<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 26, 1997
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
PUGET SOUND ENERGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
<TABLE>
<CAPTION>
WASHINGTON 91-0374630
<S> <C>
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
411-108TH AVENUE N.E.
BELLEVUE, WASHINGTON 98004-5515
(425) 454-6363
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
JAMES P. TORGERSON
411-108TH AVENUE N.E.
BELLEVUE, WASHINGTON 98004-5515
(425) 454-6363
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
<TABLE>
<S> <C>
ANDREW BOR CHRISTOPHER J. KELL
PERKINS COIE SKADDEN, ARPS, SLATE, MEAGHER & FLOM
1201 THIRD AVENUE, 40TH FLOOR 919 THIRD AVENUE
SEATTLE, WASHINGTON 98101-3099 NEW YORK, NEW YORK 10022
(206) 583-8888 (212) 735-3000
</TABLE>
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective as determined by
market conditions and other factors.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED REGISTERED PER UNIT* OFFERING PRICE* REGISTRATION FEE
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Senior Notes........... $500,000,000 100% $500,000,000 $151,516
</TABLE>
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- -------------------------------------------------------------------------------
*Estimated solely for the purpose of computing the registration fee.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED NOVEMBER 26, 1997
PROSPECTUS
PUGET SOUND ENERGY, INC.
$500,000,000
SENIOR NOTES
------------
Puget Sound Energy, Inc. (the "Company") may offer from time to time up to
$500,000,000 aggregate principal amount of senior notes (the "Senior Notes").
Prior to the Substitution Date (as defined below), the Senior Notes will be
secured by the delivery to the Senior Note Trustee (as defined below) in trust
for the benefit of the holders of the Senior Notes of (i) first mortgage bonds
issued under the Company's electric mortgage indenture or (ii) first mortgage
bonds issued under the Company's gas mortgage indenture. The Senior Notes may
be offered in one or more series at prices and on terms to be determined at the
time of offering. The aggregate principal amount, maturity, interest rate (or
method of calculating the interest rate), any redemption provisions, any
sinking fund provisions, offering price, proceeds to the Company and other
terms of the offering of any series of the Senior Notes will be set forth in a
Prospectus Supplement to be delivered at the time of any offering.
The Senior Notes will be represented either by Global Notes registered in the
name of The Depository Trust Company ("DTC"), as depository ("Depository"), or
its nominee, or by securities in certificated form issued to the registered
owners thereof, as set forth in the applicable Prospectus Supplement. Interests
in Global Notes will be shown on, and transfers thereof will be effected only
through, records maintained by the Depository and its participants. Global
Notes will not be issuable as certificated securities except in circumstances
described herein or in the applicable Prospectus Supplement.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
The Senior Notes, or any series thereof if there shall be more than one
series, may be sold directly to a limited number of purchasers, through agents
designated from time to time, or through underwriters or dealers. See "Plan of
Distribution." If any agents of the Company or any underwriters are involved in
the sale of the Senior Notes, or any series thereof, in respect of which this
Prospectus is being delivered, the names of such agents or underwriters and any
applicable discounts or commissions with respect to the Senior Notes offered
hereby will be set forth in the Prospectus Supplement. See "Plan of
Distribution" for possible indemnification arrangements for underwriters,
dealers, agents and purchasers.
The date of this Prospectus is , 1997.
<PAGE>
No person has been authorized to give any information or to make any
representation not contained in this Prospectus or the Prospectus Supplement
and, if given or made, such information or representation must not be relied
upon as having been authorized. This Prospectus and the Prospectus Supplement
do not constitute an offer to sell or the solicitation of an offer to buy, nor
shall there be any sale of these securities in any state or jurisdiction in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state or jurisdiction.
Neither the deliver of the Prospectus Supplement nor any sale made thereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date thereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Commission's regional offices
at 7 World Trade Center, 13th Floor, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material may also be obtained by mail from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Such information may also be accessed electronically by
means of the Commission's home page on the Internet (http://www.sec.gov). In
addition, such reports, proxy statements and other information concerning the
Company may be inspected at the offices of the New York Stock Exchange, Inc.,
20 Broad Street, New York, New York 10005, on which certain securities of the
Company are listed.
This Prospectus constitutes a part of a registration statement on Form S-3
(the "Registration Statement") filed by the Company with the Commission under
the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus
does not contain all the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission, and reference is hereby made to the
Registration Statement and to the exhibits relating thereto for further
information with respect to the Company and the Senior Notes. Any statements
contained herein concerning the provisions of any document are not necessarily
complete, and, in each instance, reference is made to the copy of such
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission. Each such statement is qualified in its entirety by such
reference.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Commission are hereby
incorporated by reference in this Prospectus:
(a) The Company's Annual Report on Form 10-K for the year ended December
31, 1996 (File No. 1-4393).
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, June 30 and September 30, 1997 (File No. 1-4393).
(c) The Company's amendments on Form 10-Q/A, each filed with the
Commission on November 14, 1997, to its Quarterly Reports on Form 10-Q for
the quarters ended March 31 and June 30, 1997.
(d) The Company's Current Reports on Form 8-K filed with the Commission
on February 13, February 26 and October 24, 1997 (File No. 1-4393).
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering or offerings of the Senior Notes shall be deemed
to be incorporated by reference in this Prospectus and to be a part hereof
from the respective dates of filing of such documents. Any statement contained
in this Prospectus or in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that another statement contained in this
Prospectus or in any other subsequently filed document which is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated by reference in this Prospectus,
other than exhibits to such documents. Requests for such copies should be
directed to Investor Relations, Puget Sound Energy, Inc., 411-108th Avenue
N.E., Bellevue, Washington 98004-5515, (425) 454-6363.
3
<PAGE>
THE COMPANY
Puget Sound Energy, Inc., formerly Puget Sound Power & Light Company (the
"Company"), is an investor-owned public utility incorporated in the state of
Washington furnishing electric and, since February 10, 1997, gas service in a
territory covering approximately 6,000 square miles, principally in the Puget
Sound region of Washington state. On February 10, 1997, the Company completed
a merger (the "Merger") with the Washington Energy Company ("WECo") and its
principal subsidiary, Washington Natural Gas Company ("WNG"). Seattle-based
WNG provided natural gas distribution service in an area east of Puget Sound
that includes Seattle, Tacoma, Everett, Bellevue and Olympia. The Company
changed its name to Puget Sound Energy, Inc. effective with the Merger. The
Company's executive office is located at 411-108th Avenue N.E., Bellevue,
Washington 98004-5515, and its telephone number is (425) 454-6363.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratios of earnings to fixed
charges for the respective periods indicated:
<TABLE>
<CAPTION>
TWELVE MONTHS TWELVE MONTHS
ENDED ENDED YEARS ENDED DECEMBER 31,
SEPTEMBER 30, SEPTEMBER 30, ------------------------
1997(1) 1996 1996 1995 1994 1993 1992
------------- ------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges(2)(3)............ 2.6x 3.1x 3.1x 2.6x 2.3x 3.0x 2.6x
</TABLE>
- --------
(1) The ratio for the twelve months ended September 30, 1997 includes charges
incurred in connection with the Merger. Had such charges been excluded
from earnings, the ratio of earnings to fixed charges for such period
would have been 3.1x.
(2) As a result of the Merger, each of the Company's ratios reflects the
combined operations of the Company and WECo. Because WECo's fiscal year
ended September 30, the combined ratios for the five years ended December
31, 1996 reflect the fiscal years ended December 31 for the Company and
September 30 for WECo. September 30 ratios are comprised of the results of
the Company and WECo for the twelve months ended September 30.
(3) For purposes of computing the ratios of earnings to fixed charges,
earnings represent income from continuing operations before extraordinary
items and cumulative effect of changes in accounting principles plus
applicable income taxes and fixed charges. Fixed charges include all
interest expense and the proportion deemed representative of the interest
factor of rent expense.
4
<PAGE>
USE OF PROCEEDS
Except as otherwise set forth in any Prospectus Supplement, the net proceeds
to be received by the Company from the issuance and sale of the Senior Notes
will initially become part of the general funds of the Company and will be
used for the repayment of all or a portion of the Company's outstanding short-
term borrowings incurred for the Company's construction program or for the
payment at maturity or upon redemption of certain securities and for other
corporate purposes.
SECURITIES
The Senior Notes may be issued in one or more series (i) secured by the
Company's first mortgage bonds issued under either or both of the Company's
current mortgage indentures or (ii) following the Substitution Date (as
defined below), as either unsecured senior notes or as senior notes secured by
the Company's first mortgage bonds issued under a mortgage indenture other
than the Company's current mortgage indentures. On the Substitution Date, any
outstanding Senior Notes secured by the Company's first mortgage bonds when
issued will cease to be secured by first mortgage bonds issued under either of
the Company's current mortgage indentures and, at the Company's option, either
(a) will become unsecured general obligations of the Company or (b) will be
secured by first mortgage bonds issued under a mortgage indenture other than
the Company's current mortgage indentures.
Senior Notes will be issued under an indenture (the "Senior Note
Indenture"), the form of which is an exhibit to the Registration Statement,
between the Company and State Street Bank and Trust Company, as trustee (the
"Senior Note Trustee"), and are described below under the caption "Description
of Senior Notes." Prior to the Substitution Date, first mortgage bonds
securing the Senior Notes (the "Pledged Bonds") will be issued under either
(a) the Fortieth Supplemental Indenture, dated September 1, 1954, as
heretofore supplemented and amended by supplemental trust indentures and a new
supplemental trust indenture for each such series of Pledged Bonds issued
thereunder (such Fortieth Supplemental Indenture, as supplemented and as to be
supplemented, is herein referred to as the "Electric Utility Mortgage"), all
from the Company to State Street Bank and Trust Company, as successor trustee
(the "Electric Utility Mortgage Trustee") or (b) the Indenture of First
Mortgage, dated April 1, 1957, as heretofore supplemented and amended by
supplemental trust indentures and a new supplemental trust indenture for each
such series of Pledged Bonds issued thereunder (such Indenture of First
Mortgage, as supplemented and as to be supplemented is herein referred to as
the "Gas Utility Mortgage"), all from the Company, as successor to Washington
Natural Gas Company, to Harris Trust and Savings Bank, Chicago, Illinois, as
trustee (the "Gas Utility Mortgage Trustee"). The Pledged Bonds to be issued
under the Electric Utility Mortgage (the "Pledged Electric Bonds") are
described below under the caption "Pledged Electric Bonds and Electric Utility
Mortgage." The Pledged Bonds to be issued under the Gas Utility Mortgage (the
"Pledged Gas Bonds") are described below under the caption "Pledged Gas Bonds
and Gas Utility Mortgage."
There is no requirement, under either the Senior Note Indenture, the
Electric Utility Mortgage or the Gas Utility Mortgage (collectively, the
"Indentures"), that future issues of debt securities of the Company be issued
under the Indentures, and, subject to certain restrictions following the
Substitution Date which are described in "Description of Senior Notes--
Limitations on Liens" and "--Limitations on Sale-Leaseback Transactions," the
Company will be free to employ other indentures or documentation, containing
provisions different from those included in the Indentures or applicable to
one or more issues of Senior Notes, in connection with future issues of such
other debt securities.
5
<PAGE>
DESCRIPTION OF SENIOR NOTES
GENERAL
The following summaries of certain provisions of the Senior Note Indenture
do not purport to be complete and are subject to, and qualified in their
entirety by, all of the provisions of the Senior Note Indenture which is
incorporated herein by this reference and the form of which is an exhibit to
the Registration Statement of which this Prospectus is a part. References to
Section numbers under this caption are references to the Section numbers of
the Senior Note Indenture.
Until the Substitution Date (as defined below), the Senior Notes will be
secured by one or more series of Pledged Bonds issued under either the
Electric Utility Mortgage or the Gas Utility Mortgage and delivered by the
Company to the Senior Note Trustee. See "--Security; Substitution Date." ON
THE SUBSTITUTION DATE (AS DEFINED BELOW), THE SENIOR NOTES WILL CEASE TO BE
SECURED BY THE PLEDGED BONDS AND, AT THE COMPANY'S OPTION, EITHER (I) WILL
BECOME UNSECURED GENERAL OBLIGATIONS OF THE COMPANY OR (II) WILL BE SECURED BY
FIRST MORTGAGE BONDS (THE "SUBSTITUTED PLEDGED BONDS") ISSUED UNDER A MORTGAGE
INDENTURE OTHER THAN THE ELECTRIC UTILITY MORTGAGE OR THE GAS UTILITY MORTGAGE
(A "SUBSTITUTED MORTGAGE"). The Senior Note Indenture provides that, in
addition to the Senior Notes offered hereby, additional Senior Notes may be
issued thereunder, without limitation as to aggregate principal amount,
provided that, prior to the Substitution Date, the amount of Senior Notes that
may be issued cannot exceed the aggregate principal amount of first mortgage
bonds that the Company is able to issue under its Electric Utility Mortgage
and its Gas Utility Mortgage. See "Pledged Electric Bonds and Electric Utility
Mortgage--Issuance of Pledged Electric Bonds and Withdrawal of Cash Deposited
Against Such Issuance" and "Pledged Gas Bonds and Gas Utility Mortgage--
Issuance of Pledged Gas Bonds and Withdrawal of Cash Deposited Against Such
Issuance."
The Senior Note Indenture provides that the Senior Notes will be issued in
one or more series, may be issued at various times, may have differing
maturity dates and may bear interest at differing rates. The Prospectus
Supplement applicable to each series of Senior Notes will set forth any
variation in the terms and provisions of such Senior Notes and the related
series of Pledged Bonds from those described in this Prospectus. Unless
otherwise indicated in the applicable Prospectus Supplement, the Senior Notes
will be denominated in United States currency in minimum denominations of
$1,000 and integral multiples thereof.
Unless otherwise indicated in the applicable Prospectus Supplement, there
are no provisions in the Senior Note Indenture or the Senior Notes that
require the Company to redeem, or permit the holders to cause a redemption of,
the Senior Notes or that otherwise protect the holders in the event that the
Company incurs substantial additional indebtedness (except for certain
restrictions on the Company's ability to create, assume or incur certain liens
or to enter into certain financing transactions after the Substitution Date,
as described in "--Limitations on Liens" and "--Limitations on Sale-Leaseback
Transactions"), whether or not in connection with a change in control of the
Company. However, any change in control transaction that involves the
incurrence of additional long-term indebtedness (as notes, first mortgage
bonds or otherwise) by the Company in such a transaction would require
approval of state utility regulatory authorities and, possibly, of federal
utility regulatory authorities.
REGISTRATION, TRANSFER AND EXCHANGE
Senior Notes of any series will be exchangeable for other Senior Notes of
the same series of any authorized denominations and of a like aggregate
principal amount and tenor. (Section 2.06).
Unless otherwise indicated in the applicable Prospectus Supplement, Senior
Notes may be presented for registration of transfer (duly endorsed or
accompanied by a duly executed written instrument of transfer), at the office
of the Senior Note Trustee maintained for such purpose with respect to any
series of Senior Notes and referred to in the applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the Senior Note Indenture. Such transfer
or exchange will be effected upon being satisfied with the documents of title
and indemnity of the person making the request. (Sections 2.06 and 2.07).
6
<PAGE>
In the event of any redemption of Senior Notes of any series, the Senior
Note Trustee will not be required to exchange or register a transfer of any
Senior Notes of such series selected, called or being called for redemption
except, in the case of any Senior Note to be redeemed in part, the portion
thereof not to be so redeemed. (Section 2.06). See "Book-Entry System."
PAYMENT AND PAYING AGENTS
Principal of and interest and premium, if any, on Senior Notes issued in the
form of Global Notes will be paid in the manner described below under the
caption "Book-Entry System." Unless otherwise indicated in the applicable
Prospectus Supplement, interest on Senior Notes that are in the form of
certificated securities will be paid by wire transfer of clearinghouse funds
or by check mailed to the person entitled thereto at such person's address as
it appears in the register for the Senior Notes maintained by the Senior Note
Trustee; however, a holder of Senior Notes of one or more series under the
Senior Note Indenture in the aggregate principal amount of $10,000,000 or more
having the same interest payment dates will be entitled to receive payments of
interest on such series by wire transfer of immediately available funds to a
bank if appropriate wire transfer instructions have been received by the
Senior Note Trustee on or prior to the applicable regular record date.
(Section 2.12). Unless otherwise indicated in the applicable Prospectus
Supplement, the principal of, and interest at maturity and premium, if any, on
Senior Notes in the form of certificated securities will be payable in
immediately available funds at the office of the Senior Note Trustee. (Section
2.12).
All moneys paid by the Company to a paying agent for the payment of
principal of, interest or premium, if any, on any Senior Note which remain
unclaimed at the end of one year after such principal, interest or premium
shall have become due and payable will be repaid to the Company and the holder
of such Senior Note will thereafter look only to the Company for payment
thereof. (Section 5.04).
SECURITY; SUBSTITUTION DATE
Until the Substitution Date (as defined below), the Senior Notes will be
secured by one or more series of the Pledged Electric Bonds and/or by one or
more series of the Pledged Gas Bonds issued and delivered by the Company to
the Senior Note Trustee. See "Pledged Electric Bonds and Electric Utility
Mortgage" and "Pledged Gas Bonds and Gas Utility Mortgage." Upon the issuance
of Senior Notes prior to the Substitution Date, the Company will
simultaneously issue and deliver to the Senior Note Trustee, as security for
such Senior Notes, Pledged Electric Bonds or Pledged Gas Bonds. (Sections 4.01
and 4.08). Such Pledged Bonds will have the same stated rate or rates of
interest (or interest calculated in the same manner), interest payment dates,
stated maturity date and redemption provisions, and will be in the same
aggregate principal amount as the Senior Notes being issued. (Section 4.09).
The Company's obligations to make payments with respect to the principal of,
premium or interest on the Pledged Bonds will be fully or partially, as the
case may be, satisfied and discharged to the extent that, at the time that any
such payment shall be due, the then due principal of, premium or interest on
the related issue of Senior Notes shall have been fully or partially paid or
there shall have been deposited with the Senior Note Trustee pursuant to the
Senior Note Indenture sufficient available funds to fully or partially pay the
then due principal of, premium or interest on such Senior Notes. (Section
2.12).
THE "SUBSTITUTION DATE" WILL BE THE DATE THAT ALL FIRST MORTGAGE BONDS OF
THE COMPANY ISSUED AND OUTSTANDING UNDER THE ELECTRIC UTILITY MORTGAGE
("ELECTRIC BONDS"), OTHER THAN PLEDGED ELECTRIC BONDS, AND, IF ANY PLEDGED GAS
BONDS ARE THEN HELD BY THE SENIOR NOTE TRUSTEE, ALL FIRST MORTGAGE BONDS OF
THE COMPANY ISSUED AND OUTSTANDING UNDER THE GAS UTILITY MORTGAGE ("GAS BONDS"
AND, TOGETHER WITH THE ELECTRIC BONDS, THE "FIRST MORTGAGE BONDS"), OTHER THAN
PLEDGED GAS BONDS, HAVE BEEN RETIRED (AT, BEFORE OR AFTER THE MATURITY
THEREOF) THROUGH PAYMENT, REDEMPTION OR OTHERWISE (INCLUDING THOSE ELECTRIC
BONDS DEEMED TO BE PAID WITHIN THE MEANING OF THE ELECTRIC UTILITY MORTGAGE
AND THOSE GAS BONDS DEEMED TO BE PAID WITHIN THE MEANING OF THE GAS UTILITY
MORTGAGE). ON THE SUBSTITUTION DATE, THE SENIOR NOTE TRUSTEE WILL DELIVER TO
THE COMPANY FOR CANCELLATION ALL PLEDGED BONDS, AND THE COMPANY WILL CAUSE THE
SENIOR NOTE TRUSTEE TO PROVIDE NOTICE TO ALL HOLDERS OF SENIOR NOTES OF THE
OCCURRENCE OF THE SUBSTITUTION DATE. AS A RESULT, ON THE SUBSTITUTION DATE,
THE PLEDGED BONDS WILL CEASE TO SECURE THE SENIOR NOTES, AND, AT THE
7
<PAGE>
OPTION OF THE COMPANY, THE SENIOR NOTES EITHER (I) WILL BECOME UNSECURED
GENERAL OBLIGATIONS OF THE COMPANY OR (II) WILL BE SECURED BY SUBSTITUTED
PLEDGED BONDS. (Section 4.11). Each issue of Pledged Bonds will be an issue of
Electric Bonds or Gas Bonds of the Company, all of which are secured by a lien
on certain property owned by the Company. In certain circumstances prior to
the Substitution Date, the Company is permitted to reduce the aggregate
principal amount of an issue of Pledged Bonds held by the Senior Note Trustee,
but in no event to an amount lower than the aggregate outstanding principal
amount of the Senior Notes initially issued contemporaneously with such
Pledged Bonds. (Section 4.07). Following the Substitution Date, the Company
will cause the Electric Utility Mortgage and the Gas Utility Mortgage to be
closed, and the Company will not issue any additional bonds under either such
Indenture. (Section 4.10).
