Idaho Power Company
First Mortgage Bonds,
Secured Medium-Term Notes, Series D
TERMS AGREEMENT
November 12, 2002
Idaho Power Company
1221 W. Idaho St.
Boise, Idaho 83702-5627
Attention: Mr. Darrel Anderson
Subject in all respects to the terms and conditions of the Selling
Agency Agreement (the "2001 Agreement") dated October 1, 2001, between each of
ABN AMRO Incorporated, Banc of America Securities LLC, Banc One Capital Markets,
Inc., BNY Capital Markets, Inc., Goldman, Sachs & Co., McDonald Investments
Inc., U.S. Bancorp Piper Jaffray Inc., Wells Fargo Brokerage Services, LLC and
you, and to the terms and conditions of the Selling Agency Agreement (the "2002
Agreement" and, together with the 2001 Agreement, the "Agreements") dated
November 12, 2002 between Wachovia Securities, Inc. and you, each of the
undersigned agrees, severally and not jointly, to purchase the respective
principal amount of 4.75% First Mortgage Bonds due 2012 (the "2012 Notes") and
6.00% First Mortgage Bonds due 2032 (the "2032 Notes") of Idaho Power Company
set forth opposite its name below having the terms indicated below:
Principal Amount of Principal Amount of
Name 2012 Notes 2032 Notes
- ---- ---------- ----------
Banc One Capital Markets, Inc. $ 47,500,000 $ 47,500,000
U.S. Bancorp Piper Jaffray Inc. 20,000,000 20,000,000
Banc of America Securities LLC 12,500,000 12,500,000
Wachovia Securities, Inc. 10,000,000 10,000,000
McDonald Investments Inc. 10,000,000 10,000,000
------------ ------------
Total $100,000,000 $100,000,000
- ----- ============ ============
Identification of Notes: The 2012 Notes shall be The 2032 Notes shall be
designated 4.75% First designated 6.00% First
Mortgage Bonds due 2012 Mortgage Bonds due 2032
Aggregate Principal Amount: $100,000,000 $100,000,000
Issue Date: November 15, 2002 November 15, 2002
Original Interest Accrual Date: November 15, 2002 November 15, 2002
Interest Rate: 4.75% 6.00%
Maturity Date: November 15, 2012 November 15, 2032
Interest Payment Dates: April 15 and October 15, April 15 and October 15,
commencing April 15, 2003 commencing April 15, 2003
Regular Record Dates: March 31 and September 30 March 31 and September 30
Discount or Commission: 0.625% of Principal Amount 0.750% of Principal Amount
Purchase Price (Price to be paid to 98.323% of Principal Amount 98.706% of Principal Amount
Idaho Power Company after discount or
commission):
Closing Date: November 15, 2002 November 15, 2002
Price to Public: 98.948% 99.456%
Purchase Date and Time: November 15, 2002 at 10 a.m., November 15, 2002 at 10 a.m.,
Eastern Time Eastern Time
Place for Delivery of Notes and LeBoeuf, Lamb, Greene & LeBoeuf, Lamb, Greene &
Payment Therefor: MacRae, L.L.P. MacRae, L.L.P.
125 West 55th Street, 125 West 55th Street,
New York, New York New York, New York
Method of Payment: Wire transfer of immediately Wire transfer of immediately
available funds available funds
Redemption Provisions, if any: See "Optional Redemption" below. See "Optional Redemption" below.
2
Modification, if any, in the The undersigned shall have The undersigned shall have
requirements to deliver the received the documents received the documents
documents specified in specified in Section 6(b)(i), specified in Section 6(b)(i),
Section 6(b) of each of the (ii), (iii) and (iv) of each of the (ii), (iii) and (iv) of each of the
Agreements: Agreements, each dated as of Agreements, each dated as of
the Closing Date, except that the Closing Date, except that
the comfort letter furnished by the comfort letter furnished by
Deloitte & Touche LLP will be Deloitte & Touche LLP will be
dated November 12, 2002 dated November 12, 2002
Period during which 30 days 30 days
additional Notes may not be
sold pursuant to Section 4(1)
of each of the Agreements:
Syndicate Provisions (Set If any one or more of the If any one or more of the
forth any provisions relating undersigned shall fail to undersigned shall fail to
to underwriters' default and purchase and pay for any of purchase and pay for any of
step-up of amounts to be the 2012 Notes agreed to be the 2032 Notes agreed to be
purchased): purchased by it hereunder and purchased by it hereunder and
such failure to purchase shall such failure to purchase shall
constitute a default in the constitute a default in the
performance of its or their performance of its or their
obligations under this Terms obligations under this Terms
Agreement, the remaining of Agreement, the remaining of
the undersigned shall be the undersigned shall be
obligated severally to take up obligated severally to take up
and pay for (in the respective and pay for (in the respective
proportions which the amounts proportions which the amounts
of 2012 Notes set forth of 2032 Notes set forth
opposite its or their name opposite its or their name
above bears to the aggregate above bears to the aggregate
amount of 2012 Notes set forth amount of 2032 Notes set forth
opposite the names of all the opposite the names of all the
remaining undersigned above) remaining undersigned above)
the 2012 Notes which the the 2032 Notes which the
defaulting undersigned agreed defaulting undersigned agreed
but failed to purchase; but failed to purchase;
provided, however, that in the provided, however, that in the
event that the aggregate event that the aggregate
amount of 2012 Notes which it amount of 2032 Notes which it
or they agreed but failed to or they agreed but failed to
purchase shall exceed 10% of purchase shall exceed 10% of
the aggregate amount of 2012 the aggregate amount of 2032
3
Notes, the remaining of the Notes, the remaining of the
undersigned shall have the undersigned shall have the
right to purchase all, but shall right to purchase all, but shall
not be under any obligation to not be under any obligation to
