
event has occurred and is continuing under the provisions of either the Loan Agreement, or to the knowledge of the Company, under the provisions of the Indenture, which event now
constitutes, or
with the lapse of time or the giving of notice, or both, would constitute an Event of Default under either the Loan Agreement or the Indenture;

	(e)
	No
consent, approval, authorization or other order of any regulatory body or administrative agency or other governmental body is legally required for the Company's execution and
delivery of this First Supplemental Loan Agreement;

	(f)
	The
Loan Agreement has not been previously amended or supplemented and as of the date hereof is still in full force and effect;

	(g)
	The
Indenture has not been previously amended or supplemented and as of the date hereof is still in full force and effect; and

	(h)
	Bank
One is the trustee under the Indenture. 

 
 

ARTICLE III
  
    AMENDMENT OF LOAN AGREEMENT    
  

        Section 3.01. Amendments.    Section 6.01 of the Loan Agreement is hereby amended as of the date hereof to read as
follows: 

        Section 6.01 Maintenance of Existence.    Except as permitted in this Section 6.01, the Company shall maintain its
existence as a corporation or a limited liability company, will not dissolve or otherwise dispose of all or substantially all of its assets and will not consolidate with or merge with or into another
corporation or limited liability company. The Company may consolidate with or merge with or into (1) a corporation incorporated under the laws of the United States of America, any state thereof
or the District of Columbia or (2) a limited liability company organized under the laws of the United States of America, any state thereof or the District of Columbia, or sell, transfer or
otherwise dispose of all or substantially all of its assets to any other entity if (a) no Event of Default under this Loan Agreement shall have occurred and be continuing, (b) the
surviving, resulting or transferee corporation or limited liability company (if other than the Company), as the case may be, prior to or simultaneously with such merger, consolidation, sale, transfer
or disposition, assumes, by delivery to the Trustee of an instrument in writing satisfactory in form to the Trustee, all the obligations of the Company hereunder and the obligations of the Company on
the First Mortgage Bonds, (c) in the case of a merger or consolidation in which the Company is not the surviving or resulting entity or in the case of such a sale, transfer or disposition, the
Company shall deliver to the Trustee an opinion of counsel to the Company
that such consolidation, merger, sale, transfer or disposition complies with the provisions of this Section 6.01, and (d) in the case of a merger or consolidation with a limited
liability company or such sale, transfer or disposition to a limited liability company, the Company shall deliver to the Trustee (i) an opinion, in form and substance satisfactory to the
Trustee, of counsel to the Company, satisfactory to the Trustee, that such consolidation, merger, sale, transfer or disposition is not materially adverse to the Owners of the Bonds, (ii) a
written certificate of the Company, in form and substance satisfactory to the Trustee, that such consolidation, merger, sale, transfer or disposition is not 

3

 

materially adverse to the Owners of the Bonds, and (iii) if the Bonds are then rated by any Rating Agency, evidence from each Rating Agency then rating the Bonds that the ratings on the Bonds
will not be reduced or withdrawn as a result of such consolidation, merger, sale, transfer or disposition. 

        If
a consolidation, merger, sale, transfer or other disposition is made as permitted by this Section 6.01, the provisions of this Section 6.01 shall continue in full force
and effect and no further consolidation, merger, sale, transfer or other disposition shall be made except in compliance with the provisions of this Section 6.01. 

 
 

ARTICLE IV
  
    MISCELLANEOUS    
  

        Section 4.01. Execution of Counterparts.    This First Supplemental Loan Agreement may be simultaneously executed in
several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 

        Section 4.02. Applicability of the Agreement.    Except as amended and supplemented by this First Supplemental Loan
Agreement, all of the provisions of the Loan Agreement shall remain in full force and effect. 

        Section 4.03. Consent of the Trustee.    This First Supplemental Loan Agreement shall be submitted to the Trustee for
consent pursuant to the requirements of Section 11.06 of the Indenture. 

        Section 4.04. Governing Law.    The laws of the State of Montana shall govern the construction and enforcement of this
First Supplemental Loan Agreement. 

        Section 4.05. Severability.    In the event any provision of this First Supplemental Loan Agreement shall be held invalid
or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 

        IN
WITNESS WHEREOF, the Issuer and the Company hereto have caused this First Supplemental Loan Agreement to be executed in their respective corporate names and their respective seals to
be hereunto affixed and attested by their duly authorized officers, as of the day and year first above written. 

	 	 	CITY OF FORSYTH, ROSEBUD COUNTY, MONTANA
	

 	
 	
By:	

/s/  DANIEL MURNION      
Mayor

[SEAL]

        ATTEST:

	

By:	

/s/  CHERYL LUCAS      
City Clerk	

 

	 	 	THE MONTANA POWER COMPANY
	

 	
 	
By:	

/s/  E. M. SENECHAL      
 E. M. Senechal
 Treasurer

4

 
 
 

CONSENT OF TRUSTEE    
  

        Bank One, as Trustee under that certain Indenture of Trust, dated as of May 1, 1993, referred to in the foregoing First Supplemental Loan Agreement, hereby
consents, as required by Section 11.06 of the Indenture, to the execution by the Company and the Issuer of the attached First Supplemental Loan Agreement. 

        DATED
this 10th day of December, 2001. 

	 	 	BANK ONE, as Trustee under that certain Indenture of Trust, dated as of May 1, 1993
	

 	
 	

By:	

/s/                                          
                      
 Its VICE PRESIDENT

Treasurer

ATTEST:

	

 	
 	

By:	

/s/                                          
                      
 Its VICE PRESIDENT
 

[SEAL]

5

QuickLinks

Exhibit 4.4(f)

FIRST SUPPLEMENTAL LOAN AGREEMENT BETWEEN CITY OF FORSYTH, ROSEBUD COUNTY, MONTANA AND THE MONTANA POWER COMPANY

RELATING TO CITY OF FORSYTH, ROSEBUD COUNTY, MONTANA POLLUTION CONTROL REVENUE REFUNDING BONDS (THE MONTANA POWER COMPANY COLSTRIP PROJECT) SERIES 1993A

TABLE OF CONTENTS

RECITALS

ARTICLE I DEFINITIONS

ARTICLE II REPRESENTATIONS AND WARRANTIES

ARTICLE III AMENDMENT OF LOAN AGREEMENT

ARTICLE IV MISCELLANEOUS

CONSENT OF TRUSTEE

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