LIMITATIONS ON LIENS
Under the terms of the Senior Note Indenture, the Company may not issue any
First Mortgage Bonds other than Pledged Bonds, and the Company will be
precluded after the Substitution Date from issuing additional Electric Bonds
or Gas Bonds. In addition, except as described below and unless Substituted
Pledged Bonds are issued to secure the Senior Notes, after the Substitution
Date the Company may not create, assume or incur any mortgage, pledge, lien or
security interest (collectively referred to in this section and under "--
Limitations on Sale-Leaseback Transactions" as "mortgages") upon any real
property interest or other depreciable asset which is used in the Company's
electric or gas utility business, whether owned at the Substitution Date or
thereafter acquired, to secure any indebtedness for money borrowed other than
indebtedness with maturities of twelve months or less ("Debt"), without
effectively securing all Senior Notes (other than such Senior Notes, if any,
which shall by their terms be expressly excluded from such provision) equally
and ratably with such Debt; provided, however, that this restriction will not
apply to:
(a) mortgages on any property existing at the time of the property's
acquisition (but excluding any extension of or addition to such property
unless the terms of the mortgage as of the date of acquisition of such
property provide that such mortgage shall be secured by such extensions or
additions);
(b) mortgages to secure the payment of all or part of the purchase price
of property or to secure any Debt incurred prior to, at the time of or
within 180 days after the acquisition of such property for the purpose of
financing all or part of the purchase price of such property;
(c) mortgages secured by property used in the generation of electricity;
(d) mortgages existing as of the date of the Senior Note Indenture;
(e) certain permitted encumbrances similar to the permitted encumbrances
under the Electric Utility Mortgage;
(f) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any mortgage referred to
in clauses (a) through (e); provided, however, that the principal amount of
Debt secured thereby may not exceed the principal amount of Debt (plus any
premium or fee payable in connection with such extension, renewal or
replacement) so secured at the time of such extension, renewal or
replacement; and provided, further, that such mortgage must be limited to
all or such part of the property which was subject to the mortgage so
extended, renewed or replaced (plus improvements on such property);
(g) mortgages in favor of the United States, any State thereof, any other
country or any political subdivision of any of the foregoing, to secure
partial, progress, advance or other payments under any contract or statute;
or
(h) mortgages securing industrial development, pollution control or
similar revenue bonds.
Notwithstanding the foregoing restriction, the Company may create, assume or
incur any mortgage not excepted above without equally and ratably securing the
Senior Notes if the aggregate amount of all Debt then outstanding and secured
by such mortgage or any other mortgage not excepted above, together with all
net sale
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proceeds from Sale-Leaseback Transactions (as defined below) which are not
described in clause (i) or (ii) under "--Limitations on Sale-Leaseback
Transactions" below, does not exceed 15% of the Company's total consolidated
capitalization as shown on its latest audited consolidated balance sheet.
(Section 6.07).
LIMITATIONS ON SALE-LEASEBACK TRANSACTIONS
Except as described below and unless Substituted Pledged Bonds are issued to
secure the Senior Notes, from and after the Substitution Date the Company may
not sell or transfer any real property interest or other depreciable asset,
with the Company taking back a lease of such property (any such transaction, a
"Sale-Leaseback Transaction"), unless (i) such Sale-Leaseback Transaction
occurs within 180 days after the later of the date of acquisition of such
property or the date of the completion of construction or commencement of full
operations on such property or (ii) within 120 days after such Sale-Leaseback
Transaction, the Company applies or causes to be applied to the retirement of
Debt of the Company (other than Debt which is subordinate in right of payment
to the Senior Notes) an amount not less than the net proceeds of the sale of
such property. (Section 6.07)
Notwithstanding the foregoing restriction, the Company may effect any Sale-
Leaseback Transaction not excepted above if the net sale proceeds from such
Sale-Leaseback Transaction, together with the net sale proceeds from all other
Sale-Leaseback Transactions not excepted above and all Debt then outstanding
and secured by mortgages not described in any of clauses (a) through (h) under
"--Limitations on Liens," does not exceed 15% of the Company's total
consolidated capitalization as shown on its latest audited consolidated
balance sheet. The Company may also effect any Sale-Leaseback Transaction
involving a lease for a period, including renewals, of not more than 36
months. (Section 6.07).
EVENTS OF DEFAULT
The following constitute events of default under the Senior Note Indenture:
(a) default in the payment of principal or premium, if any, on any Senior Note
when due and payable and continuance of such default for five days; (b)
default in the payment of interest on any Senior Note when due which continues
for 30 days; (c) default in the performance or breach of any other covenant or
warranty of the Company in the Senior Note Indenture and the continuation
thereof for 90 days after written notice to the Company as provided in the
Senior Note Indenture; (d) prior to the Substitution Date, the occurrence of a
default under the Electric Utility Mortgage, of which default the Electric
Utility Mortgage Trustee or the holders of a majority in aggregate principal
amount of the outstanding Senior Notes have given written notice to the Senior
Note Trustee; (e) prior to the Substitution Date, the occurrence of a default
under the Gas Utility Mortgage, of which default the Gas Utility Mortgage
Trustee or the holders of a majority in aggregate principal amount of the
outstanding Senior Notes have given written notice to the Senior Note Trustee;
(f) if any Substituted Pledged Bonds are outstanding, the occurrence of a
default under the Substituted Mortgage, of which default the trustee under
such Substituted Mortgage or the holders of a majority in aggregate principal
amount of the outstanding Senior Notes have given written notice to the Senior
Note Trustee; and (g) certain events of bankruptcy, insolvency or
reorganization of the Company. (Section 8.01).
If an event of default occurs and is continuing, either the Senior Note
Trustee or the holders of a majority in principal amount of the outstanding
Senior Notes may declare the principal amount of all Senior Notes to be due
and payable immediately. Upon such acceleration of the Senior Notes, the
Senior Note Trustee is empowered to cause the mandatory redemption of the
Pledged Bonds or Substituted Pledged Bonds under the terms of the Electric
Utility Mortgage, Gas Utility Mortgage or the Substituted Mortgage, as the
case may be. At any time after an acceleration of the Senior Notes has been
declared, but before a judgment or decree for the immediate payment of the
principal amount of the Senior Notes has been obtained, and so long as all
first mortgage bonds have not been accelerated, if the Company pays or
deposits with the Senior Note Trustee a sum sufficient to pay all matured
installments of interest, the principal and any premium which has become due
otherwise than by acceleration and any other amounts due the Senior Note
Trustee, and all defaults shall have been cured or waived, then such payment
or deposit will cause an automatic rescission and annulment of the
acceleration of the Senior Notes. (Section 8.01).
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The Senior Note Indenture provides that the Senior Note Trustee generally
will be under no obligation to exercise any of its rights or powers under the
Senior Note Indenture at the request or direction of any of the holders unless
such holders have offered to the Senior Note Trustee reasonable security or
indemnity against the liabilities and costs which may be incurred by such
exercise. (Section 9.02). The holders of a majority in principal amount of the
outstanding Senior Notes generally will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Senior Note Trustee, or of exercising any trust or power conferred on the
Senior Note Trustee, with respect to the Senior Notes. (Section 8.07). Each
holder of any Senior Note has the right to institute a proceeding with respect
to the Senior Note Indenture, but such right is subject to certain conditions
precedent specified in the Senior Note Indenture. (Section 8.04). The Senior
Note Indenture provides that the Senior Note Trustee, within 90 days after the
occurrence of a default with respect to the Senior Notes, is required to give
the holders of the Senior Notes notice of such default, unless cured or
waived, but, except in the case of default in the payment of principal of, or
premium, if any, or interest on any Senior Notes, the Senior Note Trustee may
withhold such notice if it determines in good faith that it is in the interest
of such holders to do so. (Section 8.08). The Company is required to deliver
to the Senior Note Trustee each year a certificate as to whether or not, to
the knowledge of the officers signing such certificate, the Company is in
compliance with the conditions and covenants under the Senior Note Indenture.
(Section 6.06).
MODIFICATION
Modification and amendment of the Senior Note Indenture may be effected by
the Company and the Senior Note Trustee with the consent of the holders of a
majority in principal amount of the outstanding Senior Notes affected thereby,
provided that no such modification or amendment may, without the consent of
the holder of each outstanding Senior Note affected thereby, (a) change the
maturity date of any Senior Note; (b) reduce the rate or extend the time of
payment of interest on any Senior Note; (c) reduce the principal amount of, or
premium payable on, any Senior Note; (d) change the coin or currency of any
payment of principal of, or any premium or interest on, any Senior Note; (e)
change the date on which any Senior Note may be redeemed or adversely affect
the rights of a holder to institute suit for the enforcement of any payment on
or with respect to any Senior Note; (f) impair the interest of the Senior Note
Trustee in the Pledged Bonds or Substituted Pledged Bonds held by it or, prior
to the Substitution Date, reduce the principal amount of any issue of Pledged
Bonds or Substituted Pledged Bonds securing the Senior Notes to an amount less
than the principal amount of the related issue of Senior Notes or alter the
payment provisions of such Pledged Bonds or Substituted Pledged Bonds in a
manner adverse to the holders of the Senior Notes; or (g) modify the foregoing
requirements or reduce the percentage of outstanding Senior Notes necessary to
modify or amend the Senior Note Indenture or to waive any past default to less
than a majority. Modification and amendment of the Senior Note Indenture may
be effected by the Company and the Senior Note Trustee without the consent of
the holders (a) to add to the covenants of the Company for the benefit of the
holders or to surrender a right conferred on the Company in the Senior Note
Indenture; (b) to add further security for the Senior Notes; (c) to make
certain other modifications, generally of a ministerial or immaterial nature;
or (d) to make certain other modifications which are not prejudicial to the
interests of the holders of the Senior Notes. (Sections 13.01 and 13.02).
DEFEASANCE AND DISCHARGE
The Senior Note Indenture provides that the Company will be discharged from
any and all obligations in respect to the Senior Notes and the Senior Note
Indenture (except for certain obligations such as obligations to register the
transfer or exchange of Senior Notes, replace stolen, lost or mutilated Senior
Notes and maintain paying agencies) if, among other things, the Company
irrevocably deposits with the Senior Note Trustee, in trust for the benefit of
holders of Senior Notes, money or certain United States government
obligations, or any combination thereof, which through the payment of interest
thereon and principal thereof in accordance with their terms will provide
money in an amount sufficient, without reinvestment, to make all payments of
principal of, and any premium and interest on, the Senior Notes on the dates
such payments are due in accordance with the terms of the Senior Note
Indenture and the Senior Notes provided that, unless all of the Senior Notes
are to be due within 90 days of such deposit by redemption or otherwise, the
Company shall also have delivered to the
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Senior Note Trustee an opinion of counsel to the effect that the holders of
the Senior Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such defeasance or discharge of the Senior Note
Indenture. Thereafter, the holders of Senior Notes must look only to such
deposit for payment of the principal of, and interest and any premium on, the
Senior Notes. (Section 5.01).
CONSOLIDATION, MERGER AND SALE OR DISPOSITION OF ASSETS
The Company will not consolidate with or merge into any other corporation or
sell, transfer or otherwise dispose of all or substantially all its assets
unless the successor or transferee corporation assumes by supplemental
indenture the due and punctual payment of the principal of and premium and
interest on all the Senior Notes and the performance of every covenant of the
Senior Note Indenture to be performed or observed by the Company and (i) if
such transaction occurs prior to the Substitution Date, unless the successor
or transferee corporation assumes the Company's obligations under the Electric
Utility Mortgage and the Gas Utility Mortgage with respect to the Pledged
Bonds, or (ii) if such transaction occurs on or after the Substitution Date
and Substituted Pledged Bonds are outstanding, unless the successor or
transferee corporation assumes the Company's obligations under the Substituted
Mortgage with respect to the Substituted Pledged Bonds. Upon any such
consolidation, merger, sale, transfer or other disposition of all or
substantially all of the assets of the Company, the successor corporation
formed by such consolidation or into which the Company is merged or to which
such transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under the Senior Note Indenture
with the same effect as if such successor corporation had been named as the
Company therein and the Company will be released from all obligations under
the Senior Note Indenture. The Senior Note Indenture defines "all or
substantially all" of the assets of the Company as being 50% or more of the
total assets of the Company as shown on the balance sheet of the Company as of
the end of the prior year and specifically permits any such sale, transfer or
other disposition during a calendar year of less than 50% of total assets
without the consent of the holders of the Senior Notes and without the
assumption by the transferee of the Company's obligations on the Senior Notes
and covenants contained in the Senior Note Indenture. (Sections 12.01 and
12.02).
VOTING OF PLEDGED BONDS HELD BY SENIOR NOTE TRUSTEE
The Senior Note Trustee, as a holder of Pledged Electric Bonds and/or
Pledged Gas Bonds, will attend any meeting of bondholders under the Electric
Utility Mortgage or the Gas Utility Mortgage, as the case may be, as to which
it receives due notice, or, at its option, will deliver its proxy in
connection therewith. Either at such meeting, or otherwise where the consent
of holders of Electric Bonds or Gas Bonds is sought without a meeting, the
Senior Note Trustee will vote all of the Pledged Electric Bonds or Pledged Gas
Bonds held by it, or will consent with respect thereto, as directed by the
holders of a majority in aggregate principal amount of the outstanding Senior
Notes; provided, however, that the Senior Note Trustee shall not be required
to vote the Pledged Bonds of any particular issue in favor of, or give consent
to, any action except upon notification by the Senior Note Trustee to the
holders of the related issue of Senior Notes of such proposal and consent
thereto of the holders of a majority in principal amount of the outstanding
Senior Notes of such issue. (Section 4.03).
RESIGNATION OR REMOVAL OF SENIOR NOTE TRUSTEE
The Senior Note Trustee may resign at any time upon written notice to the
Company specifying the day upon which the resignation is to take effect and
such resignation will take effect immediately upon the later of the
appointment of a successor Senior Note Trustee and such specified day.
(Section 9.10).
The Senior Note Trustee may be removed at any time by an instrument or
concurrent instruments in writing filed with the Senior Note Trustee and
signed by the holders, or their attorneys-in-fact, of at least a majority in
principal amount of the then outstanding Senior Notes. In addition, so long as
no event of default or event which,
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with the giving of notice or lapse of time or both, would become an event of
default has occurred and is continuing, the Company may remove the Senior Note
Trustee upon notice to the holder of each Senior Note outstanding and the
Senior Note Trustee, and appointment of a successor Senior Note Trustee.
(Section 9.10).
CONCERNING THE SENIOR NOTE TRUSTEE
State Street Bank and Trust Company is the Senior Note Trustee under the
Senior Note Indenture. The Senior Note Trustee also acts as trustee for the
Company's Electric Bonds. Though the Company does not currently maintain any
other banking relationships with the Senior Note Trustee in the ordinary course
of business, it may choose to do so in the future.
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PLEDGED ELECTRIC BONDS AND ELECTRIC UTILITY MORTGAGE
GENERAL
The Pledged Electric Bonds issued as security for Senior Notes will be
series of Electric Bonds issued under the Electric Utility Mortgage and a new
supplemental trust indenture for each such series of Pledged Electric Bonds,
all from the Company to the Electric Utility Mortgage Trustee. Copies of the
Electric Utility Mortgage and the form of supplemental indenture for the
Pledged Electric Bonds are filed as exhibits to the Registration Statement of
which this Prospectus is a part. The following summaries of certain provisions
of the Electric Utility Mortgage do not purport to be complete and are subject
to, and qualified in their entirety by, the detailed provisions of the
Electric Utility Mortgage which are incorporated herein by this reference.
References to Article and Section numbers under this caption are references to
Article and Section numbers of the Electric Utility Mortgage unless otherwise
indicated. Unless the context indicates otherwise, words or phrases defined in
the Electric Utility Mortgage are capitalized and used with the same meanings
under this caption.
TERMS OF PLEDGED ELECTRIC BONDS
Pledged Electric Bonds will be issued to the Senior Note Trustee. Each issue
of Pledged Electric Bonds to the Senior Note Trustee will be in a principal
amount equal to the principal amount of the Senior Notes issued
contemporaneously with such Pledged Electric Bonds. The Company's obligations
to make payments with respect to the principal of, premium or interest on the
Pledged Electric Bonds will be fully or partially, as the case may be,
satisfied and discharged to the extent that, at the time that any such payment
shall be due, the then due principal of, premium or interest on the related
issue of Senior Notes shall have been fully or partially paid or there shall
have been deposited with the Senior Note Trustee pursuant to the Senior Note
Indenture sufficient available funds to fully or partially pay the then due
principal of, premium or interest on such Senior Notes. The Pledged Electric
Bonds will be exchangeable for a like aggregate principal amount of Pledged
Electric Bonds of the same series of other authorized denominations at the
office of the Electric Utility Mortgage Trustee in Boston, Massachusetts,
without payment of any charge other than for any stamp tax or other
governmental charge incidental thereto.
The Electric Utility Mortgage does not contain any covenants or other
provisions that are specifically intended to afford holders of the Pledged
Electric Bonds special protection in the event of a highly leveraged
transaction.
The Prospectus Supplement applicable to each series of Senior Notes will set
forth any variation in the terms and provisions of the related series of
Pledged Electric Bonds, if any, from those described in this Prospectus. Each
issue of Pledged Electric Bonds will have the same stated rate or rates of
interest (or interest calculated in the same manner), interest payment dates,
stated maturity date and redemption provisions, and will be in the same
aggregate principal amount, as the related issue of Senior Notes.
DEPRECIATION FUND
The Company will pay cash or deliver Electric Bonds of any series to the
Electric Utility Mortgage Trustee by May 31 of each year in an amount equal to
the minimum provision for depreciation for the preceding year (i.e., an amount
by which 15% of gross utility operating revenues of the Company, after
deducting cost of electricity purchased and rental and lease payments, exceeds
maintenance, repairs and renewals). Cash held in the depreciation fund may be
applied to the retirement of the Electric Bonds of certain of the Secured
Medium-Term Notes, Series A, certain of the Secured Medium-Term Notes, Series
B, the 7.05% Series due 2021, the 7.25% Series due 2021 and the 6.80% Series
due 2022 (the last three series were issued as collateral for City of Forsyth,
Rosebud County, Montana, Pollution Control Revenue Refunding Bonds) at a price
not exceeding the applicable Regular Redemption Price thereof, or other
Electric Bonds at a price not exceeding the applicable Special Redemption
Price thereof. In lieu of paying cash or delivering Electric Bonds, the
Company will have the option of satisfying this obligation through the use of
unfunded property additions or unfunded Electric Bond
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credits, or both. Cash and Electric Bonds held in such fund may also be
withdrawn by using either of the aforesaid credits. (Section Four, Article II,
Part I). For information on the proposed modification of the depreciation fund
requirements, see "--Consent by Holders of the Pledged Electric Bonds to
Modification of Mortgage."
TITLES AND KIND AND PRIORITY OF LIEN
The Pledged Electric Bonds are to be secured equally and ratably with all
other Electric Bonds heretofore or hereafter issued under the Electric Utility
Mortgage by a valid and direct first mortgage of the Company's electric
utility property, and on its electric franchises and permits, except as stated
below and subject only to permitted encumbrances. (Granting Clauses).
The Electric Utility Mortgage permits the Company to acquire utility
property subject to certain prior liens. The Electric Utility Mortgage
requires that there shall be subjected to the lien thereof (subject to certain
liabilities in cases of mergers and consolidations) all utility property
(other than excepted property) which the Company may hereafter acquire.
(Granting Clauses of the Electric Utility Mortgage and Sections 9.06, 9.10 and
14.04). The lien of the Electric Utility Mortgage is subject to the lien of
the Gas Utility Mortgage with respect to the gas utility property of WNG
acquired in connection with the Merger, as well as all substitutions,
replacements, additions, betterments, developments, extensions and
enlargements to, of or upon such gas utility property. (Sections 9.07, 9.10
and 14.05 of the Electric Utility Mortgage and Section 14.03 of the Gas
Utility Mortgage). See "Pledged Gas Bonds and Gas Utility Mortgage--Titles and
Kind and Priority of Lien."
There are excepted from the lien of the Electric Utility Mortgage: cash,
securities, notes, accounts receivable and similar instruments; conditional
sales, appliance rental or lease agreements; materials and supplies;
merchandise held for the purpose of sale, lease or distribution; fuel
(including fissionable material) and personal property consumable in
operations; oil, gas and other minerals and timber under or upon lands of the
Company; office furniture and equipment, automobiles and similar
transportation equipment; nonutility property and certain property of a
successor corporation in a merger or consolidation. (Section 20.01).
DIVIDEND RESTRICTION
So long as any of the Electric Bonds are outstanding, the Company shall not
(i) declare or pay any dividends (other than dividends payable in the
Company's common stock) or make any other distribution on any shares of its
common stock or (ii) purchase, redeem or otherwise retire for consideration
any shares of stock except out of net income available for dividends on its
common stock (as defined), accumulated after December 31, 1957, plus the sum
of $7,500,000. (Section 1.05 of the Forty-fourth Supplemental Indenture to the
Electric Utility Mortgage).
ISSUANCE OF ELECTRIC BONDS AND WITHDRAWAL OF CASH DEPOSITED AGAINST SUCH
ISSUANCE
The principal amount of Electric Bonds which may be issued under the
Electric Utility Mortgage is not limited, provided that the issuance tests in
the Electric Utility Mortgage are satisfied. (Section 3.01). Electric Bonds
may be issued from time to time against (i) 60% of unfunded net additions
(Section 5.03), (ii) deposit of cash (Section 5.04) and/or (iii) 100% of
unfunded Electric Bond credits (Section 5.05). The issuance of Electric Bonds
against unfunded net additions, and the issuance of Electric Bonds for other
purposes, with certain exceptions, is subject to net earnings available for
interest being at least two times the annual interest requirement on all
Electric Bonds and prior lien debt to be outstanding. (Section 1.42). Cash
deposited is withdrawable against 60% of unfunded net additions and 100% of
unfunded Electric Bond credits (Sections 8.02 and 8.03).