purchase any, of the 2012 purchase any, of the 2032
Notes, and if they do not Notes, and if they do not
purchase any of the 2012 purchase any of the 2032
Notes within 36 hours after Notes within 36 hours after
such default, the Company such default, the Company
shall be entitled to a further shall be entitled to a further
period of 36 hours within period of 36 hours within
which to procure another party which to procure another party
or other parties reasonably or other parties reasonably
satisfactory to Banc One satisfactory to Banc One
Capital Markets, Inc. to Capital Markets, Inc. to
purchase the 2012 Notes. If purchase the 2032 Notes. If
the Company fails to procure the Company fails to procure
another party to purchase the another party to purchase the
2012 Notes within such period, 2032 Notes within such period,
this Terms Agreement will this Terms Agreement will
terminate without liability to terminate without liability to
any nondefaulting undersigned any nondefaulting undersigned
except as provided in Section 9 except as provided in Section 9
of each of the Agreements. In of each of the Agreements. In
the event of any default as the event of any default as
described herein, the Closing described herein, the Closing
Date shall be postponed for Date shall be postponed for
such period, not exceeding five such period, not exceeding five
(5) business days, as Banc One (5) business days, as Banc One
Capital Markets, Inc. shall Capital Markets, Inc. shall
determine in order that the determine in order that the
required changes in the Pricing required changes in the Pricing
Supplement or in any other Supplement or in any other
documents or arrangements documents or arrangements may
may be effected. Nothing may be effected. Nothing
contained in this Terms contained in this Terms
Agreement shall relieve any of Agreement shall relieve any of
the undersigned that shall the undersigned that shall
default of any liability for default of any liability for
damages occasioned by such damages occasioned by such
default. default.
4
Optional Redemption
The Company may, at its option, redeem the 2012 Notes or the 2032
Notes (collectively, the "Notes"), in whole or in part, at any time, at a
redemption price equal to the greater of:
o 100% of the principal amount of the Notes to be redeemed and
o as determined by an Independent Investment Banker, the sum of the present
values of the remaining scheduled payments of principal and interest on the
Notes to be redeemed (not including any portion of payments of interest
accrued as of the date fixed for redemption), discounted to the date fixed
for redemption on a semi-annual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Treasury Rate (as defined below), plus 15
basis points, in the case of the 2012 Notes, and plus 20 basis points, in
the case of the 2032 Notes,
plus in either case interest accrued and unpaid on the Notes to be redeemed to
the date fixed for redemption. The Company will mail notice of any redemption at
least 30 days before the date fixed for redemption to each holder of the Notes
to be redeemed.
"Treasury Rate" means, with respect to any date fixed for redemption,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes to be redeemed that would be used, at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the Notes to be redeemed.
"Comparable Treasury Price" means, with respect to any date fixed for
redemption,
(1) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) on the third business day preceding such date, as set forth in the
daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or
(2) if such release (or any successor release) is not published or
does not contain such prices on such business day, (a) the average of the
Reference Treasury Dealer Quotations for such date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations for such date,
or (b) if the trustee obtains fewer than four such Reference Treasury
Dealer Quotations, the average of all the quotations received.
5
"Independent Investment Banker" means any one of the Reference
Treasury Dealers appointed by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date fixed for redemption, the average, as
determined by the trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the trustee by such Reference Treasury Dealer at 5:00 p.m.
New York City time on the third business day preceding the date fixed for
redemption.
"Reference Treasury Dealer" means (1) Banc One Capital Markets, Inc.,
U.S. Bancorp Piper Jaffray Inc., Banc of America Securities LLC and their
respective successors, unless any of them ceases to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), in which case
the Company will substitute another Primary Treasury Dealer and (2) any other
Primary Treasury Dealer selected by the Company.
6
This Terms Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
This Terms Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
Banc One Capital Markets, Inc.
By: /s/ C. Victor Manny
-------------------------------------
Name: C. Victor Manny
Title: Managing Director
U.S. Bancorp Piper Jaffray Inc.
By: /s/ Robert A. Krueger
-------------------------------------
Name: Robert A. Krueger
Title: Managing Director
Banc of America Securities LLC
By: /s/ Lily Chang
-------------------------------------
Name: Lily Chang
Title: Principal
Wachovia Securities, Inc.
By: /s/ Keith Mauney
-------------------------------------
Name: Keith Mauney
Title: Managing Director
McDonald Investments Inc.
By: /s/ Andrew T. Redinger
-------------------------------------
Name: Andrew T. Redinger
Title: Sr. Vice President
Accepted:
Idaho Power Company
By: /s/ Darrel T. Anderson
--------------------------------
Name: Darrel T. Anderson
Title: Vice President, Chief Financial
Officer and Treasurer