MODIFICATION OF MORTGAGE
The rights of the bondholders under the Electric Utility Mortgage may be
modified with the consent of the holders of 66 2/3% of the Electric Bonds,
including the consent of the holders of 66 2/3% of the Electric Bonds of each
series affected by the proposed modification. In general, no adverse
modification of the terms of payment
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and no modification permitting additional prior or parity liens, or reducing
the percentage of Electric Bonds required for modification, is effective
against any bondholder without the consent of such holder. (Section 18.02).
THE ELECTRIC UTILITY MORTGAGE TRUSTEE
The holders of a majority in principal amount of the Electric Bonds have the
right to require the Electric Utility Mortgage Trustee to enforce the Electric
Utility Mortgage, but the Electric Utility Mortgage Trustee is entitled to
receive reasonable indemnity and under certain circumstances is not required
to act (Section 12.20).
DEFAULTS AND NOTICES
A default under the Electric Utility Mortgage is defined as (i) failure to
pay the principal and premium when due or interest for 30 days after becoming
due, (ii) failure to satisfy any sinking, improvement or depreciation fund
obligation for 60 days after becoming due, (iii) failure for 90 days after
notice to observe other covenants or conditions, (iv) entry of an order for
reorganization or appointment of a trustee or receiver and continuance of such
order or appointment unstayed for 90 days, (v) certain adjudications,
petitions or consents in bankruptcy, insolvency or reorganization proceedings
and (vi) rendering of a judgment in excess of $100,000 and its continuance
unsatisfied for 90 days. (Section 12.01).
The Electric Utility Mortgage does not require the filing with the Trustee
of any periodic evidence as to the absence of default or as to compliance with
the terms of the Electric Utility Mortgage.
CONSENT BY HOLDERS OF THE PLEDGED ELECTRIC BONDS TO MODIFICATION OF FIRST
MORTGAGE INDENTURE
The Company anticipates that its fuel costs may increase in future years as
it utilizes its combustion turbines and other thermal resources. The
offsetting increases in revenues may escalate the minimum provision for
depreciation (15% of operating revenues less certain deductions) out of
proportion to reasonable maintenance and replacement needs. This distortion
would adversely affect the calculation of unfunded net property additions
available for certain purposes under the Electric Utility Mortgage, including
issuance of Pledged Electric Bonds.
In such event, the Company would propose to modify the Electric Utility
Mortgage by reducing the amount of operating revenues used in determining the
minimum provision for depreciation by the amount of fuel costs.
Each supplemental indenture for a new series of Pledged Electric Bonds will
provide that each holder of the Pledged Electric Bonds, by his acceptance
thereof, consents to such modification. This modification has been similarly
consented to by the holders of the Electric Bonds of the Secured Medium-Term
Notes, Series A and the Secured Medium Term Notes, Series B. The Sixty-seventh
Supplemental Indenture to the Electric Utility Mortgage provides that the
trustee holding the Electric Bonds issued under said Supplemental Indenture as
collateral for the Puget Energy, Inc. Guaranteed Collateralized Bonds consents
to such modification on behalf of the holders of such Guaranteed
Collateralized Bonds. The Seventy-second and Seventy-third Supplemental
Indentures to the Electric Utility Mortgage provide that the trustees holding
Electric Bonds issued under said Supplemental Indentures as collateral for
City of Forsyth, Rosebud County, Montana, Pollution Control Revenue Refunding
Bonds consent to such modification on behalf of the holders of such Pollution
Control Revenue Refunding Bonds. The modification will become effective when
consents have been obtained from the holders of 66 2/3% in principal amount of
each other series of Electric Bonds at the time outstanding.
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PLEDGED GAS BONDS AND GAS UTILITY MORTGAGE
GENERAL
The Pledged Gas Bonds issued as security for Senior Notes will be series of
Gas Bonds issued under the Gas Utility Mortgage and a new supplemental trust
indenture for each such series of Pledged Gas Bonds, all from the Company to
the Gas Utility Mortgage Trustee. A copy of the Gas Utility Mortgage is filed
as an exhibit to the Registration Statement of which this Prospectus is a
part. The following summaries of certain provisions of the Gas Utility
Mortgage do not purport to be complete and are subject to, and qualified in
their entirety by, the detailed provisions of the Gas Utility Mortgage which
are incorporated herein by this reference. References to Article and Section
numbers under this caption are references to Article and Section numbers of
the Gas Utility Mortgage unless otherwise indicated. Unless the context
indicates otherwise, words or phrases defined in the Gas Utility Mortgage are
capitalized and used with the same meanings under this caption.
TERMS OF PLEDGED GAS BONDS
Pledged Gas Bonds will be issued to the Senior Note Trustee. Each issue of
Pledged Gas Bonds to the Senior Note Trustee will be in a principal amount
equal to the principal amount of the Senior Notes issued contemporaneously
with such Pledged Gas Bonds. The Company's obligations to make payments with
respect to the principal of, premium or interest on the Pledged Gas Bonds will
be fully or partially, as the case may be, satisfied and discharged to the
extent that, at the time that any such payment shall be due, the then due
principal of, premium or interest on the related issue of Senior Notes shall
have been fully or partially paid or there shall have been deposited with the
Senior Note Trustee pursuant to the Senior Note Indenture sufficient available
funds to fully or partially pay the then due principal of, premium or interest
on such Senior Notes. The Pledged Gas Bonds will be exchangeable for a like
aggregate principal amount of Pledged Gas Bonds of the same series of other
authorized denominations at the office of the Gas Utility Mortgage Trustee in
Chicago, Illinois, without payment of any charge other than for any stamp tax
or other governmental charge incidental thereto.
The Gas Utility Mortgage does not contain any covenants or other provisions
that are specifically intended to afford holders of the Pledged Gas Bonds
special protection in the event of a highly leveraged transaction.
The Prospectus Supplement applicable to each series of Senior Notes will set
forth any variation in the terms and provisions of the related series of
Pledged Gas Bonds, if any, from those described in this Prospectus. Each issue
of Pledged Gas Bonds will have the same stated rate or rates of interest (or
interest calculated in the same manner), interest payment dates, maturity date
and redemption provisions, and will be in the same aggregate principal amount,
as the related issue of Senior Notes.
RENEWAL FUND
The Company will pay cash and/or deliver Gas Bonds (taken at the principal
amount thereof) to the Gas Utility Mortgage Trustee for deposit into a renewal
fund on or before May 1 of each year in an amount equal to the greater of
(a) the aggregate amount of the minimum provision for depreciation (i.e.,
an amount computed at the rate of 2% per annum, or such other rate as may
be permitted or required by the Washington Utilities and Transportation
Commission, of the book value of depreciable gas utility property subject
to the lien of the Gas Utility Mortgage and not to prior liens) from March
1, 1957 to the end of the next preceding calendar year; or
(b) the aggregate amount of retirements for the same period;
in excess of the greater of
(i) the aggregate amounts for the minimum provision for depreciation or
retirements, whichever is greater, shown in the next preceding renewal fund
certificate filed with the Gas Utility Mortgage Trustee pursuant to the
requirements of Section 4.04 of the Gas Utility Mortgage; or
(ii) the aggregate amounts for the minimum provision for depreciation or
retirements, whichever is greater, shown in the latest certificate of
available net additions delivered to the Gas Utility Mortgage Trustee
pursuant to Section 2.01 of the Gas Utility Mortgage;
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less the aggregate amount of Gas Bonds retired by sinking fund operations, not
theretofore used as a credit on account of the renewal fund in previous renewal
fund certificates. The renewal fund obligation may be satisfied in whole or in
part by credits consisting of unfunded property additions and/or unfunded Gas
Bond credits. (Section 4.04).
Any cash deposited in the renewal fund, if and to the extent that the Company
at the time does not have property additions available for use as a credit to
satisfy such renewal fund obligation, may, upon the written order of the
Company, be applied by the Gas Utility Mortgage Trustee to the redemption of
certain Gas Bonds or, if not so applied pursuant to the provisions of the Gas
Utility Mortgage, to the retirement of Gas Bonds. (Section 4.04).
TITLES AND KIND AND PRIORITY OF LIEN
The Pledged Gas Bonds are to be secured equally and ratably with all other
Gas Bonds heretofore issued under the Gas Utility Mortgage by a valid and
direct first mortgage of the Company's gas utility property (except as stated
below) and on its gas utility franchises and permits and gas purchase contracts
(Section 9.14 and Article Two of the Seventh Supplemental Indenture to the Gas
Utility Mortgage), subject only to permitted encumbrances (Granting Clause VI
and Section 1.39) and certain minor exceptions (Granting Clause IX).
Notwithstanding the foregoing, there is excepted from the lien of the Gas
Utility Mortgage, among other things, all property owned by Puget Sound Power &
Light Company immediately prior to the effective time of the Merger, as well as
any property acquired by the Company after the Merger (except substitutions,
replacements, additions, betterments, developments, extensions and enlargements
to, of or upon the gas utility property owned by WNG at the time of the
Merger). (Section 1.03 of the Thirty-first Supplemental Indenture to the Gas
Utility Mortgage).
The Gas Utility Mortgage permits the Company to acquire gas utility property
subject to prior liens, but such property shall not be deemed to be "property
additions" under the Gas Utility Mortgage unless and until such prior lien is
paid. At such time as title to such property shall vest in the Company free and
clear of such prior lien, then such property shall be subject to the lien of
the Gas Utility Mortgage, subject only to the permitted encumbrances and
exceptions referred to herein (Sections 1.28, 9.07 and 9.10).
There are excepted from the lien of the Gas Utility Mortgage: cash,
securities, notes, accounts receivable and similar instruments; conditional
sales, appliance rental or lease agreements; materials and supplies;
merchandise held for the purpose of sale, lease or distribution; gas or liquid
hydrocarbons in pipe lines and in storage; fuel and personal property
consumable in operations; oil, gas and other minerals and timber under or upon
lands of the Company; office furniture and equipment, automobiles and similar
transportation equipment; nonutility property and certain property of a
successor corporation in a merger or consolidation. (Granting Clause IX).
DIVIDEND RESTRICTION
So long as any of the Company's Secured Medium Term Notes, Series C, issued
under the Gas Utility Mortgage, are outstanding, the Company shall not (i)
declare or pay any dividends (other than dividends payable in the Company's
common stock) or make any other distribution on any shares of its common stock
or (ii) purchase, redeem or otherwise retire for consideration any shares of
stock (other than in exchange for, or from the net cash proceeds of, other new
shares of capital stock of the Company and other than any shares of any class
of stock ranking as to dividends or assets prior to the Company's common stock
required to be purchased, redeemed or otherwise retired for any sinking fund or
purchase fund for such class of stock), if the aggregate amount of all such
dividends, distributions and expenditures made since September 30, 1994 would
exceed the aggregate amount of the net income of the Company accumulated after
September 30, 1994 plus the sum of $20,000,000. (Section 1.04 of the Thirtieth
Supplemental Indenture to the Gas Utility Mortgage).
17
<PAGE>
ISSUANCE OF GAS BONDS AND WITHDRAWAL OF CASH DEPOSITED AGAINST SUCH ISSUANCE
The principal amount of Gas Bonds issuable under the Gas Utility Mortgage is
not limited, provided that the issuance tests in the Gas Utility Mortgage are
satisfied. (Section 3.01). Gas Bonds may be issued from time to time against
(i) 60% of unfunded net additions (Section 5.03); (ii) deposit of cash
(Section 5.04); and/or (iii) 100% of unfunded Gas Bond credits (Section 5.05).
With certain exceptions, the issuance of Gas Bonds is subject to net earnings
available for interest being at least (a) two times the annual interest
requirements on all Gas Bonds and prior lien debt to be outstanding (Section
1.41) and (b) 1.75 times the annual interest charges on all indebtedness of
the Company to be outstanding immediately after such issuance. (Section 1.05
of the Thirtieth Supplemental Indenture to the Gas Utility Mortgage). Cash
deposited is withdrawable against 60% of unfunded net additions in the case of
moneys on deposit with the Gas Utility Mortgage Trustee for the purpose
described in clause (ii) of this paragraph, 100% of the amount of unfunded net
additions in the case of any other trust moneys and 100% of unfunded Gas Bond
credits. (Section 8.02 and 8.03).
MODIFICATION OF MORTGAGE
The rights of the bondholders under the Gas Utility Mortgage may be modified
with the consent of the holders of 66 2/3% of the Gas Bonds, including the
consent of the holders of 66 2/3% of the Gas Bonds of each series affected by
the proposed modification. In general, no adverse modification of the terms of
payment and no modification permitting additional prior or parity liens, or
reducing the percentage of Gas Bonds required for modification, is effective
against any bondholder without the consent of such holder. (Section 18.02).
THE GAS UTILITY MORTGAGE TRUSTEE
The holders of a majority in principal amount of the Gas Bonds have the
right to require the Gas Utility Mortgage Trustee to enforce the Gas Utility
Mortgage, but the Gas Utility Mortgage Trustee is entitled to receive
reasonable indemnity and under certain circumstances is not required to act.
(Section 12.20).
DEFAULTS AND NOTICES
An event of default under the Gas Utility Mortgage is defined as (i) failure
to pay the principal and premium when due, (ii) failure to pay interest for 10
days after becoming due, (iii) failure to satisfy any sinking, renewal,
improvement, maintenance or depreciation fund obligation for 30 days after
becoming due, (iv) failure for 30 days after notice to observe other covenants
or conditions, (v) entry of an order for reorganization or appointment of a
trustee or receiver or for the liquidation of the Company or the attachment of
the Company's property and continuance of such order, appointment or
attachment unstayed for 60 days, (vi) certain adjudications, petitions or
consents in bankruptcy, insolvency or reorganization proceedings, (vii)
failure to pay any part of the principal of, premium, if any, or interest on,
or any other payment of money due under any indebtedness (other than the Gas
Bonds) in an aggregate outstanding amount of $500,000 or more, or the failure
by the Company to perform or observe any other agreement, term or condition
contained in any document evidencing or securing such indebtedness, if the
effect of such failure is to cause, or to permit the holders of such
indebtedness to cause, or permit any other party to such indebtedness to
cause, any payment in respect of such indebtedness to become due prior to its
due date, and (viii) rendering of a judgment in excess of $100,000 and its
continuance unsatisfied for 90 days. (Section 12.01 and Article IV of the
Twenty-second Supplemental Indenture).
The Gas Utility Mortgage does not require the filing with the Gas Utility
Mortgage Trustee of any periodic evidence as to the absence of default or as
to compliance with the terms of the Gas Utility Mortgage.
18
<PAGE>
BOOK-ENTRY SYSTEM
Each series of Senior Notes may be issued in the form of one or more Global
Notes representing all or part of such series of Senior Notes and which will
be deposited with or on behalf of the Depository and registered in the name of
the Depository or a nominee of the Depository.
The following is based solely on information furnished by DTC:
Unless otherwise specified in the Prospectus Supplement, DTC will act as
Depository for those Senior Notes issued as Global Notes. The Global Notes
will be issued as fully-registered securities registered in the name of Cede &
Co. (DTC's partnership nominee). DTC is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934. DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-
entry changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. "Direct Participants" include
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations. DTC is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc.
Access to the DTC system is also available to others such as securities
brokers and dealers, banks, and trust companies that clear through or maintain
a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Commission.
Purchases of the Senior Notes under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Senior Notes
on DTC's records. The ownership interest of each actual purchaser of each
Security ("Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmation providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Senior Notes are to be accomplished by entries made
on the books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in
the Senior Notes, except in the event that use of the book-entry system for
the Senior Notes is discontinued.
To facilitate subsequent transfers, all securities deposited by Participants
with DTC are registered in the name of DTC's partnership nominee, Cede & Co.
The deposit of the Senior Notes with DTC and their registration in the name of
Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Senior Notes; DTC's records reflect only
the identity of the Direct Participants to whose accounts such Senior Notes
are credited, which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of the holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
If the Global Notes are redeemable, redemption notices shall be sent to Cede
& Co. If less than all of the Global Notes are being redeemed, DTC's practice
is to determine by lot the amount of the interest of each Direct Participant
in such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the Senior
Notes. Under its usual procedures, DTC mails an Omnibus Proxy to the Company
as soon as possible after the record date. The
19
<PAGE>
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Senior Notes are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Principal, interest and any premium payments on the Senior Notes will be
made to DTC. DTC's practice is to credit Direct Participant's accounts on
payable date in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive payment on
payable date. Payments by Participants to Beneficial Owners will be governed
by standing instructions and customary practices, as in the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such Participant and not of
DTC, the applicable Trustee or the Company, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal, interest and any premium to DTC is the responsibility of the
Company or the applicable Trustee, disbursement of such payments to Direct
Participants shall be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to a series of Senior Notes at any time by giving reasonable notice to
the Company or the applicable Trustee. Under such circumstances, if a
successor securities depository is not obtained, certificates for such series
of Senior Notes are required to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository) for any series of
Senior Notes. In that event, certificates for such series of Senior Notes will
be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository) for any series of
Senior Notes. In that event, certificates for such series of Senior Notes will
be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from DTC, and the Company and any underwriters, dealers or
agents take no responsibility for the accuracy thereof.
The underwriters, dealers or agents of any Senior Notes may be Direct
Participants of DTC.
NONE OF THE COMPANY, THE SENIOR NOTE TRUSTEE, THE ELECTRIC UTILITY MORTGAGE
TRUSTEE, THE GAS UTILITY MORTGAGE TRUSTEE OR ANY AGENT FOR PAYMENT ON OR
REGISTRATION OF TRANSFER OR EXCHANGE OF THE GLOBAL NOTE WILL HAVE ANY
RESPONSIBILITY OR LIABILITY FOR ANY ASPECT OF THE RECORDS RELATING TO OR
PAYMENTS MADE ON ACCOUNT OF BENEFICIAL INTERESTS IN SUCH GLOBAL NOTE OR FOR
MAINTAINING, SUPERVISING OR REVIEWING ANY RECORDS RELATING TO SUCH BENEFICIAL
INTERESTS.
20
<PAGE>
PLAN OF DISTRIBUTION
The Company may offer the Senior Notes (i) through underwriters or dealers,
(ii) directly to a limited number of purchasers or to a single purchaser or
(iii) through agents. A Prospectus Supplement with respect to each series of
Senior Notes will set forth the terms of the offering and sale of such Senior
Notes, including the proceeds to the Company from such sale, the name or names
of any underwriters, the purchase price of such Senior Notes, any underwriting
discounts and other items constituting underwriter compensation, any initial
public offering price, any discounts or concessions allowed or reallowed or
paid to dealers and any securities exchanges on which such Senior Notes may be
listed. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
If underwriters are utilized, the Senior Notes being sold to them will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of
sale. The Senior Notes may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more underwriters. The underwriter or underwriters with
respect to the Senior Notes being offered will be named in a Prospectus
Supplement relating to such offering and, if an underwriting syndicate is
used, the managing underwriter or underwriters will be set forth on the cover
page of such Prospectus Supplement. Unless otherwise provided in the
Prospectus Supplement, the obligations of the underwriters will be subject to
certain conditions precedent, and the underwriters will be obligated to
purchase all of such Senior Notes if any are purchased.
The Senior Notes may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer
or sale of any Senior Notes in respect of which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent will
be set forth, in a Prospectus Supplement. Unless otherwise provided in the
Prospectus Supplement, any such agent will be acting on a best efforts basis
for the period of its appointment.
If so indicated in a Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain institutions to
purchase the Senior Notes from the Company at the public offering price set
forth in such Prospectus Supplement pursuant to Delayed Delivery Contracts
("Contracts") providing for payment and delivery on the date or dates stated
in such Prospectus Supplement. Each Contract will be for an amount not less
than, and the aggregate principal amount of the Senior Notes sold pursuant to
the Contracts shall be not less nor more than, the respective amounts stated
in such Prospectus Supplement. Institutions with whom the Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions, and other institutions, but will in all cases be subject to the
approval of the Company. The Contracts will not be subject to any conditions
except (i) the purchase by an institution of the Senior Notes covered by its
Contract shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject, and
(ii) if the Senior Notes are being sold to underwriters, the Company shall
have sold to such underwriters the total principal amount of the Senior Notes
less the principal amount thereof covered by the Contracts. The underwriters
will not have any responsibility in respect of the validity or performance of
the Contracts.
Any underwriters, dealers or agents participating in the distribution of the
Senior Notes may be deemed to be underwriters, and any discounts or
commissions received by them on the sale or resale of the Senior Notes may be
deemed to be underwriting discounts and commissions under the Securities Act.
Agents and underwriters may be entitled, under agreements entered into with
the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, and to
contribution with respect to payments which the agents or underwriters may be
required to make in respect thereof. Agents and underwriters may engage in
transactions with or perform services for the Company in the ordinary course
of business.
21
<PAGE>
LEGAL MATTERS
The validity of the Senior Notes to be offered will be passed upon for the
Company by Perkins Coie, Seattle, Washington and for any underwriters, dealers
or agents by Skadden, Arps, Slate, Meagher & Flom, LLP, New York, New York,
which shall rely upon the opinion of Perkins Coie with respect to matters
pertaining to the laws of the State of Washington. All matters pertaining to
the laws of the State of Washington will be passed upon by Perkins Coie.
EXPERTS
The consolidated financial statements and financial statement schedule of
the Company at December 31, 1996 and 1995, and for each of the three years in
the period ended December 31, 1996, incorporated by reference in this
Prospectus and the Registration Statement, have been incorporated herein in
reliance on the reports of Coopers & Lybrand L.L.P., given on the authority of
that firm as experts in accounting and auditing. In its report included in the
Company's Current Report on Form 8-K filed on October 24, 1997, Coopers &
Lybrand, L.L.P. states that, with respect to Washington Energy Company and
Washington Natural Gas Company as of September 30, 1996 and 1995, and for each
of the fiscal years ended September 30, 1996, 1995 and 1994, its opinion is
based on the report of other independent accountants, namely Arthur Anderson
LLP.
22
<PAGE>
PUGET SOUND ENERGY, INC.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
<TABLE>
<S> <C>
Securities and Exchange Commission fees.......................... $151,516
Printing fees.................................................... 25,000
Trustee fees (including counsel fees)............................ 10,000
Legal fees and expenses.......................................... 250,000
Blue Sky fees and expenses....................................... 15,000
Rating agency fees............................................... 75,000
Independent accountant fees...................................... 70,000
Miscellaneous.................................................... 3,484
--------
Total........................................................ $600,000
========
</TABLE>
- --------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act (the "WBCA") authorize a court to award, or a corporation's
board of directors to grant, indemnification to directors and officers on
terms sufficiently broad to permit indemnification under certain circumstances
for liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act"). Section 6 of the Company's Bylaws (the "Bylaws"), provides
for indemnification of the Company's directors and officers to the maximum
extent permitted by Washington law.
Section 23B.08.320 of the WBCA authorizes a corporation to eliminate or
limit a director's personal liability to the corporation or its shareholders
for monetary damages for conduct as a director, except in certain
circumstances involving acts or omissions, intentional misconduct by a
director or knowing violations of law by a director or distributions illegal
under Washington law, or any transaction from which the director will
personally receive a benefit in money, property or services to which the
director is not legally entitled. Article X of the Company's Restated Articles
of Incorporation, as amended (the "Articles of Incorporation") contains
provisions implementing, to the fullest extent permitted by Washington law,
such limitations on a director's liability to the Company and its
shareholders.
Officers and directors of the Company are covered by insurance (with certain
exceptions and certain limitations) that indemnifies them against losses and
liabilities arising from certain alleged "wrongful acts," including alleged
errors or misstatements, or certain other alleged wrongful acts or omissions
constituting neglect or breach of duty.
The above discussion of the WBCA and the Bylaws and Articles of
Incorporation is not intended to be exhaustive and is qualified in its
entirety by reference to such statute, the Bylaws and the Articles of
Incorporation.
II-1
<PAGE>
ITEM 16. LIST OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 Form of Distribution Agreement.
4.1 Form of Indenture related to Senior Notes.
4.2 Fortieth through Seventy-fifth Supplemental Indentures defining the
rights of the holders of the Company's First Mortgage Bonds. (Exhibit
2-d to Registration No. 2-60200; Exhibit 4-c to Registration No. 2-
13347; Exhibits 2-e through and including 2-k to Registration No. 2-
60200; Exhibit 4-h to Registration No. 2-17465; Exhibits 2-1, 2-m and
2-n to Registration No. 2-60200; Exhibits 2-m to Registration No. 2-
37645; Exhibit 2-o through and including 2-s to Registration No. 2-
60200; Exhibit 5-b to Registration No. 2-62883; Exhibit 2-h to
Registration No. 2-65831; Exhibit (4)-j-1 to Registration No. 2-72061;
Exhibit (4)-a to Registration No. 2-91516; Exhibit (4)-b to Annual
Report on Form 10-K for the fiscal year ended December 31, 1985,
Commission File No. 1-4393; Exhibits (4)(a) and (4)(b) to Company's
Current Report on Form 8-K, dated April 22, 1986; Exhibit (4)a to
Company's Current Report on Form 8-K, dated September 5, 1986; Exhibit
(4)-b to Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1986, Commission File No. 1-4393; Exhibit (4)-c to
Registration No. 33-18506; Exhibit (4)-b to Annual Report on Form 10-K
for the fiscal year ended December 31, 1989, Commission
File No. 1-4393; Exhibit (4)-b to Annual Report on Form 10-K for the
fiscal year ended December 31, 1990, Commission File No. 1-4393;
Exhibits (4)-b and (4)-c to Registration No. 33-45916; Exhibit (4)-c
to Registration No. 33-50788; Exhibit (4)-a to Registration No. 33-
53056; and Exhibit 4.3 to Registration No. 33-63278.
4.3 Rights Agreement, dated as of January 15, 1991, between the Company
and The Chase Manhattan Bank, N.A., as Rights Agent. (Exhibit 2.1 to
Registration Statement on Form 8-A filed on January 17, 1991,
Commission File No. 1-4393)
4.4 Amendment No. 1 dated as of August 30, 1991, to the Rights Agreement
dated as of January 15, 1991, between the Registrant and the Bank of
New York (as successor to The Chase Manhattan Bank, N.A.), as Rights
Agent. (Exhibit 2.1 to Registration Statement on Form 8 filed on
August 30, 1991)
4.5 Amendment No. 2 dated as of October 18, 1995, to the Rights Agreement
dated as of January 15, 1991, between the Registrant and The Bank of
New York (as successor to The Chase Manhattan Bank, N.A.), as Rights
Agent. (Exhibit 1 to Registration Statement on Form 8-A/A filed on
October 27, 1995)
4.6 Pledge Agreement dated August 1, 1991, between the Company and The
First National Bank of Chicago, as Trustee. (Exhibit (4)-j to
Registration No. 33-45916)
4.7 Loan Agreement dated August 1, 1991, between the City of Forsyth,
Rosebud County, Montana and the Company. (Exhibit (4)-k to
Registration No. 33-45916)
4.8 Statement of Relative Rights and Preferences for the Adjustable Rate
Cumulative Preferred Stock, Series B ($25 Par Value). (Exhibit 1.1 to
Registration Statement on Form 8-A filed February 14, 1994, Commission
File No. 1-4393)
4.9 Statement of Relative Rights and Preferences for the Preference Stock,
Series R, $50 Par Value. (Exhibit 1.5 to Registration Statement on
Form 8-A filed February 14, 1994, Commission File No. 1-4393)
4.10 Statement of Relative Rights and Preferences for the 7 3/4% Series
Preferred Stock Cumulative, $100 Par Value. (Exhibit 1.6 to
Registration Statement on Form 8-A filed February 14, 1994, Commission
File No. 1-4393)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.11 Pledge Agreement, dated as of March 1, 1992, by and between the
Company and Chemical Bank relating to a series of first mortgage
bonds. (Exhibit 4.15 to Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, Commission File No. 1-4393)
4.12 Pledge Agreement, dated as of April 1, 1993, by and between the
Company and The First National Bank of Chicago, relating to a series
of first mortgage bonds. (Exhibit 4.16 to Annual Report on Form 10-K
for the fiscal year ended December 31, 1993, Commission File No. 1-
4393)
4.13 Form of Statement of Relative Rights and Preferences for the Series II
Cumulative Preferred Stock, $25 Par Value (included as Annex F to the
Joint Proxy Statement/Prospectus filed February 1, 1996).
4.14 Form of Statement of Relative Rights and Preferences for the Series
III Cumulative Preferred Stock, $25 Par Value (included as Annex F to
the Joint Proxy Statement/Prospectus filed February 1, 1996).
4.15 Indenture of First Mortgage dated as of April 1, 1957 (incorporated
herein by reference to Washington Natural Gas Company Exhibit 4-B,
Registration No. 2-14307).
4.16 Sixth Supplemental Indenture dated as of August 1, 1966 (incorporated
herein by reference to Washington Natural Gas Company Exhibit to Form
8-K for month of August 1966, File No. 0-951).
4.17 Twelfth Supplemental Indenture dated as of November 1, 1972
(incorporated herein by reference to Washington Natural Gas Company
Exhibit to Form 8-K for November 1972, File No. 0-951).
4.18 Seventeenth Supplemental Indenture dated as of August 9, 1978
(incorporated herein by reference to Washington Energy Company Exhibit
5-K.18, Registration No. 2-64428).
4.19 Twenty-sixth Supplemental Indenture dated as of September 1, 1990
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-B.19, Form 10-K for the year ended September 30, 1990, File
No. 0-951).
4.20 Twenty-seventh Supplemental Indenture dated as of September 1, 1990
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-B.20, Form 10-K for the year ended September 30, 1988, File
No. 0-951).
4.21 Twenty-eighth Supplemental Indenture dated as of July 31, 1991
(incorporated herein by reference to Washington Natural Gas Company
exhibit 4-A, Form 10-Q for the quarter ended March 31, 1993, File No.
0-951).
4.22 Twenty-ninth Supplemental Indenture dated as of June 1, 1993
(incorporated herein by reference to Exhibit 4-A of Washington Natural
Gas Company's S-3 Registration Statement, Registration No. 33-49599).
4.23 Thirtieth Supplemental Indenture dated as of August 15, 1995
(incorporated herein by reference to Exhibit 4-A of Washington Natural
Gas Company's S-3 Registration Statement, Registration No. 33-61859).
4.24 Form of Supplemental Indenture related to Senior Notes.(1)
4.25 Form of Supplemental Indenture related to Pledged Bonds.(1)
5.1 Opinion of Perkins Coie.
12.1 Statement setting forth computations of ratios of earnings to fixed
charges (incorporated herein by reference to Exhibit 12-a to Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997).
23.1 Consent of Perkins Coie (contained in opinion referenced as Exhibit
5.1).
23.2 Consent of Coopers & Lybrand L.L.P. (included on page II-7).
23.3 Consent of Arthur Andersen LLP (included on page II-8)
24.1 Power of attorney (contained on signature page of Registration
Statement on page II-5).
25.1 Statement of Eligibility of Senior Note Trustee on Form T-1.
</TABLE>
- --------
(1) To be filed by amendment or incorporated by reference in connection with
the offering of securities.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, unless the information required to be included in
such post-effective amendment is contained in a periodic report filed by
the registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 and incorporated by reference in this registration
statement.
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement, unless such information required to be included in
such post-effective amendment is contained in a periodic report filed by
the registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 and incorporated herein by reference. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of a prospectus filed
with the Commissions pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration, by means of a post-effective amendment, any
of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for the purpose of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions described under Item 15 above,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunder duly
authorized, in the City of Bellevue, State of Washington, on November 26,
1997.
PUGET SOUND ENERGY, INC.
By /s/ Richard R. Sonstelie
___________________________________
Richard R. Sonstelie
Chairman and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes and
appoints James P. Torgerson, Donald E. Gaines and Tommy G. Leong, and each of
them, with full power of substitution and resubstitution and full power to act
without the other, as his or her true and lawful attorney-in-fact and agent to
act in his or her name, place and stead and to execute in the name and on
behalf of each person, individually and in each capacity stated below, and to
file, any and all amendments to this Registration Statement, including any and
all post-effective amendments, or any Registration Statements to be filed in
connection with this Registration Statement pursuant to Rule 462 under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing, ratifying and confirming all that said attorneys-in-fact and agents or
any of them or their or his substitute or substitutes, may lawfully do or
cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated below on the 26th day of November, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ Richard R. Sonstelie Chairman, Chief Executive Officer and Director
___________________________________________ (Principal Executive Officer)
Richard R. Sonstelie
/s/ William S. Weaver President and Director
___________________________________________
William S. Weaver
/s/ James P. Torgerson Vice President and Chief Financial Officer
___________________________________________ (Principal Financial Officer)
James P. Torgerson
/s/ James W. Eldredge Corporate Secretary and Controller
___________________________________________ (Principal Accounting Officer)
James W. Eldredge
/s/ Douglas P. Beighle Director
___________________________________________
Douglas P. Beighle
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ Charles W. Bingham Director
___________________________________________
Charles W. Bingham
/s/ Phyllis J. Campbell Director
___________________________________________
Phyllis J. Campbell
/s/ Donald J. Covey Director
___________________________________________
Donald J. Covey
/s/ Robert L. Dryden Director
___________________________________________
Robert L. Dryden
/s/ John D. Durbin Director
___________________________________________
John D. Durbin
/s/ John W. Ellis Director
___________________________________________
John W. Ellis
/s/ Daniel J. Evans Director
___________________________________________
Daniel J. Evans
/s/ Tomio Moriguchi Director
___________________________________________
Tomio Moriguchi
/s/ Sally G. Narodick Director
___________________________________________
Sally G. Narodick
/s/ R. Kirk Wilson Director
___________________________________________
R. Kirk Wilson
</TABLE>
II-6
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Puget Sound Energy, Inc. (formerly Puget Sound Power & Light Company) on
Form S-3 (File No. 333- ) of our reports dated February 12, 1997, on our
audits of the consolidated financial statements and financial statement
schedule of Puget Sound Energy, Inc. as of December 31, 1996 and 1995, and for
the years ended December 31, 1996, 1995 and 1994, which reports are included
in the Company's Current Report on Form 8-K, dated October 23, 1997 and in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996. We
also consent to the reference to our Firm under the caption "Experts."
COOPERS & LYBRAND, L.L.P.
Seattle, Washington
November 24, 1997
II-7
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement, as it relates to Washington Energy
Company and Washington Natural Gas Company (the Companies), of our reports
dated October 31, 1996 included in Puget Sound Energy, Inc.'s Form 8-K dated
October 24, 1997 and to all references to our Firm included in this
registration statement. It should be noted that we have not audited any
financial statements of the Companies subsequent to September 30, 1996 or
performed any audit procedures subsequent to the date of our report.
ARTHUR ANDERSEN LLP
Seattle, Washington
November 24, 1997
II-8
<PAGE>
EXHIBIT INDEX
Certain of the following exhibits are filed herewith. Certain other of the
following exhibits have been filed heretofore with the Commission and are
incorporated herein by reference.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 Form of Distribution Agreement.
4.1 Form of Indenture related to Senior Notes.
4.2 Fortieth through Seventy-fifth Supplemental Indentures defining the
rights of the holders of the Company's First Mortgage Bonds. (Exhibit
2-d to Registration No. 2-60200; Exhibit 4-c to Registration No. 2-
13347; Exhibits 2-e through and including 2-k to Registration No. 2-
60200; Exhibit 4-h to Registration No. 2-17465; Exhibits 2-1, 2-m and
2-n to Registration No. 2-60200; Exhibits 2-m to Registration No. 2-
37645; Exhibit 2-o through and including 2-s to Registration No. 2-
60200; Exhibit 5-b to Registration No. 2-62883; Exhibit 2-h to
Registration No. 2-65831; Exhibit (4)-j-1 to Registration No. 2-72061;
Exhibit (4)-a to Registration No. 2-91516; Exhibit (4)-b to Annual
Report on Form 10-K for the fiscal year ended December 31, 1985,
Commission File No. 1-4393; Exhibits (4)(a) and (4)(b) to Company's
Current Report on Form 8-K, dated April 22, 1986; Exhibit (4)a to
Company's Current Report on Form 8-K, dated September 5, 1986; Exhibit
(4)-b to Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1986, Commission File No. 1-4393; Exhibit (4)-c to
Registration No. 33-18506; Exhibit (4)-b to Annual Report on Form 10-K
for the fiscal year ended December 31, 1989, Commission
File No. 1-4393; Exhibit (4)-b to Annual Report on Form 10-K for the
fiscal year ended December 31, 1990, Commission File No. 1-4393;
Exhibits (4)-b and (4)-c to Registration No. 33-45916; Exhibit (4)-c
to Registration No. 33-50788; Exhibit (4)-a to Registration No. 33-
53056; and Exhibit 4.3 to Registration No. 33-63278.
4.3 Rights Agreement, dated as of January 15, 1991, between the Company
and The Chase Manhattan Bank, N.A., as Rights Agent. (Exhibit 2.1 to
Registration Statement on Form 8-A filed on January 17, 1991,
Commission File No. 1-4393)
4.4 Amendment No. 1 dated as of August 30, 1991, to the Rights Agreement
dated as of January 15, 1991, between the Registrant and the Bank of
New York (as successor to The Chase Manhattan Bank, N.A.), as Rights
Agent. (Exhibit 2.1 to Registration Statement on Form 8 filed on
August 30, 1991)
4.5 Amendment No. 2 dated as of October 18, 1995, to the Rights Agreement
dated as of January 15, 1991, between the Registrant and The Bank of
New York (as successor to The Chase Manhattan Bank, N.A.), as Rights
Agent. (Exhibit 1 to Registration Statement on Form 8-A/A filed on
October 27, 1995)
4.6 Pledge Agreement dated August 1, 1991, between the Company and The
First National Bank of Chicago, as Trustee. (Exhibit (4)-j to
Registration No. 33-45916)
4.7 Loan Agreement dated August 1, 1991, between the City of Forsyth,
Rosebud County, Montana and the Company. (Exhibit (4)-k to
Registration No. 33-45916)
4.8 Statement of Relative Rights and Preferences for the Adjustable Rate
Cumulative Preferred Stock, Series B ($25 Par Value). (Exhibit 1.1 to
Registration Statement on Form 8-A filed February 14, 1994, Commission
File No. 1-4393)
4.9 Statement of Relative Rights and Preferences for the Preference Stock,
Series R, $50 Par Value. (Exhibit 1.5 to Registration Statement on
Form 8-A filed February 14, 1994, Commission File No. 1-4393)
4.10 Statement of Relative Rights and Preferences for the 7 3/4% Series
Preferred Stock Cumulative, $100 Par Value. (Exhibit 1.6 to
Registration Statement on Form 8-A filed February 14, 1994, Commission
File No. 1-4393)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.11 Pledge Agreement, dated as of March 1, 1992, by and between the
Company and Chemical Bank relating to a series of first mortgage
bonds. (Exhibit 4.15 to Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, Commission File No. 1-4393)
4.12 Pledge Agreement, dated as of April 1, 1993, by and between the
Company and The First National Bank of Chicago, relating to a series
of first mortgage bonds. (Exhibit 4.16 to Annual Report on Form 10-K
for the fiscal year ended December 31, 1993, Commission File No. 1-
4393)
4.13 Form of Statement of Relative Rights and Preferences for the Series II
Cumulative Preferred Stock, $25 Par Value (included as Annex F to the
Joint Proxy Statement/Prospectus filed February 1, 1996).
4.14 Form of Statement of Relative Rights and Preferences for the Series
III Cumulative Preferred Stock, $25 Par Value (included as Annex F to
the Joint Proxy Statement/Prospectus filed February 1, 1996).
4.15 Indenture of First Mortgage dated as of April 1, 1957 (incorporated
herein by reference to Washington Natural Gas Company Exhibit 4-B,
Registration No. 2-14307).
4.16 Sixth Supplemental Indenture dated as of August 1, 1966 (incorporated
herein by reference to Washington Natural Gas Company Exhibit to Form
8-K for month of August 1966, File No. 0-951).
4.17 Twelfth Supplemental Indenture dated as of November 1, 1972
(incorporated herein by reference to Washington Natural Gas Company
Exhibit to Form 8-K for November 1972, File No. 0-951).
4.18 Seventeenth Supplemental Indenture dated as of August 9, 1978
(incorporated herein by reference to Washington Energy Company Exhibit
5-K.18, Registration No. 2-64428).
4.19 Twenty-sixth Supplemental Indenture dated as of September 1, 1990
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-B.19, Form 10-K for the year ended September 30, 1990, File
No. 0-951).
4.20 Twenty-seventh Supplemental Indenture dated as of September 1, 1990
(incorporated herein by reference to Washington Natural Gas Company
Exhibit 4-B.20, Form 10-K for the year ended September 30, 1988, File
No. 0-951).
4.21 Twenty-eighth Supplemental Indenture dated as of July 31, 1991
(incorporated herein by reference to Washington Natural Gas Company
exhibit 4-A, Form 10-Q for the quarter ended March 31, 1993, File No.
0-951).
4.22 Twenty-ninth Supplemental Indenture dated as of June 1, 1993
(incorporated herein by reference to Exhibit 4-A of Washington Natural
Gas Company's S-3 Registration Statement, Registration No. 33-49599).
4.23 Thirtieth Supplemental Indenture dated as of August 15, 1995
(incorporated herein by reference to Exhibit 4-A of Washington Natural
Gas Company's S-3 Registration Statement, Registration No. 33-61859).
4.24 Form of Supplemental Indenture related to Senior Notes.(1)
4.25 Form of Supplemental Indenture related to Pledged Bonds.(1)
5.1 Opinion of Perkins Coie.
12.1 Statement setting forth computations of ratios of earnings to fixed
charges (incorporated herein by reference to Exhibit 12-a to Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997).
23.1 Consent of Perkins Coie (contained in opinion referenced as Exhibit
5.1).
23.2 Consent of Coopers & Lybrand L.L.P. (included on page II-7).
23.3 Consent of Arthur Andersen LLP (included on page II-8)
24.1 Power of attorney (contained on signature page of Registration
Statement on page II-5).
25.1 Statement of Eligibility of Senior Note Trustee on Form T-1.
</TABLE>
- --------
(1) To be filed by amendment or incorporated by reference in connection with
the offering of securities.
<PAGE>
EXHIBIT 1.1
PUGET SOUND ENERGY, INC.
SENIOR MEDIUM TERM NOTES
DISTRIBUTION AGREEMENT
November __, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 10th Floor
New York, New York 10281-1310
[OTHER AGENTS]
[ADDRESS]
Ladies and Gentlemen:
Puget Sound Energy, Inc. a Washington corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and [OTHER AGENTS] (each, an "Agent", and collectively, the
"Agents") with respect to the issue and sale by the Company of its Senior Medium
Term Notes, Series A, Due Nine Months or More From Date of Issue (the "Notes").
The Notes are to be issued pursuant to an Indenture, dated as of November __,
1997, as amended or modified from time to time (the "Indenture"), between the
Company and [TRUSTEE], as trustee (the "Trustee"). Prior to the Substitution
Date (as defined in the Indenture), the Notes will be secured by the delivery to
the Trustee of (i) first mortgage bonds issued under the Company's electric
mortgage indenture or (ii) first mortgage bonds issued under the Company's gas
mortgage indenture, as specified in the Prospectus referred to below
(collectively, the "Pledged Bonds"). As of the date hereof, the Company has
authorized the issuance and sale of up to U.S. $500,000,000 aggregate initial
offering price of Notes to or through the Agents pursuant to the terms of this
Agreement. It is understood, however, that
<PAGE>
the Company may from time to time authorize the issuance of additional Notes and
that such additional Notes may be sold to or through the Agents pursuant to the
terms of this Agreement, all as though the issuance of such Notes were
authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company to
one or more Agents as principal for resale to investors and other purchasers and
for the sale of Notes by the Company directly to investors (as may from time to
time be agreed to by the Company and the applicable Agent), in which case the
applicable Agent will act as an agent of the Company in soliciting offers for
the purchase of Notes.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-________) for the
registration of the Notes, under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"), and the Company has filed such post-effective amendments
thereto as may be required prior to any acceptance by the Company of an offer
for the purchase of Notes. Such registration statement (as so amended, if
applicable) has been declared effective by the Commission and the Indenture has
been duly qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"). Such registration statement (as so amended, if applicable) is referred
to herein as the "Registration Statement"; and the final prospectus and all
applicable amendments or supplements thereto (including the final prospectus
supplement and pricing supplement relating to the offering of Notes), in the
form first furnished to the applicable Agent(s), are collectively referred to
herein as the "Prospectus"; provided, however, that all references to the
"Registration Statement" and the "Prospectus" shall also be deemed to include
all documents incorporated therein by reference pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), prior to any acceptance by
the Company of an offer for the purchase of Notes; provided, further, that if
the Company files a registration statement with the Commission pursuant to Rule
462(b) of the 1933 Act Regulations (the "Rule 462(b)
2
<PAGE>
Registration Statement"), then, after such filing, all references to the
"Registration Statement" shall also be deemed to include the Rule 462(b)
Registration Statement. A "preliminary prospectus" shall be deemed to refer to
any prospectus used before the registration statement became effective and any
prospectus furnished by the Company after the registration statement became
effective and before any acceptance by the Company of an offer for the purchase
of Notes which omitted information to be included upon pricing in a form of
prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations. For purposes of this Agreement, all references to the Registration
Statement, Prospectus or preliminary prospectus or to any amendment or
supplement thereto shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "disclosed", "contained," "included" or "stated"
(or other references of like import) in the Registration Statement, Prospectus
or preliminary prospectus shall be deemed to include all such financial
statements and schedules and other information which is incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, Prospectus or preliminary prospectus
shall be deemed to include the filing of any document under the 1934 Act which
is incorporated by reference in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be.
1. Appointment as Agent.
--------------------
(a) Appointment. Subject to the terms and conditions stated herein
-----------
and subject to the reservation by the Company of the right to sell Notes
directly on its own behalf, the Company hereby agrees that Notes will be sold
exclusively to or through the Agents. The Company agrees that it will not
appoint any other agents to act on its behalf, or to assist it, in the placement
of the Notes.
3
<PAGE>
(b) Sale of Notes. The Company shall not sell or approve the
-------------
solicitation of offers for the purchase of Notes in excess of the amount which
shall be authorized by the Company from time to time or in excess of the
aggregate initial offering price of Notes registered pursuant to the
Registration Statement. The Agents shall have no responsibility for maintaining
records with respect to the aggregate initial offering price of Notes sold, or
of otherwise monitoring the availability of Notes for sale, under the
Registration Statement.
(c) Purchases as Principal. The Agents shall not have any obligation
----------------------
to purchase Notes from the Company as principal. However, absent an agreement
between an Agent and the Company that such Agent shall be acting solely as an
agent for the Company, such Agent shall be deemed to be acting as principal in
connection with any offering of Notes by the Company through such Agent.
Accordingly, the Agents, individually or in a syndicate, may agree from time to
time to purchase Notes from the Company as principal for resale to investors and
other purchasers determined by such Agents. Any purchase of Notes from the
Company by an Agent as principal shall be made in accordance with Section 3(a)
hereof.
(d) Solicitations as Agent. If agreed upon between an Agent and the
----------------------
Company, such Agent, acting solely as an agent for the Company and not as
principal, will solicit offers for the purchase of Notes. Such Agent will
communicate to the Company, orally, each offer for the purchase of Notes
solicited by it on an agency basis other than those offers rejected by such
Agent. Such Agent shall have the right, in its discretion reasonably exercised,
to reject any offer for the purchase of Notes, in whole or in part, and any such
rejection shall not be deemed a breach of its agreement contained herein. The
Company may accept or reject any offer for the purchase of Notes, in whole or in
part. Such Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer for the purchase of Notes
has been solicited by it on an agency basis and accepted by the Company. Such
Agent shall not have any liability to the Company in the event that any such
purchase is not consummated for any reason. If the Company shall default on its
obligation
4
<PAGE>
to deliver Notes to a purchaser whose offer has been solicited by such Agent on
an agency basis and accepted by the Company, the Company shall (i) hold such
Agent harmless against any loss, claim or damage arising from or as a result of
such default by the Company and (ii) pay to such Agent any commission to which
it would otherwise be entitled absent such default.
(e) Reliance. The Company and the Agents agree that any Notes
--------
purchased from the Company by one or more Agents as principal shall be
purchased, and any Notes the placement of which an Agent arranges as an agent of
the Company shall be placed by such Agent, in reliance on the representations,
warranties, covenants and agreements of the Company contained herein and on the
terms and conditions and in the manner provided herein.
2. Representations and Warranties.
------------------------------
(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether to such Agent as principal or through such Agent as
agent), as of the date of each delivery of Notes (whether to such Agent as
principal or through such Agent as agent) (the date of each such delivery to
such Agent as principal is referred to herein as a "Settlement Date"), and as of
any time that the Registration Statement or the Prospectus shall be amended or
supplemented (each of the times referenced above is referred to herein as a
"Representation Date"), as follows:
(i) Due Incorporation, Good Standing and Due Qualification of the
-------------------------------------------------------------
Company. The Company has been duly organized and is validly existing as a
-------
corporation in good standing under the laws of the State of Washington with
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and to enter into
this Agreement and consummate the transactions contemplated in the
Prospectus; the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the
5
<PAGE>
ownership or leasing of property or the conduct of business, except where
the failure to so qualify or be in good standing would not result in a
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise (a "Material Adverse Effect").
(ii) Significant Subsidiaries. The Company has no significant
------------------------
subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X
promulgated under the 1933 Act).
(iii) Registration Statement and Prospectus. The Company meets the
-------------------------------------
requirements for use of Form S-3 under the 1933 Act; the Registration
Statement (including any Rule 462(b) Registration Statement) has become
effective under the 1933 Act and no stop order suspending the effectiveness
of the Registration Statement (including any Rule 462(b) Registration
Statement) has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with; the
Indenture has been duly qualified under the 1939 Act; at the respective
times that the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendment thereto (including the filing of
the Company's most recent Annual Report on Form 10-K with the Commission
(the "Annual Report on Form 10-K")) became effective and at each
Representation Date, the Registration Statement (including any Rule 462(b)
Registration Statement) and any amendments thereto complied and will comply
in all material respects with the requirements of the 1933 Act and the 1933
Act Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the "1939 Act Regulations") and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; each preliminary prospectus and
6
<PAGE>
prospectus filed as part of the Registration Statement as originally filed
or as part of any amendment thereto, or filed pursuant to Rule 424 under
the 1933 Act, complied when so filed in all material respects with the 1933
Act Regulations; each preliminary prospectus and the Prospectus delivered
to the applicable Agent(s) for use in connection with the offering of Notes
are identical to any electronically transmitted copies thereof filed with
the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T; and at the date hereof, at the date of the Prospectus and
at each Representation Date, neither the Prospectus nor any amendment or
supplement thereto included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by the Agents expressly for use in the
Registration Statement or the Prospectus.
(iv) Incorporated Documents. The documents incorporated or deemed to
----------------------
be incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations") and, when read together with the other information in the
Prospectus, at the date hereof, at the date of the Prospectus and at each
Representation Date, did not and will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(v) Independent Accountants. The accountants who certified the
-----------------------
financial statements and any
7
<PAGE>
supporting schedules thereto included in the Registration Statement and the
Prospectus are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(vi) Financial Statements. The consolidated financial statements of
--------------------
the Company included in the Registration Statement and the Prospectus,
together with the related schedules and notes, as well as those financial
statements, schedules and notes of any other entity included in the
Registration Statement and the Prospectus, present fairly the consolidated
financial position of the Company and its subsidiaries, or such other
entity, as the case may be, at the dates indicated and the consolidated
statement of operations, stockholders' equity and cash flows of the Company
and its subsidiaries, or such other entity, as the case may be, for the
periods specified; such financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved; the supporting
schedules, if any, included in the Registration Statement and the
Prospectus present fairly in accordance with GAAP the information required
to be stated therein; the selected financial data and the summary financial
information included in the Registration Statement and the Prospectus
present fairly the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements included in
the Registration Statement and the Prospectus; and any pro forma
consolidated financial statements of the Company and its subsidiaries and
the related notes thereto included in the Registration Statement and the
Prospectus present fairly the information shown therein, have been prepared
in accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein.
8
<PAGE>
(vii) No Material Changes. Since the respective dates as of which
-------------------
information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, (1) there has been no event or
occurrence that would result in a Material Adverse Effect and (2) there
have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as
one enterprise.
(viii) Authorization, etc. of this Agreement, the Indenture, the
---------------------------------------------------------
Notes and the Pledged Bonds. This Agreement has been duly authorized,
---------------------------
executed and delivered by the Company; the Indenture has been duly
authorized, executed and delivered by the Company and will be a valid and
legally binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as enforcement thereof may be limited
by (1) bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally or (2)
general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law); the Notes and the Pledged
Bonds have been duly authorized by the Company for offer, sale, issuance
and delivery pursuant to this Agreement and, when issued, authenticated and
delivered in the manner provided for in the Indenture and delivered against
payment of the consideration therefor, will constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforcement thereof may be limited
by (1) bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally or (2)
general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law); the Notes will be
substantially in a form previously certified to the Agents and contemplated
by the Indenture; and each holder of Notes will be entitled to the benefits
of the Indenture.
9
<PAGE>
(ix) Descriptions of the Indenture, the Notes and the Pledged Bonds.
--------------------------------------------------------------
The Indenture, the Notes and the Pledged Bonds conform and will conform in
all material respects to the statements relating thereto contained in the
Prospectus and are substantially in the form filed or incorporated by
reference, as the case may be, as an exhibit to the Registration Statement.
(x) Accuracy of Exhibits. There are no contracts or documents which
--------------------
are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as
exhibits thereto which have not been so described and filed as required.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any
---------------------------------
of its subsidiaries is in violation of the provisions of its charter or by-
laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of them may be bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject
(collectively, "Agreements and Instruments"), except for such defaults that
would not result in a Material Adverse Effect; and the execution, delivery
and performance of this Agreement, the Indenture, the Notes and the Pledged
Bonds and any other agreement or instrument entered into or issued or to be
entered into or issued by the Company in connection with the transactions
contemplated by the Prospectus, the consummation of the transactions
contemplated in the Prospectus (including the issuance and sale of the
Notes and the use of proceeds therefrom as described in the Prospectus) and
the compliance by the Company with its obligations hereunder and under the
Indenture, the Notes and the Pledged Bonds and such other agreements or
instruments have been duly authorized by all necessary corporate action and
do not and will not, whether with or without the giving of
10
<PAGE>
notice or the passage of time or both, conflict with or constitute a breach
of, or default or event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any of
its subsidiaries (a "Repayment Event") under, or result in the creation or
imposition of any lien, charge or encumbrance upon any assets, properties
or operations of the Company or any of its subsidiaries pursuant to, any
Agreements and Instruments, nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any of its
subsidiaries or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of
its subsidiaries or any of their assets, properties or operations.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or to the knowledge of
the Company threatened, against or affecting the Company or any of its
subsidiaries which is required to be disclosed in the Registration
Statement and the Prospectus (other than as stated therein), or which may
reasonably be expected to result in a Material Adverse Effect, or which may
reasonably be expected to materially and adversely affect the assets,
properties or operations thereof, the performance by the Company of its
obligations under this Agreement, the Indenture, the Notes and the Pledged
Bonds or the consummation of the transactions contemplated in the
Prospectus; and the aggregate of all pending legal or governmental
proceedings to which the Company or any of its subsidiaries is a party or
of which any of their respective assets, properties or operations is the
subject which are not described in the Registration Statement and the
Prospectus, including ordinary routine litigation incidental to the
business, may not reasonably be expected to result
11
<PAGE>
in a Material Adverse Effect.
(xiii) Possession of Licenses and Permits. The Company and its
----------------------------------
subsidiaries possess such franchises, permits, licenses, approvals,
consents, certificates of public convenience and necessity and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies,
including, without limitation, the Washington Utilities and Transportation
Commission (the"Utilities Commission") and cities and towns within the
service territory of the Company, necessary for the Company and its
subsidiaries to conduct the business now operated by them and for the
Company to own and operate the its electric plant and its gas plant; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, result in a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except where the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and effect
would not result in a Material Adverse Effect; and neither the Company nor
any of its subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xiv) Environmental Laws. Except as otherwise stated in the
------------------
Registration Statement and the Prospectus and except as would not, singly
or in the aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code, policy or
rule of common law or any judicial or administrative interpretation thereof
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater,
12
<PAGE>
land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) the Company and its
subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that may
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.
(xv) No Filings, Regulatory Approvals etc. The Utilities Commission
-------------------------------------
has issued an [Order Establishing Compliance with RCW 80.08.040] with
respect to the Notes and the Pledged Bonds (the "Order") and the Order has
not been rescinded, annulled or modified. No other filing with, or
approval, authorization, consent, license, registration, qualification,
order or decree of, any court or governmental authority or agency, domestic
or foreign, is necessary or required for the performance by the Company of
its obligations under this Agreement, the Indenture, the Notes and the
Pledged Bonds or in connection with the transactions contemplated in the
Prospectus, except such as have been previously obtained or rendered, as
the case may be.
(xvi) Investment Company Act. The Company is
----------------------
13
<PAGE>
not, and upon the issuance and sale of the Notes as herein contemplated and
the application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the ("1940 Act").
(xvii) Ratings. The Medium-Term Note Program under which the Notes
-------
are issued (the "Program"), as well as the Notes, are rated [ ] by
Moody's Investors Service, Inc. and [ ] by Standard & Poor's Ratings
Service, or such other rating as to which the Company shall have most
recently notified the Agents pursuant to Section 4(a) hereof.
(b) Additional Certifications. Any certificate signed by any officer
-------------------------
of the Company or any of its subsidiaries and delivered to one or more Agents or
to counsel for the Agents in connection with an offering of Notes to one or more
Agents as principal or through an Agent as agent shall be deemed a
representation and warranty by the Company to such Agent or Agents as to the
matters covered thereby on the date of such certificate and, unless subsequently
amended or supplemented, at each Representation Date subsequent thereto.
3. Purchases as Principal; Solicitations as Agent.
----------------------------------------------
(a) Purchases as Principal. Notes purchased from the Company by the
----------------------
Agents, individually or in a syndicate, as principal shall be made in accordance
with terms agreed upon between such Agent or Agents and the Company (which
terms, unless otherwise agreed, shall, to the extent applicable, include those
terms specified in Exhibit A hereto and shall be agreed upon orally, with
written confirmation prepared by such Agent or Agents and mailed to the
Company). An Agent's commitment to purchase Notes as principal shall be deemed
to have been made on the basis of the representations and warranties of the
Company herein contained and shall be subject to the terms and conditions herein
set forth. Unless the context otherwise requires, references herein to "this
14
<PAGE>
Agreement" shall include the applicable agreement of one or more Agents to
purchase Notes from the Company as principal. Each purchase of Notes, unless
otherwise agreed, shall be at a discount from the principal amount of each such
Note equivalent to the applicable commission set forth in Schedule A hereto.
The Agents may engage the services of any broker or dealer in connection with
the resale of the Notes purchased by them as principal and may allow all or any
portion of the discount received from the Company in connection with such
purchases to such brokers or dealers. At the time of each purchase of Notes
from the Company by one or more Agents as principal, such Agent or Agents shall
specify the requirements for the officers' certificate, opinion of counsel and
comfort letter pursuant to Sections 7(b), 7(c) and 7(d) hereof.
If the Company and two or more Agents enter into an agreement pursuant to
which such Agents agree to purchase Notes from the Company as principal and one
or more of such Agents shall fail at the Settlement Date to purchase the Notes
which it or they are obligated to purchase (the "Defaulted Notes"), then the
nondefaulting Agents shall have the right, within 24 hours thereafter, to make
arrangements for one of them or one or more other Agents or underwriters to
purchase all, but not less than all, of the Defaulted Notes in such amounts as
may be agreed upon and upon the terms herein set forth; provided, however, that
if such arrangements shall not have been completed within such 24-hour period,
then:
(a) if the aggregate principal amount of Defaulted Notes does not
exceed 10% of the aggregate principal amount of Notes to be so purchased by
all of such Agents on the Settlement Date, the nondefaulting Agents shall
be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective initial underwriting
obligations bear to the underwriting obligations of all nondefaulting
Agents; or
(b) if the aggregate principal amount of Defaulted Notes exceeds 10%
of the aggregate principal amount of Notes to be so purchased by
15
<PAGE>
all of such Agents on the Settlement Date, such agreement shall terminate
without liability on the part of any nondefaulting Agent.
No action taken pursuant to this paragraph shall relieve any defaulting Agent
from liability in respect of its default. In the event of any such default
which does not result in a termination of such agreement, either the
nondefaulting Agents or the Company shall have the right to postpone the
Settlement Date for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or the Prospectus or in any other
documents or arrangements.
(b) Solicitations as Agent. On the basis of the representations and
----------------------
warranties herein contained, but subject to the terms and conditions herein set
forth, when agreed by the Company and an Agent, such Agent, as an agent of the
Company, will use its reasonable efforts to solicit offers for the purchase of
Notes upon the terms set forth in the Prospectus. The Agents are not authorized
to appoint sub-agents with respect to Notes sold through them as agent. All
Notes sold through an Agent as agent will be sold at 100% of their principal
amount unless otherwise agreed upon between the Company and such Agent.
The Company reserves the right, in its sole discretion, to suspend
solicitation of offers for the purchase of Notes through an Agent, as an agent
of the Company, commencing at any time for any period of time or permanently.
As soon as practicable after receipt of instructions from the Company, such
Agent will suspend solicitation of offers for the purchase of Notes from the
Company until such time as the Company has advised such Agent that such
solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent, as an
agent of the Company, as set forth in Schedule A hereto.
(c) Administrative Procedures. The purchase price, interest rate or
-------------------------
formula, maturity date and other
16
<PAGE>
terms of the Notes specified in Exhibit A hereto (as applicable) shall be agreed
upon between the Company and the applicable Agent(s) and specified in a pricing
supplement to the Prospectus (each, a "Pricing Supplement") to be prepared by
the Company in connection with each sale of Notes. Except as otherwise specified
in the applicable Pricing Supplement, the Notes will be issued in denominations
of U.S. $1,000 or any larger amount that is an integral multiple of U.S. $1,000.
Administrative procedures with respect to the issuance and sale of the Notes
(the "Procedures") shall be agreed upon from time to time among the Company, the
Agents and the Trustee. The Agents and the Company agree to perform, and the
Company agrees to cause the Trustee to agree to perform, their respective duties
and obligations specifically provided to be performed by them in the Procedures.
4. Covenants of the Company.
------------------------
The Company covenants and agrees with each Agent as follows:
(a) Notice of Certain Events. The Company will notify the Agents
------------------------
immediately, and confirm such notice in writing, of (i) the effectiveness of any
post-effective amendment to the Registration Statement or the filing of any
amendment or supplement to the Prospectus (other than any amendment or
supplement thereto providing solely for the determination of the variable terms
of the Notes or relating solely to the offering of securities other than the
Notes), (ii) the receipt of any comments from the Commission, (iii) any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, (iv)
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement, or of any order preventing or suspending the use of
any preliminary prospectus, or of the initiation of any proceedings for that
purpose or (v) any change in the rating assigned by any nationally recognized
statistical rating organization to the Program or any debt securities (including
the Notes) of the Company, or the public announcement by any nationally
recognized statistical rating organization that it has under surveillance or
review, with possible negative
17
<PAGE>
implications, its rating of the Program or any such debt securities, or the
withdrawal by any nationally recognized statistical rating organization of its
rating of the Program or any such debt securities. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing or Use of Amendments. The Company will give the Agents
---------------------------
advance notice of its intention to file or prepare any additional registration
statement with respect to the registration of additional Notes, any amendment to
the Registration Statement (including any filing under Rule 462(b) of the 1933
Act Regulations) or any amendment or supplement to the prospectus included in
the Registration Statement at the time it became effective or to the Prospectus
(other than an amendment or supplement thereto providing solely for the
determination of the variable terms of the Notes or relating solely to the
offering of securities other than the Notes or an amendment or supplement
pursuant to the requirements of the 1934 Act and the 1934 Act Regulations), will
furnish to the Agents copies of any such document a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file any
such document to which the Agents or counsel for the Agents shall object.
(c) Delivery of the Registration Statement. The Company has furnished
--------------------------------------
to each Agent and to counsel for the Agents, without charge, signed and
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed and conformed copies of all consents and
certificates of experts. The Registration Statement and each amendment thereto
furnished to the Agents will be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) Delivery of the Prospectus. The Company will deliver to each
---------------------------
Agent, without charge, as many
18
<PAGE>
copies of each preliminary prospectus as such Agent may reasonably request, and
the Company hereby consents to the use of such copies for purposes permitted by
the 1933 Act. The Company will furnish to each Agent, without charge, such
number of copies of the Prospectus (as amended or supplemented) as such Agent
may reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Agents will be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(e) Preparation of Pricing Supplements. The Company will prepare,
----------------------------------
with respect to any Notes to be sold to or through one or more Agents pursuant
to this Agreement, a Pricing Supplement with respect to such Notes in a form
previously approved by the Agents. The Company will deliver such Pricing
Supplement no later than 11:00 a.m., New York City time, on the business day
following the date of the Company's acceptance of the offer for the purchase of
such Notes and will file such Pricing Supplement pursuant to Rule 424(b)(3)
under the 1933 Act not later than the close of business of the Commission on the
fifth business day after the date on which such Pricing Supplement is first
used.
(f) Revisions of Prospectus -- Material Changes. Except as otherwise
-------------------------------------------
provided in subsection (m) of this Section 4, if at any time during the term of
this Agreement any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Agents or counsel for
the Company, to amend the Registration Statement in order that the Registration
Statement will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or to amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time
the Prospectus is delivered to a purchaser, or if it shall be necessary, in the
opinion of either such counsel, to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of
19
<PAGE>
the 1933 Act or the 1933 Act Regulations, the Company shall give immediate
notice, confirmed in writing, to the Agents to cease the solicitation of offers
for the purchase of Notes in their capacity as agents and to cease sales of any
Notes they may then own as principal, and the Agents shall as soon as
practicable cease any such solicitation or sales, and the Company will promptly
prepare and file with the Commission, subject to Section 4(b) hereof, such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement and Prospectus comply with such
requirements, and the Company will furnish to the Agents, without charge, such
number of copies of such amendment or supplement as the Agents may reasonably
request. In addition, the Company will comply with the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of each offering of Notes.
(g) Prospectus Revisions -- Periodic Financial Information. Except as
------------------------------------------------------
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be released to the general public interim financial
statement information related to the Company with respect to each of the first
three quarters of any fiscal year or preliminary financial statement information
with respect to any fiscal year, the Company shall furnish such information to
the Agents, confirmed in writing, and shall, as required by the 1933 Act and the
1933 Act Regulations, cause the Prospectus to be amended or supplemented to
include financial information with respect thereto and corresponding information
for the comparable period of the preceding fiscal year, as well as such other
information and explanations as shall be necessary for an understanding thereof
or as shall be required by the 1933 Act or the 1933 Act Regulations.
(h) Prospectus Revisions -- Audited Financial Information. Except as
-----------------------------------------------------
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be released to the general public financial information
included in or derived from the audited consolidated financial statements of the
Company for the preceding fiscal year, the Company shall furnish such
information to the Agents, confirmed in writing, and shall, as required by the
1933 Act and the 1933 Act
20
<PAGE>
Regulations, cause the Prospectus to be amended or supplemented to include such
audited consolidated financial statements and the report or reports, and consent
or consents to such inclusion, of the independent accountants with respect
thereto, as well as such other information and explanations as shall be
necessary for an understanding of such consolidated financial statements or as
shall be required by the 1933 Act or the 1933 Act Regulations.
(i) Earnings Statements. The Company will timely file such reports
-------------------
pursuant to the 1934 Act as are necessary in order to make generally available
to its security holders an earnings statement for the purposes of, and to
provide the benefits contemplated by, the last paragraph of Section 11(a) of the
1933 Act.
(j) Reporting Requirements. The Company, during the period when the
----------------------
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods prescribed by the 1934 Act and the 1934 Act
Regulations.
(k) Restriction on Offers and Sales of Securities. Unless otherwise
---------------------------------------------
agreed upon between one or more Agents acting as principal and the Company,
between the date of an agreement made in accordance with Section 3(a) hereof by
such Agent(s) to purchase the related Notes from the Company and the Settlement
Date with respect thereto, the Company will not, without the prior written
consent of such Agent(s), issue, sell, offer or contract to sell, grant any
option for the sale of, or otherwise dispose of, any debt securities of the
Company (other than the Notes that are to be sold pursuant to such agreement or
commercial paper in the ordinary course of business).
(l) Use of Proceeds. The Company will use the net proceeds received
---------------
by it from the issuance and sale of the Notes in the manner specified in the
Prospectus.
(m) Suspension of Certain Obligations. The Company shall not be
---------------------------------
required to comply with the provisions of subsections (f), (g) or (h) of this
Section 4 during any period from the time (i) the Agents shall
21
<PAGE>
have suspended solicitation of offers for the purchase of Notes in their
capacity as agents pursuant to a request from the Company and (ii) no Agent
shall then hold any Notes purchased from the Company as principal, as the case
may be, until the time the Company shall determine that solicitation of offers
for the purchase of Notes should be resumed or an Agent shall subsequently
purchase Notes from the Company as principal.
5. Conditions of Agents' Obligations.
---------------------------------
The obligations of one or more Agents to purchase Notes from the
Company as principal and to solicit offers for the purchase of Notes as an agent
of the Company, and the obligations of any purchasers of Notes sold through an
Agent as an agent of the Company, will be subject to the accuracy of the
representations and warranties on the part of the Company herein contained or
contained in any certificate of an officer of the Company or any of its
subsidiaries delivered pursuant to the provisions hereof, to the performance and
observance by the Company of its covenants and other obligations hereunder, and
to the following additional conditions precedent:
(a) Effectiveness of Registration Statement. The Registration
---------------------------------------
Statement (including any Rule 462(b) Registration Statement) has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or shall be pending or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Agents.
(b) Legal Opinions. On the date hereof, the Agents shall have
--------------
received the following legal opinions, dated as of the date hereof and in form
and substance reasonably satisfactory to the Agents (it being understood that
such legal opinions will be subject to reasonable and customary assumptions,
qualifications and exclusions):
(1) Opinion of Counsel for the
---------------------------
22
<PAGE>
Company. The favorable opinion of Perkins Coie, counsel for
-------
the Company, to the effect set forth in Exhibit B hereto and to such
further effect as the Agents may reasonably request.
(2) Opinion of Counsel for the Agents. The favorable opinion of
---------------------------------
Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Agents, with
respect to the matters set forth in paragraph __ and the penultimate
paragraph of Exhibit B hereto.
(c) Officer's Certificate. On the date hereof, there shall not have
---------------------
been, since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Agents shall have received a
certificate of the President or a Vice President of the Company and of the chief
financial officer, chief accounting officer or treasurer of the Company, dated
as of the date hereof, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties of the Company herein
contained are true and correct with the same force and effect as though
expressly made at and as of the date of such certificate, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the date of such certificate, and (iv) no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are pending
or, to the best of such officer's knowledge, are threatened by the Commission.
(d) Comfort Letter of Coopers & Lybrand, L.L.P. On the date hereof,
------------------------------------------
the Agents shall have received a letter from Coopers & Lybrand, L.L.P.,, dated
as of the date hereof and in form and substance satisfactory to the Agents, to
the effect set forth in Exhibit C hereto.
(e) Additional Documents. On the date
--------------------
23
<PAGE>
hereof, counsel to the Agents shall have been furnished with such documents and
opinions as such counsel may reasonably require for the purpose of enabling such
counsel to pass upon the issuance and sale of Notes as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations and warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of Notes as herein contemplated shall be reasonably
satisfactory in form and substance to the Agents and to counsel to the Agents.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the applicable Agent or Agents by notice to the Company at any time and any
such termination shall be without liability of any party to any other party
except as provided in Section 10 hereof and except that Sections 8, 9, 11, 14
and 15 hereof shall survive any such termination and remain in full force and
effect.
6. Delivery of and Payment for Notes Sold through an Agent as Agent.
----------------------------------------------------------------
Delivery of Notes sold through an Agent as an agent of the Company
shall be made by the Company to such Agent for the account of any purchaser only
against payment therefor in immediately available funds. In the event that a
purchaser shall fail either to accept delivery of or to make payment for a Note
on the date fixed for settlement, such Agent shall promptly notify the Company
and deliver such Note to the Company and, if such Agent has theretofore paid the
Company for such Note, the Company will promptly return such funds to such
Agent. If such failure has occurred for any reason other than default by such
Agent in the performance of its obligations hereunder, the Company will
reimburse such Agent on an equitable basis for its loss of the use of the funds
for the period such funds were credited to the Company's account.
7. Additional Covenants of the Company.
-----------------------------------
The Company further covenants and agrees with
24
<PAGE>
each Agent as follows:
(a) Reaffirmation of Representations and Warranties. Each acceptance
-----------------------------------------------
by the Company of an offer for the purchase of Notes (whether to one or more
Agents as principal or through an Agent as agent), and each delivery of Notes
(whether to one or more Agents as principal or through an Agent as agent), shall
be deemed to be an affirmation that the representations and warranties of the
Company herein contained are true and correct at the time of such acceptance or
sale, as the case may be, and an undertaking that such representations and
warranties will be true and correct at the time of delivery to such Agent(s) or
to the purchaser or its agent, as the case may be, of the Notes relating to such
acceptance or sale, as the case may be, as though made at and as of each such
time (it being understood that such representations and warranties shall relate
to the Registration Statement and Prospectus as amended and supplemented to each
such time).
(b) Subsequent Delivery of Certificates. Each time that (i) the
-----------------------------------
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for the determination of the
variable terms of the Notes or relating solely to the offering of securities
other than the Notes), (ii) (if required in connection with the purchase of
Notes from the Company by one or more Agents as principal) the Company sells
Notes to one or more Agents as principal or (iii) the Company sells Notes in a
form not previously certified to the Agents by the Company, the Company shall
furnish or cause to be furnished to the Agent(s), forthwith a certificate dated
the date of filing with the Commission or the date of effectiveness of such
amendment or supplement, as applicable, or the date of such sale, as the case
may be, in form reasonably satisfactory to the Agent(s) to the effect that the
statements contained in the certificate referred to in Section 5(c) hereof which
were last furnished to the Agents are true and correct at the time of the filing
or effectiveness of such amendment or supplement, as applicable, or the time of
such sale, as the case may be, as though made at and as of such time (except
that such statements shall be deemed to relate to the Registration Statement and
the Prospectus as amended
25
<PAGE>
and supplemented to such time) or, in lieu of such certificate, a certificate of
the same tenor as the certificate referred to in Section 5(c) hereof, modified
as necessary to relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such certificate (it being
understood that, in the case of clause (ii) above, any such certificate shall
also include a certification that there has been no material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise since the date of the agreement by such Agent(s) to purchase Notes
from the Company as principal).
(c) Subsequent Delivery of Legal Opinions. Each time that (i) the
-------------------------------------
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for the determination of the
variable terms of the Notes or relating solely to the offering of securities
other than the Notes), (ii) (if required in connection with the purchase of
Notes from the Company by one or more Agents as principal) the Company sells
Notes to one or more Agents as principal or (iii) the Company sells Notes in a
form not previously certified to the Agents by the Company, the Company shall
furnish or cause to be furnished forthwith to the Agent(s) and to counsel to the
Agents the written opinion of Perkins Coie, counsel to the Company, or other
counsel reasonably satisfactory to the Agent(s), dated the date of filing with
the Commission or the date of effectiveness of such amendment or supplement, as
applicable, or the date of such sale, as the case may be, in form and substance
reasonably satisfactory to the Agent(s), of the same tenor as the opinion
referred to in Section 5(b)(1) hereof, but modified, as necessary, to relate to
the Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such opinion or, in lieu of such opinion, counsel last
furnishing such opinion to the Agents shall furnish the Agent(s) with a letter
substantially to the effect that the Agent(s) may rely on such last opinion to
the same extent as though it was dated the date of such letter authorizing
reliance (except that statements in such last opinion shall be deemed to relate
to the Registration Statement and the Prospectus as
26
<PAGE>
amended and supplemented to the time of delivery of such letter authorizing
reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that (i) the
--------------------------------------
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information (other than by an amendment or
supplement relating solely to the issuance and/or offering of securities other
than the Notes) or (ii) (if required in connection with the purchase of Notes
from the Company by one or more Agents as principal) the Company sells Notes to
one or more Agents as principal, the Company shall cause Coopers & Lybrand,
L.L.P. forthwith to furnish to the Agent(s) a letter, dated the date of filing
with the Commission or the date of effectiveness of such amendment or
supplement, as applicable, or the date of such sale, as the case may be, in form
satisfactory to the Agent(s), of the same tenor as the letter referred to in
Section 5(d) hereof but modified to relate to the Registration Statement and
Prospectus as amended and supplemented to the date of such letter.
8. Indemnification.
---------------
(a) Indemnification of the Agents. The Company agrees to indemnify
-----------------------------
and hold harmless each Agent and each person, if any, who controls such Agent
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all loss, liability, claim and damage whatsoever,
as incurred, arising out of an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of an untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they
27
<PAGE>
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, provided that (subject to Section
8(d) hereof) any such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by such Agent), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under subparagraph (i) or (ii)
above;
provided, however, that this indemnity does not apply to any loss, liability,
- -------- -------
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by the Agents
expressly for use in the Registration Statement (or any amendment thereto) or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); and provided further, that such indemnity with respect to the
Prospectus shall not inure to the benefit of any Agent (or any person
controlling any Agent) from whom the person asserting any such loss, liability,
claim, damage or expense purchased the Notes which are the subject thereof if
such person did not receive a copy of the Prospectus (or the Prospectus as
supplemented), excluding documents incorporated therein by reference, at or
prior to the confirmation of the sale of such Notes to such person in any case
where such delivery is required by the 1933 Act and the untrue statement or
omission of a material fact
28
<PAGE>
contained in the Prospectus was corrected in the Prospectus as supplemented.
(b) Indemnification of Company, Directors and Officers. Each Agent
--------------------------------------------------
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 8(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Agents expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party
-------------------------------------
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
8(a) hereof, counsel to the indemnified parties shall be selected by the
applicable Agent(s) and, in the case of parties indemnified pursuant to Section
8(b) hereof, counsel to the indemnified shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
-------- -------
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
29
<PAGE>
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 8 or 9 hereof (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any
--------------------------------------------------
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable in accordance with Section
8(a)(iii) for any settlement of the nature contemplated by Section 8(a)(ii)
effected without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
9. Contribution. If the indemnification provided for in Section 8
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate
30
<PAGE>
amount of such losses, liabilities, claims, damages and expenses incurred by
such indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and the
applicable Agent(s), on the other hand, from the offering of the Notes that were
the subject of the claim for indemnification or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, on the one hand, and the
applicable Agent(s), on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and
the applicable Agent(s), on the other hand, in connection with the offering of
the Notes that were the subject of the claim for indemnification shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of such Notes (before deducting expenses) received by the Company and
the total discount or commission received by each applicable Agent, as the case
may be, bears to the aggregate initial offering price of such Notes.
The relative fault of the Company, on the one hand, and the applicable
Agent(s), on the other hand, shall be determined by reference to, among other
things, whether any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the applicable Agent(s) and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Agents agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the applicable Agent(s) were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 9.
31
<PAGE>
Notwithstanding the provisions of this Section 9, (i) no Agent shall
be required to contribute any amount in excess of the amount by which the total
discount or commission received by such Agent in connection with the offering of
the Notes that were the subject of the claim for indemnification exceeds the
amount of any damages which such Agent has otherwise been required to pay by
reason of any applicable untrue or alleged untrue statement or omission or
alleged omission and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. In addition, in connection with an offering of Notes
purchased from the Company by two or more Agents as principal, the respective
obligations of such Agents to contribute pursuant to this Section 9 are several,
and not joint, in proportion to the aggregate principal amount of Notes that
each such Agent has agreed to purchase from the Company.
For purposes of this Section 9, each person, if any, who controls an
Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act shall have the same rights to contribution as such Agent, and each director
of the Company, each officer of the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.
10. Payment of Expenses.
-------------------
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The preparation, filing, printing and delivery of the Registration
Statement as originally filed and all amendments thereto and any preliminary
prospectus, the Prospectus and any amendments or supplements thereto;
(b) The preparation, printing and delivery of this Agreement and
the Indenture;
32
<PAGE>
(c) The preparation, issuance and delivery of the Notes, including any
fees and expenses relating to the eligibility and issuance of Notes in book-
entry form and the cost of obtaining CUSIP or other identification numbers for
the Notes;
(d) The fees and disbursements of the Company's accountants, counsel
and other advisors or agents (including any calculation agent) and of the
Trustee and its counsel;
(e) The reasonable fees and disbursements of counsel to the Agents
incurred in connection with the establishment of the Program and incurred from
time to time in connection with the transactions contemplated hereby;
(f) The fees charged by nationally recognized statistical rating
organizations for the rating of the Program and the Notes;
(g) The fees and expenses incurred in connection with any listing of
Notes on a securities exchange;
(h) The filing fees incident to, and the reasonable fees and
disbursements of counsel to the Agents in connection with, the review, if any,
by the National Association of Securities Dealers, Inc. (the "NASD"); and
(i) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of the Company.
33
<PAGE>
11. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto or thereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the Agents or any controlling person of an Agent, or by or on behalf of the
Company, and shall survive each delivery of and payment for the Notes.
12. Termination.
-----------
(a) Termination of this Agreement. This Agreement (excluding any
-----------------------------
agreement by one or more Agents to purchase Notes from the Company as principal)
may be terminated for any reason, at any time by either the Company or an Agent,
as to itself, upon the giving of 30 days' prior written notice of such
termination to the other party hereto.
(b) Termination of Agreement to Purchase Notes as Principal. The
-------------------------------------------------------
applicable Agent(s) may terminate any agreement by such Agent(s) to purchase
Notes from the Company as principal, immediately upon notice to the Company, at
any time prior to the Settlement Date relating thereto, if (i) there has been,
since the date of such agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
there has occurred any material adverse change in the financial markets in the
United States or any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development or event involving a prospective
change in national or international political, financial or economic conditions,
in each case the effect of which is such as to make it, in the reasonable
judgment of such Agent(s), impracticable to market such Notes or enforce
contracts for the sale of such
34
<PAGE>
Notes, or (iii) trading in any securities of the Company has been suspended or
limited by the Commission or a national securities exchange, or if trading
generally on the New York Stock Exchange or the American Stock Exchange or in
the NASDAQ National Market has been suspended or limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by either of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or (iv) a banking
moratorium has been declared by either Federal or New York authorities, or (v)
the rating assigned by any nationally recognized statistical rating organization
to the Program or any debt securities (including the Notes) of the Company as of
the date of such agreement shall have been lowered or withdrawn since that date
or if any such rating organization shall have publicly announced that it has
under surveillance or review its rating of the Program or any such debt
securities, or (vi) there shall have come to the attention of such Agent(s) any
facts that would cause such Agent(s) to believe that the Prospectus, at the time
it was required to be delivered to a purchaser of such Notes, included an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances existing
at the time of such delivery, not misleading.
(c) General. In the event of any such termination, neither party will
-------
have any liability to the other party hereto, except that (i) the Agents shall
be entitled to any commissions earned in accordance with the third paragraph of
Section 3(b) hereof, (ii) if at the time of termination (a) any Agent shall own
any Notes purchased by it from the Company as principal or (b) an offer to
purchase any of the Notes has been accepted by the Company but the time of
delivery to the purchaser or his agent of such Notes relating thereto has not
occurred, the covenants set forth in Sections 4 and 7 hereof shall remain in
effect until such Notes are so resold or delivered, as the case may be, and
(iii) the covenant set forth in Section 4(i) hereof, the provisions of Section
10 hereof, the indemnity and contribution agreements set forth in Sections 8 and
9 hereof, and the provisions of Sections 11, 14 and 15 hereof shall remain in
effect.
35
<PAGE>
13. Notices.
-------
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail or
by telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
36
<PAGE>
If to the Company:
Puget Sound Energy, Inc.
411-108th Avenue N.E.
Attention: ________________
Telecopy No.: ______________
If to the Agents:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower - 10th Floor
New York, New York 10281-1310
Attention: MTN Product Management
Telecopy No.: (212) 449-2234
[OTHER AGENTS]
[ADDRESS]
Attention: ________________
Telecopy No.: (___) ________
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
14. Parties.
-------
This Agreement shall inure to the benefit of and be binding upon the
Agents and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons, officers and directors referred to in
Sections 8 and 9 hereof and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors, and said controlling persons, officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Notes shall be
37
<PAGE>
deemed to be a successor by reason merely of such purchase.
15. GOVERNING LAW; FORUM.
--------------------
THIS AGREEMENT AND ALL THE RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. ANY SUIT, ACTION OR
PROCEEDING BROUGHT BY THE COMPANY AGAINST ANY AGENT IN CONNECTION WITH OR
ARISING UNDER THIS AGREEMENT SHALL BE BROUGHT SOLELY IN THE STATE OR FEDERAL
COURT OF APPROPRIATE JURISDICTION LOCATED IN THE BOROUGH OF MANHATTAN, THE CITY
OF NEW YORK.
16. Effect of Headings.
------------------
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
17. Counterparts.
------------
This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts hereof shall
constitute a single instrument.
38
<PAGE>
If the foregoing is in accordance with the Agents' understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this Distribution Agreement, along with all counterparts, will become
a binding agreement among the Agents and the Company in accordance with its
terms.
Very truly yours,
PUGET SOUND ENERGY, INC.
By: ____________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:__________________________________________
Authorized Signatory
[OTHER AGENTS]
By:_________________________________________
39
<PAGE>
EXHIBIT 4.1
________________________________________________________________________________
PUGET SOUND ENERGY, INC.
AND
STATE STREET BANK AND TRUST COMPANY
TRUSTEE
____________
INDENTURE
DATED AS OF ____________, 1997
________________________________________________________________________________
<PAGE>
CONTENTS
<TABLE>
<S> <C>
ARTICLE ONE DEFINITIONS................................................. 2
Section 1.01 General...................................................... 2
Section 1.02 Trust Indenture Act.......................................... 2
Section 1.03 Definitions.................................................. 2
ARTICLE TWO FORM, ISSUE, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES... 11
Section 2.01 Form Generally............................................... 11
Section 2.02 Form of Trustee's Certificate of Authentication.............. 12
Section 2.03 Amount Unlimited............................................. 12
Section 2.04 Denominations, Dates, Interest Payment and Record Dates...... 12
Section 2.05 Execution, Authentication, Delivery and Dating............... 14
Section 2.06 Exchange and Registration of Transfer of Notes............... 18
Section 2.07 Mutilated, Destroyed, Lost or Stolen Notes................... 19
Section 2.08 Temporary Notes.............................................. 20
Section 2.09 Cancellation of Notes Paid, etc.............................. 20
Section 2.10 Interest Rights Preserved.................................... 21
Section 2.11 Special Record Date.......................................... 21
Section 2.12 Payment of Notes............................................. 21
Section 2.13 Notes Issuable in the Form of a Global Note.................. 23
ARTICLE THREE REDEMPTION OF NOTES........................................ 25
Section 3.01 Applicability of Article..................................... 25
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Section 3.02 Notice of Redemption; Selection of Notes..................... 25
Section 3.03 Payment of Notes on Redemption; Deposit of Redemption Price.. 26
ARTICLE FOUR PLEDGED FIRST MORTGAGE BONDS; PLEDGED SUBSTITUTED
MORTGAGE BONDS.................................................. 28
[Section 4.01 Delivery of Initial Series of Pledged First Mortgage Bonds... 28
[Section 4.02 Receipt...................................................... 28
Section 4.03 Pledged First Mortgage Bonds Held by the Trustee............. 28
Section 4.04 No Transfer of Pledged First Mortgage Bonds; Exception....... 29
Section 4.05 Delivery to the Company of All Pledged First Mortgage Bonds.. 29
Section 4.06 Further Assurances........................................... 29
Section 4.07 Exchange and Surrender of Pledged First Mortgage Bonds....... 29
Section 4.08 Acceptance of Additional Pledged First Mortgage Bonds........ 30
Section 4.09 Terms of Pledged First Mortgage Bonds........................ 30
Section 4.10 Pledged First Mortgage Bonds as Security for Notes........... 31
Section 4.11 Pledged Substituted Mortgage Bonds........................... 31
ARTICLE FIVE SATISFACTION AND DISCHARGE; UNCLAIMED MONEYS................ 32
Section 5.01 Satisfaction and Discharge................................... 32
Section 5.02 Deposited Moneys to Be Held in Trust by Trustee.............. 35
Section 5.03 Paying Agent to Repay Moneys Held............................ 35
Section 5.04 Return of Unclaimed Moneys................................... 35
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
ARTICLE SIX PARTICULAR COVENANTS OF THE COMPANY......................... 36
Section 6.01 Payment of Principal Premium and Interest.................... 36
Section 6.02 Office for Notices and Payments, etc......................... 36
Section 6.03 Appointments to Fill Vacancies in Trustee's Office........... 36
Section 6.04 Provision as to Paying Agent................................. 36
Section 6.05 Opinions of Counsel.......................................... 38
Section 6.06 Certificates and Notice to Trustee........................... 38
Section 6.07 Negative Covenants........................................... 39
ARTICLE SEVEN NOTEHOLDER LISTS AND REPORTS BY THE COMPANY AND THE
TRUSTEE........................................................ 41
Section 7.01 Noteholder Lists............................................. 41
Section 7.02 Securities and Exchange Commission Reports................... 42
Section 7.03 Reports by the Trustee....................................... 43
ARTICLE EIGHT REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON EVENTS OF
DEFAULT........................................................ 44
Section 8.01 Events of Default............................................ 44
Section 8.02 Enforcement by Trustee....................................... 46
Section 8.03 Application of Moneys Collected by Trustee................... 47
Section 8.04 Proceedings by Noteholders................................... 48
Section 8.05 Proceedings by Trustee....................................... 49
Section 8.06 Remedies Cumulative and Continuing........................... 49
Section 8.07 Direction of Proceedings and Waiver of Defaults by Majority
of Noteholders....................................................... 50
Section 8.08 Notice of Default............................................ 50
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Section 8.09 Undertaking to Pay Costs..................................... 51
ARTICLE NINE CONCERNING THE TRUSTEE..................................... 51
Section 9.01 Duties and Responsibilities of Trustee....................... 51
Section 9.02 Reliance on Documents, Opinions, etc......................... 52
Section 9.03 No Responsibility for Recitals, etc.......................... 53
Section 9.04 Trustee, Authenticating Agent, Paying Agent or Registrar
May Own Notes........................................................ 54
Section 9.05 Moneys to Be Held in Trust................................... 54
Section 9.06 Compensation and Expenses of Trustee......................... 54
Section 9.07 Officers' Certificate as Evidence............................ 55
Section 9.08 Conflicting Interest of Trustee.............................. 55
Section 9.09 Existence and Eligibility of Trustee......................... 55
Section 9.10 Resignation or Removal of Trustee............................ 56
Section 9.11 Appointment of Successor Trustee............................. 57
Section 9.12 Acceptance by Successor Trustee.............................. 57
Section 9.13 Succession by Merger, etc.................................... 58
Section 9.14 Limitations on Rights of Trustee as a Creditor............... 58
Section 9.15 Authenticating Agent......................................... 58
ARTICLE TEN CONCERNING THE NOTEHOLDERS.................................. 59
Section 10.01 Action by Noteholders....................................... 59
Section 10.02 Proof of Execution by Noteholders........................... 60
Section 10.03 Who Deemed Absolute Owners.................................. 60
Section 10.04 Company-Owned Notes Disregarded............................. 60
</TABLE>
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<TABLE>
<S> <C>
Section 10.05 Revocation of Consents; Future Holders Bound................ 61
Section 10.06 Record Date for Noteholder Acts............................. 61
ARTICLE ELEVEN NOTEHOLDERS' MEETING..................................... 62
Section 11.01 Purposes of Meetings........................................ 62
Section 11.02 Call of Meetings by Trustee................................. 62
Section 11.03 Call of Meetings by Company or Noteholders.................. 62
Section 11.04 Qualifications for Voting................................... 63
Section 11.05 Regulations................................................. 63
Section 11.06 Voting...................................................... 64
Section 11.07 Rights of Trustee or Noteholders Not Delayed................ 64
ARTICLE TWELVE CONSOLIDATION, MERGER, SALE, TRANSFER OR OTHER
DISPOSITION................................................... 65
Section 12.01 Company May Consolidate, etc. Only on Certain Terms.......... 65
Section 12.02 Successor Corporation Substituted........................... 66
ARTICLE THIRTEEN SUPPLEMENTAL INDENTURES................................ 66
Section 13.01 Supplemental Indentures Without Consent of Noteholders...... 66
Section 13.02 Supplemental Indentures With Consent of Noteholders......... 67
Section 13.03 Compliance With Trust Indenture Act; Effect of Supplemental
Indentures........................................................... 69
Section 13.04 Notation on Notes........................................... 69
Section 13.05 Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee.................................................... 69
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
ARTICLE FOURTEEN IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND
DIRECTORS...................................................... 70
Section 14.01 Indenture and Notes Solely Corporate Obligations............ 70
ARTICLE FIFTEEN MISCELLANEOUS PROVISIONS................................ 70
Section 15.01 Provisions Binding on Company's Successors.................. 70
Section 15.02 Official Acts by Successor Corporation...................... 70
Section 15.03 Notices..................................................... 71
Section 15.04 Governing Law............................................... 71
Section 15.05 Evidence of Compliance With Conditions Precedent............ 71
Section 15.06 Business Days............................................... 73
Section 15.07 Trust Indenture Act to Control.............................. 73
Section 15.08 Table of Contents, Headings, Etc............................ 73
Section 15.09 Execution in Counterparts................................... 73
Section 15.10 Manner of Mailing Notice to Noteholders..................... 73
Section 15.11 Approval by Trustee of Counsel.............................. 74
</TABLE>
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<PAGE>
CROSS REFERENCE SHEET SHOWING THE LOCATION IN
THE INDENTURE OF THE PROVISIONS INSERTED
PURSUANT TO SECTIONS 310 THROUGH 318(A) INCLUSIVE
OF THE TRUST INDENTURE ACT OF 1939
<TABLE>
<CAPTION>
SECTION OF TRUST
INDENTURE ACT SECTION OF INDENTURE PAGE
- ------------------- ---------------------------------------------------------- ------------
<S> <C> <C>
310(a)(1) 9.09 55
310(a)(2) 9.09 55
310(a)(3) NOT APPLICABLE --
310(a)(4) NOT APPLICABLE --
310(a)(5) 9.09 55
310(b) 9.08 55
310(c) NOT APPLICABLE --
311(a) 9.14 58
311(b) 9.14 58
311(c) NOT APPLICABLE --
312(a) 7.01(a) 41
312(b) 7.01(b) 41-42
312(c) 7.01(c) 42
313(a) 7.03(a) 43
313(b) 7.03(b) 43
313(c) 7.03(d) 43-44
313(d) 7.03(c) and 703(d) 43-44
314(a) 7.02(a), 7.02(b), 7.02(c) and 6.06 38-39,42-43
314(b) 6.05 38
314(c)(1) Definition of Officers' Certificate, 6.06 and 15.05(a) 6,38-39,71
314(c)(2) Definition of Opinion of Counsel and 15.05 6,71-73
314(c)(3) NOT APPLICABLE --
314(d)(1) 4.06 29
314(d)(2) 4.06 29
314(d)(3) 4.06 29
314(e) 15.05(b) 71-72
314(f) NOT APPLICABLE --
315(a) 9.01 and 9.02 51-53
315(b) 8.08 50
315(c) 9.01(a) 51
315(d) 9.01(b) 51
315(e) 8.09 51
316(a) 8.07 50
10.04 60-61
13.02 67-69
316(b) 8.04 48-49
13.02 67-69
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
SECTION OF TRUST
INDENTURE ACT SECTION OF INDENTURE PAGE
- ------------------- ---------------------------------------------------------- ------------
<S> <C> <C>
316(c) 10.06 61
317(a)(1) 8.02(b) 47
317(a)(2) 8.02(a) 46-47
317(b) 5.02 35
6.04 36-37
318(a) 15.07 73
</TABLE>
-viii-
<PAGE>
THIS INDENTURE, dated as of ___________, 1997, between PUGET SOUND ENERGY,
INC., a corporation organized and existing under the laws of the State of
Washington (the "Company"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts bank and trust company organized and existing under the laws of
the Commonwealth of Massachusetts, as trustee (the "Trustee").
WITNESSETH
WHEREAS, the Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its Senior Notes (the
"Notes"), to be issued as in this Indenture provided;
WHEREAS, subject to the provisions of Section 4.10 hereof, the Company has
issued Pledged First Mortgage Bonds (as hereinafter defined) and has delivered
such Pledged First Mortgage Bonds to the Trustee to hold in trust for the
benefit of the respective Holders (as hereinafter defined) from time to time of
the related issue of Notes, and, pursuant to the terms and provisions hereof,
the Company may deliver additional Pledged First Mortgage Bonds to the Trustee
for such purpose or require the Trustee to deliver to the Company for
cancellation any and all Pledged First Mortgage Bonds held by the Trustee;
AND WHEREAS, all acts and things necessary to make this Indenture a valid
agreement according to its terms have been done and performed, and the execution
of this Indenture and the issue hereunder of the Notes have in all respects been
duly authorized;
NOW THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes are,
and are to be authenticated, issued and delivered and in consideration of the
premises and of the purchase and acceptance of the Notes by the Holders thereof
and of the sum of One Dollar duly paid to it by the Trustee at the execution of
this Indenture, the receipt whereof is hereby acknowledged, the Company
covenants and agrees with the Trustee for the equal and proportionate benefit of
the respective Holders from time to time of the Notes, as follows:
<PAGE>
ARTICLE ONE
DEFINITIONS
SECTION 1.01 GENERAL
The terms defined in this Article One (except as herein otherwise expressly
provided or unless the context otherwise requires) for all purposes of this
Indenture and of any indenture supplemental hereto shall have the respective
meanings specified in this Article One.
SECTION 1.02 TRUST INDENTURE ACT
(a) Whenever this Indenture refers to a provision of the Trust Indenture
Act of 1939, as amended (the "TIA"), such provision is incorporated by reference
in and made a part of this Indenture.
(b) Unless otherwise indicated, all terms used in this Indenture that are
defined by the TIA, by reference to another statute or defined by a rule of the
SEC (as hereinafter defined) under the TIA shall have the meanings assigned to
them in the TIA or such statute or rule as in force on the date of execution of
this Indenture.
SECTION 1.03 DEFINITIONS
For purposes of this Indenture, the following terms shall have the
following meanings.
AUTHENTICATING AGENT:
The term "Authenticating Agent" shall mean any agent of the Trustee which
shall be appointed and acting pursuant to Section 9.15 hereof.
AUTHORIZED AGENT:
The term "Authorized Agent" shall mean any agent of the Company designated
as such by an Officers' Certificate delivered to the Trustee.
BOARD OF DIRECTORS:
The term "Board of Directors" shall mean the Board of Directors of the
Company or any other duly authorized committee of such Board of Directors.
-2-
<PAGE>
BOARD RESOLUTION:
The term "Board Resolution" shall mean a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
BONDHOLDERS' CERTIFICATE:
The term "Bondholders' Certificate" shall mean a certificate signed by the
inspectors of votes, or any other party performing such duties, of the
applicable meeting of the holders of the First Mortgage Bonds issued under the
applicable First Mortgage or by the applicable Mortgage Trustee in the case of
consents of such holders that are sought without a meeting.
BUSINESS DAY:
The term "Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday that is not a day on which banking institutions or trust
companies in the Borough of Manhattan, The City of New York, or in the city
where the corporate trust office of the Trustee is located, are obligated or
authorized by law or executive order to close.
COMPANY:
The term "Company" shall mean the corporation named as the "Company" in the
first paragraph of this Indenture, and its successors and assigns permitted
hereunder.
COMPANY ORDER:
The term "Company Order" shall mean a written order signed in the name of
the Company by one of the Chairman, the President, any Vice President, the
Treasurer or an Assistant Treasurer, and the Secretary or an Assistant Secretary
of the Company, and delivered to the Trustee.
CORPORATE TRUST OFFICE OF THE TRUSTEE:
The term "corporate trust office of the Trustee", or other similar term,
shall mean the corporate trust office of the Trustee, at which at any particular
time its corporate trust business shall be principally administered, which
office is at the date of the execution of this Indenture located at Two
International Place, 4th Floor, Boston, MA 02102.
-3-
<PAGE>
DEBT:
The term "Debt" shall mean indebtedness for money borrowed, but shall
exclude indebtedness maturing by its terms in twelve months or less from the
date of determination.
DEPOSITARY:
The term "Depositary" shall mean, unless otherwise specified in a Company
Order pursuant to Section 2.05 hereof, The Depositary Trust Company, New York,
New York, or any successor thereto registered and qualified under the Securities
and Exchange Act of 1934, as amended, or other applicable statute or regulation.
EVENT OF DEFAULT:
The term "Event of Default" shall mean any event specified in Section 8.01
hereof, continued for the period of time, if any, and after the giving of the
notice, if any, therein designated.
FIRST MORTGAGE:
The term "First Mortgage" shall mean, individually, each of the Fortieth
Supplemental Indenture dated as of September 1, 1954 from the Company to State
Street Bank and Trust, as successor trustee to Old Colony Trust Company of
Boston, as supplemented and amended from time to time, and the Indenture of
First Mortgage dated as of April 1, 1957 from Washington Natural Gas Company to
Harris Trust and Savings Bank, as trustee, as supplemented and amended from time
to time.
FIRST MORTGAGE BONDS:
The term "First Mortgage Bonds" shall mean all first mortgage bonds issued
by the Company and outstanding under each First Mortgage, other than Pledged
First Mortgage Bonds.
GLOBAL NOTE:
The term "Global Note" shall mean a Note that pursuant to Section 2.05
hereof is issued to evidence Notes, that is delivered to the Depositary or
pursuant to the instructions of the Depositary and that shall be registered in
the name of the Depositary or its nominee.
-4-
<PAGE>
INDENTURE:
The term "Indenture" shall mean this instrument as originally executed or,
if amended or supplemented as herein provided, as so amended or supplemented.
INITIAL NOTES:
The term "Initial Notes" shall mean Notes in an aggregate principal amount
of $_____________ authenticated and delivered upon the execution of this
Indenture.
INTEREST PAYMENT DATE:
The term "Interest Payment Date" shall mean, unless otherwise specified in
a Company Order pursuant to Section 2.05 hereof, (a) each March 15 and September
15 during the period any Note is outstanding (provided that the first Interest
Payment Date for any Note, the Original Issue Date of which is after a Regular
Record Date but prior to the respective Interest Payment Date, shall be the
Interest Payment Date following the next succeeding Regular Record Date), (b) a
date of maturity of such Note and (c) only with respect to defaulted interest on
such Note, the date established by the Trustee for the payment of such defaulted
interest pursuant to Section 2.11 hereof.
MATURITY:
The term "maturity," when used with respect to any Note, shall mean the
date on which the principal of such Note becomes due and payable as therein or
herein provided, whether at the stated maturity thereof or by declaration of
acceleration, redemption or otherwise.
MORTGAGE:
The term "Mortgage" shall mean and include any mortgage, pledge, lien or
security interest.
MORTGAGE TRUSTEE:
The term "Mortgage Trustee" shall mean the Person serving as trustee at the
time under either First Mortgage or a Substituted Mortgage.
NOTE OR NOTES:
The term "Note" or "Notes" shall mean any Note or Notes, as the case may
be, authenticated and delivered under this Indenture, including any Global Note.
-5-
<PAGE>
NOTEHOLDER:
The term "Noteholder," "Holder of Notes" or "Holder" shall mean any Person
in whose name at the time a particular Note is registered on the books of the
Trustee kept for that purpose in accordance with the terms hereof.
OFFICERS' CERTIFICATE:
The term "Officers' Certificate" when used with respect to the Company,
shall mean a certificate signed by one of the Chairman, the President, any Vice
President, the Treasurer or an Assistant Treasurer, and by the Secretary or an
Assistant Secretary of the Company.
OPINION OF COUNSEL:
The term "Opinion of Counsel" shall mean an opinion in writing signed by
legal counsel reasonably acceptable to the Trustee, which legal counsel may be
an employee of the Company, meeting the applicable requirements of Section 15.05
hereof. If the Indenture requires the delivery of an Opinion of Counsel to the
Trustee, the text and substance of which has been previously delivered to the
Trustee, the Company may satisfy such requirement by the delivery by the legal
counsel that delivered such previous Opinion of Counsel of a letter to the
Trustee to the effect that the Trustee may rely on such previous Opinion of
Counsel as if such Opinion of Counsel was dated and delivered the date delivery
of such Opinion of Counsel is required. Any Opinion of Counsel may contain
conditions and qualifications satisfactory to the Trustee.
ORIGINAL ISSUE DATE:
The term "Original Issue Date" shall mean for a Note, or portions thereof,
the date upon which it, or such portion, was issued by the Company pursuant to
this Indenture and authenticated by the Trustee (other than in connection with a
transfer, exchange or substitution).
OUTSTANDING:
The term "outstanding," when used with reference to Notes, shall, subject
to Section 10.04 hereof, mean, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except
(a) Notes theretofore canceled by the Trustee or delivered to the Trustee
for cancellation;
-6-
<PAGE>
(b) Notes, or portions thereof, for the payment or redemption of which
moneys in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company), provided that if such
Notes are to be redeemed prior to the maturity thereof notice of such redemption
shall have been given as provided in Article Three, or provisions satisfactory
to the Trustee shall have been made for giving such notice;
(c) Notes, or portions thereof that have been paid and discharged or are
deemed to have been paid and discharged pursuant to the provisions of this
Indenture; and
(d) Notes in lieu of or in substitution for which other Notes shall have
been authenticated and delivered, or which have been paid, pursuant to Section
2.07 hereof.
PERMITTED ENCUMBRANCES:
The term "Permitted Encumbrances" shall mean any of the following:
(a) Liens for taxes, assessments or governmental charges for the then
current year and taxes, assessments or governmental charges not then delinquent;
liens for worker's compensation awards and similar obligations not then
delinquent; mechanics', laborers', materialmen's and similar liens not then
delinquent; and any of such liens, whether or not delinquent, whose validity is
at the time being contested in good faith by the Company;
(b) Liens and charges incidental to construction or current operation which
have not at such time been filed or asserted or the payment of which has been
adequately secured or which are insignificant in amount;
(c) Liens, securing obligations not assumed by the Company and on account
of which it has not paid and does not expect to pay interest directly or
indirectly, existing upon real estate over or in respect of which the Company
has a right of way or other easement for transmission or distribution purposes;
provided that the loss of all such easements would not materially adversely
affect the operations of the Company;
(d) Any right which the United States of America or any municipal or
governmental body or agency may have by virtue of any franchise, license,
contract or statute to recapture or to purchase, or designate a purchaser of or
order the sale of, any property of the Company upon payment of reasonable
compensation therefor, or upon reasonable compensation or conditions to
terminate any franchise, license or other
-7-
<PAGE>
rights before the expiration date thereof or to regulate the property and
business of the Company;
(e) Liens of judgments covered by insurance, or upon appeal and covered by
supersedeas bond, or if not so covered not exceeding at any one of time $10
million in aggregate amount;
(f) Easements or reservations in respect of any property of the Company for
the purpose of transmission or distribution lines or other rights-of-way,
including overhead and underground transmission and distribution lines and
pipelines, or similar purposes, zoning ordinances, regulations, reservations,
restrictions, covenants, party wall agreements, conditions of records and other
encumbrances (other than to secure the payment of money), none of which are such
as to interfere with the proper operation and development of the property
affected thereby; and
(g) Any lien reserved as security for rent or for compliance with other
provisions of the lease in case of any leasehold estate.
PERSON:
The term "Person" shall mean any individual, corporation, partnership,
limited partnership, joint venture, limited liability company, limited liability
partnership, association, joint-stock company, trust, unincorporated
organization or government or any agent or political subdivision thereof.
PLEDGED FIRST MORTGAGE BONDS:
The term "Pledged First Mortgage Bonds" shall mean any first mortgage bonds
issued by the Company under either First Mortgage and delivered to the Trustee
pursuant to Section 4.01 or 4.08 hereof.
PLEDGED SUBSTITUTED MORTGAGE BONDS:
The term "Pledged Substituted Mortgage Bonds" shall mean any mortgage bonds
issued by the Company under a Substituted Mortgage and delivered to the Trustee
pursuant to Section 4.11 hereof.
PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY:
The term "principal executive office of the Company" shall mean 411 - 108th
Avenue N.E., Bellevue, Washington 98004-5515, or such other place where the main
corporate offices of the Company are located as designated in writing to the
Trustee by an Authorized Agent.
-8-
<PAGE>
PRINCIPAL PROPERTY:
The term "Principal Property" shall mean (i) any interest in real property
owned by the Company, and (ii) any asset owned by the Company that is
depreciable in accordance with generally accepted accounting principles,
provided that such real property interest or other depreciable asset is Utility
Property.
REGULAR RECORD DATE:
The term "Regular Record Date" shall mean, unless otherwise specified in a
Company Order pursuant to Section 2.05, for an Interest Payment Date for a
particular Note the last day of the calendar month next preceding such Interest
Payment Date unless such Interest Payment Date is the date of maturity of such
Note, in which event, the Regular Record Date shall be the date of maturity of
such Note.
RELATED ISSUE OF NOTES:
The term "related issue of Notes," when used in reference to an issue of
Pledged First Mortgage Bonds, shall mean the issue of Notes in respect of which
such Pledged First Mortgage Bonds were delivered to the Trustee pursuant to
Section 4.08 hereof upon the initial authentication and issuance of such Notes
pursuant to Section 2.05 hereof and when used in reference to an issue of
Pledged Substituted Mortgage Bonds shall mean the issue of Notes in respect of
which such Pledged Substituted Mortgage Bonds were delivered to the Trustee
pursuant to Section 4.11 hereof.
RELATED ISSUE OF PLEDGED FIRST MORTGAGE BONDS:
The term "related issue of Pledged First Mortgage Bonds," when used in
reference to an issue of Notes, shall mean the issue of Pledged First Mortgage
Bonds delivered to the Trustee pursuant to Section 4.08 hereof in connection
with the initial authentication and issuance of such Notes pursuant to Section
2.05 hereof.
RELATED ISSUE OF PLEDGED SUBSTITUTED MORTGAGE BONDS:
The term "related issue of Pledged Substituted Mortgage Bonds," when used
in reference to an issue of Notes, shall mean the issue of Pledged Substituted
Mortgage Bonds delivered to the Trustee pursuant to Section 4.11 hereof.
RESPONSIBLE OFFICER:
The term "responsible officer" or "responsible officers" when used with
respect to the Trustee shall mean any officer in the Corporate Trust
Administration
-9-
<PAGE>
department of the Trustee, or any other officer or assistant officer of the
Trustee customarily performing functions similar to those performed by the
persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his or her knowledge of and
familiarity with the particular subject.
SEC:
The term "SEC" shall mean the United States Securities and Exchange
Commission or, if at any time hereafter the SEC is not existing or performing
the duties now assigned to it under the TIA, then the body performing such
duties.
SPECIAL RECORD DATE:
The term "Special Record Date" shall mean, with respect to any Note, the
date established by the Trustee in connection with the payment of defaulted
interest on such Note pursuant to Section 2.11 hereof.
STATED MATURITY:
The term "stated maturity" shall mean, with respect to any Note, the last
date on which principal on such Note becomes due and payable as therein or
herein provided, other than by declaration of acceleration or by redemption.
SUBSTITUTED MORTGAGE:
The term "Substituted Mortgage" shall mean a mortgage indenture of the
Company designated by the Company to the Trustee as a Substituted Mortgage
pursuant to Section 4.11 hereof.
SUBSTITUTION DATE:
The term "Substitution Date" shall mean the date as of which all First
Mortgage Bonds have been retired through payment, redemption, or otherwise
(including those First Mortgage Bonds the payment for which has been provided
for in accordance with the applicable First Mortgage) at, before or after the
maturity thereof.
TRUSTEE:
The term "Trustee" shall mean State Street Bank and Trust Company and,
subject to Article Nine, shall also include any successor Trustee.
-10-
<PAGE>
U.S. GOVERNMENT OBLIGATIONS:
The term "U.S. Government Obligations" shall mean (i) direct non-callable
obligations of, or noncallable obligations guaranteed as to timely payment of
principal and interest by, the United States of America or an agency thereof for
the payment of which obligations or guarantee the full faith and credit of the
United States is pledged or (ii) certificates or receipts representing direct
ownership interests in obligations or specified portions (such as principal or
interest) of obligations described in clause (i) above, which obligations are
held by a custodian in safekeeping in a manner satisfactory to the Trustee.
UTILITY PROPERTY:
The term "Utility Property" shall mean and comprise property of the
Company, located in the State of Washington or in any state contiguous thereto
which (except as provided below) is used by or useful to the Company in the
business of (a) generating, transmitting, distributing, utilizing, purchasing,
furnishing and/or disposing of electricity, for heat, light, power, or
refrigeration or any other uses, or in any business which is incidental thereto,
or (b) furnishing, purchasing, storing, processing, manufacturing, utilizing,
transmitting, supplying, liquefying, distributing and/or disposing of gas,
whether manufactured, natural or liquefied petroleum gases or a mixture of any
thereof, for heat, light, power, or refrigeration or any other uses, or in any
business which is incidental thereto.
ARTICLE TWO
FORM, ISSUE, EXECUTION, REGISTRATION AND
EXCHANGE OF NOTES
SECTION 2.01 FORM GENERALLY
(a) If the Notes are in the form of a Global Note they shall be in
substantially the form set forth in Exhibit A (or, following the Substitution
Date, Exhibit C) to this Indenture, and, if the Notes are not in the form of a
Global Note, they shall be in substantially the form set forth in Exhibit B (or,
following the Substitution Date, Exhibit D) to this Indenture, or, in any case,
in such other form as shall be established by a Board Resolution, or a Company
Order pursuant to a Board Resolution, or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with applicable rules
of any securities exchange or of the Depositary or with
-11-
<PAGE>
applicable law or as may, consistently herewith, be determined by the officers
executing such Notes, as evidenced by their execution of such Notes.
(b) The definitive Notes shall be typed, printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Notes, as evidenced by their execution
of such Notes.
SECTION 2.02 FORM OF TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
The Trustee's certificate of authentication on all Notes shall be in
substantially the following form:
Trustee's Certificate of Authentication
This Note is one of the Notes of the series herein designated, described or
provided for in the within-mentioned Indenture.
___________________________________
as Trustee
By:________________________________
Authorized Officer
SECTION 2.03 AMOUNT UNLIMITED
The aggregate principal amount of Notes that may be authenticated and
delivered under this Indenture is unlimited, subject to compliance with the
provisions of this Indenture.
SECTION 2.04 DENOMINATIONS, DATES, INTEREST PAYMENT AND RECORD DATES
(a) The Notes shall be issuable in registered form without coupons in
denominations of $1,000 and integral multiples thereof or such other amount or
amounts as may be authorized by the Board of Directors or a Company Order
pursuant to a Board Resolution or in one or more indentures supplemental hereto.
(b) Each Note shall be dated and issued as of the date of its
authentication by the Trustee and shall bear an Original Issue Date or, as
provided in Section 2.13(e) hereof, two or more Original Issue Dates; each Note
issued upon transfer, exchange or substitution of a Note shall bear the Original
Issue Date or Dates of such transferred, exchanged or substituted Note, subject
to the provisions of Section 2.13(e) hereof.
-12-
<PAGE>
(c) Each Note shall bear interest from the later of (1) its Original Issue
Date (or, if pursuant to Section 2.13 hereof, a Global Note has two or more
Original Issue Dates, interest shall, beginning on each such Original Issue
Date, begin to accrue for that part of the principal amount of such Global Note
to which that Original Issue Date is applicable), or (2) the most recent date to
which interest has been paid or duly provided for with respect to such Note
until the principal of such Note is paid or made available for payment, and
interest on each Note shall be payable on each Interest Payment Date after the
Original Issue Date.
(d) Each Note shall mature on a stated maturity specified in the Note. The
principal amount of each outstanding Note shall be payable on the maturity date
or dates specified therein.
(e) Unless otherwise specified in a Company Order pursuant to Section 2.05
hereof, interest on each of the Notes shall be calculated on the basis of a 360-
day year of twelve 30-day months and shall be computed at a fixed rate until the
maturity of such Notes. The method of computing interest on any Notes not
bearing a fixed rate of interest shall be set forth in a Company Order pursuant
to Section 2.05 hereof. Unless otherwise specified in a Company Order pursuant
to Section 2.05 hereof, principal, interest and premium on the Notes shall be
payable in the currency of the United States.
(f) Except as provided in the following sentence, the Person in whose name
any Note is registered at the close of business on any Regular Record Date or
Special Record Date with respect to an Interest Payment Date for such Note shall
be entitled to receive the interest payable on such Interest Payment Date
notwithstanding the cancellation of such Note upon any registration of transfer,
exchange or substitution of such Note subsequent to such Regular Record Date or
Special Record Date and prior to such Interest Payment Date. Any interest
payable at maturity shall be paid to the Person to whom the principal of such
Note is payable.
(g) Promptly after each Regular Record Date that is not a date of maturity,
the Trustee shall furnish to the Company a notice setting forth the total amount
of the interest payments to be made on the applicable Interest Payment Date, and
to the Depositary a notice setting forth the total amount of interest payments
to be made on Global Notes on such Interest Payment Date. The Trustee (or any
duly selected paying agent) shall provide to the Company during each month that
precedes an Interest Payment Date a list of the principal, interest and premium,
if any, to be paid on Notes on such Interest Payment Date and to the Depositary
a list of the principal, interest and premium, if any, to be paid on Global
Notes on such Interest Payment Date. Promptly after the first Business Day of
each month, the Trustee shall furnish to the Company a written notice setting
forth the aggregate principal amount of the
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<PAGE>
Global Notes. The Trustee, as long as it is paying agent, shall assume
responsibility for withholding taxes on interest paid as required by law except
with respect to any Global Note.
SECTION 2.05 EXECUTION, AUTHENTICATION, DELIVERY AND DATING
(a) The Notes shall be executed on behalf of the Company by one of the
Chairman, the President, any Vice President, the Treasurer or an Assistant
Treasurer of the Company and attested by the Secretary or an Assistant Secretary
of the Company. The signature of any of these officers on the Notes may be
manual or facsimile.
(b) Notes bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall continue to be valid
obligations of the Company, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of
such Notes or did not hold such offices at the date of such Notes.
(c) At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Notes executed by the Company to the
Trustee for authentication, together with or preceded by one or more Company
Orders for the authentication and delivery of such Notes, and the Trustee in
accordance with any such Company Order shall authenticate and deliver such
Notes. The Notes shall be issued in series. Such Company Order shall specify
the following with respect to each issue of Notes: (i) any limitations on the
aggregate principal amount of the Notes to be issued as part of such series,
(ii) the Original Issue Date or Dates for such Notes, (iii) the stated maturity
of such Notes, (iv) the interest rate or rates, or method of calculation of such
rate or rates, for such Notes, (v) the terms, if any, regarding the optional or
mandatory redemption of such Notes, including the redemption date or dates, if
any, and the price or prices applicable to such redemption (including any
premium), (vi) whether or not such Notes shall be entitled to the benefit of any
sinking fund, and the terms, if any, of such sinking fund, (vii) whether or not
such Notes shall be issued in whole or in part in the form of a Global Note and,
if so, the Depositary for such Global Note, (viii) the designation of such
Notes, (ix) if the form of such Notes is not as described in Exhibit A, Exhibit
B, Exhibit C, or Exhibit D hereto, the form of such Notes, (x) the maximum
annual interest rate, if any, of the Notes permitted for such issue, (xi) any
other information necessary to complete the Notes of such issue, (xii) if prior
to the Substitution Date, the designation of the related issue of Pledged First
Mortgage Bonds being delivered to the Trustee in connection with the issuance of
such Notes, (xiii) if on or after the Substitution Date,
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the designation of the related issue of Pledged Substituted Mortgage Bonds, if
any, (xiv) the establishment of any office or agency pursuant to Section 6.02
hereof and (xv) any other terms of such series not inconsistent with this
Indenture. Prior to authenticating any Notes, and in accepting the additional
responsibilities under this Indenture in relation to such Notes, the Trustee
shall receive from the Company the following at or before the issuance of such
Notes, and (subject to Section 9.01 hereof) shall be fully protected in relying
upon:
(1) A Board Resolution authorizing such Company Order or Orders and, if the
form of Notes is established by a Board Resolution or a Company Order pursuant
to a Board Resolution, a copy of such Board Resolution;
(2) an Opinion of Counsel stating substantially the following, subject to
customary qualifications and exceptions:
(A) if the form of Notes has been established by or pursuant to a Board
Resolution, a Company Order pursuant to a Board Resolution or in a supplemental
indenture as permitted by Section 2.01 hereof, that such form has been
established in conformity with this Indenture;
(B) that this Indenture has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of creditors' rights and the
application of general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity) and except as enforcement of
provisions of the Indenture may be limited by state laws affecting the remedies
for the enforcement of the security provided for in the Indenture;
(C) if prior to the Substitution Date, that the related issue of Pledged
First Mortgage Bonds being delivered to the Trustee in connection with the
issuance of such Notes has been duly authorized, executed and delivered, and
that such Pledged First Mortgage Bonds and the applicable First Mortgage are
valid and binding obligations of the Company, enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application relating to or affecting the enforcement of creditors'
rights and the application of general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity) and except as
enforcement of provisions thereof may be limited by state laws affecting the
remedies for the enforcement of the security provided for in the First
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Mortgage; and that such Pledged First Mortgage Bonds are entitled to the benefit
of the applicable First Mortgage, equally and ratably, with all First Mortgage
Bonds and other Pledged First Mortgage Bonds (if any) outstanding under the
applicable First Mortgage, except as to sinking fund provisions;
(D) that the Indenture and, if any Pledged First Mortgage Bonds are, or are
to be, outstanding, the applicable First Mortgage are qualified to the extent
necessary under the TIA;
(E) if any Pledged Substituted Mortgage Bonds are to be delivered, that the
related issue of Pledged Substituted Mortgage Bonds being delivered to the
Trustee in connection with the issuance of such Notes has been duly authorized,
executed and delivered, and that such Pledged Substituted Mortgage Bonds and the
Substituted Mortgage are valid and binding obligations of the Company,
enforceable in accordance with their terms, except to the extent that
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application relating to or
affecting the enforcement of creditors' rights and the application of general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity) and except as enforcement of provisions thereof
may be limited by state laws affecting the remedies for the enforcement of the
security provided for in the Substituted Mortgage; and that such Pledged
Substituted Mortgage Bonds are entitled to the benefit of the Substituted
Mortgage, equally and ratably, with all Pledged Substituted Mortgage Bonds (if
any) outstanding thereunder, except as to sinking fund provisions;
(F) that the Indenture and, if any Pledged Substituted Mortgage Bonds are,
or are to be, outstanding, the Substituted Mortgage are qualified to the extent
necessary under the TIA;
(G) that such Notes have been duly authorized and executed by the Company,
and when authenticated by the Trustee and issued by the Company in the manner
and subject to any conditions specified in such Opinion of Counsel, will
constitute valid and binding obligations of the Company, enforceable in
accordance with their terms, except to the extent that enforcement thereof may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application relating to or affecting the enforcement of
creditors' rights and the application of general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity) and except as enforcement of provisions of this Indenture may be limited
by state laws affecting the remedies for the enforcement of the security
provided for in this Indenture;
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(H) that the issuance of the Notes and, if applicable, the delivery by the
Company of the related issue of Pledged First Mortgage Bonds or Pledged
Substituted Mortgage Bonds in connection therewith will not result in any
default under this Indenture, the First Mortgage or the Substituted Mortgage (if
applicable), or any other contract, indenture, loan agreement or other
instrument to which the Company is a party or by which it or any of its property
is bound;
(I) that all consents or approvals of the Washington Utilities and
Transportation Commission (or any successor agency) and of any other federal or
state regulatory agency required in connection with the Company's execution and
delivery of this Indenture, such Notes and any Pledged First Mortgage Bonds or
Pledged Substituted Mortgage Bonds have been obtained and are not withdrawn
(except that no statement need be made with respect to state securities laws);
and
(J) if applicable, that the First Mortgage or the Substituted Mortgage and
all financing statements have been duly filed and recorded in all places where
such filing or recording is necessary for the perfection or preservation of the
lien of the First Mortgage or the Substituted Mortgage, and the First Mortgage
or the Substituted Mortgage constitutes a valid and perfected first lien upon
the property purported to be covered thereby, subject only to permitted
encumbrances (as defined in the First Mortgage or the Substituted Mortgage).
(3) an Officers' Certificate stating that (i) the Company is not, and upon
the authentication by the Trustee of such Notes will not be, in default under
any of the terms or covenants contained in this Indenture, (ii) all conditions
that must be met by the Company to issue Notes under this Indenture have been
met, and (iii) if applicable, the related issue of Pledged First Mortgage Bonds
or the related issue of Pledged Substituted Mortgage Bonds being delivered to
the Trustee meets the requirements of Section 4.10 or Section 4.11, as
applicable, hereof.
(d) No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of an authorized officer, and
such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder and
is entitled to the benefits of this Indenture.
(e) If all Notes having identical terms (but which may have differing
Original Issue Dates) are not to be authenticated and issued at one time, the
Company shall not be required to deliver the Company Order, Board Resolutions,
Pledged First Mortgage Bonds or Pledged Substituted Mortgage Bonds, if
applicable, Officers' Certificate and Opinion of Counsel (including any such
that would be otherwise
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required pursuant to Section 15.05 hereof) described in Section 2.05(c) hereof
at or prior to the authentication of each such Note, if such items are delivered
at or prior to the time of authentication of the first such Note to be
authenticated and issued. If all of such Notes are not authenticated and issued
at one time, for each issuance of Notes after the initial issuance of Notes, the
Company shall be required only to deliver to the Trustee such Notes and a
written request (executed by one of the Chairman, the President, any Vice
President, the Treasurer, or an Assistant Treasurer, and by the Secretary or an
Assistant Secretary of the Company) to the Trustee to authenticate such Notes
and to deliver such Notes in accordance with the instructions specified by such
request. Any such request shall constitute a representation and warranty by the
Company that the statements made in the Officers' Certificate delivered to the
Trustee prior to the authentication and issuance of the first such Note are true
and correct on the date thereof as if made on and as of the date thereof.
SECTION 2.06 EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES
(a) Subject to Section 2.13 hereof, Notes may be exchanged for one or more
new Notes of any authorized denominations and of a like aggregate principal
amount, series and stated maturity and having the same terms and Original Issue
Date or Dates. Notes to be exchanged shall be surrendered at any of the offices
or agencies to be maintained pursuant to Section 6.02 hereof and the Trustee
shall deliver in exchange therefor the Note or Notes which the Noteholder making
the exchange shall be entitled to receive.
(b) The Company hereby appoints the Trustee registrar for the Notes. The
Trustee shall keep, at one of said offices or agencies, a register or registers
in which, subject to such reasonable regulations as it may prescribe, the
Trustee shall register or cause to be registered Notes and shall register or
cause to be registered the transfer of Notes as in this Article Two provided.
Such register shall be in written form or in any other form capable of being
converted into written form within a reasonable time. At all reasonable times,
such register shall be open for inspection by the Company. Upon due presentment
for registration of transfer of any Note at any such office or agency, the
Company shall execute and the Trustee shall register, authenticate and deliver
in the name of the transferee or transferees one or more new Notes of any
authorized denominations and of a like aggregate principal amount, series and
stated maturity and having the same terms and Original Issue Date or Dates.
(c) All Notes presented for registration of transfer or for exchange,
redemption or payment shall be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company and
the
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Trustee and duly executed by the Holder or the attorney in fact of such Holder
duly authorized in writing.
(d) No service charge shall be made for any exchange or registration of
transfer of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith.
(e) The Trustee shall not be required to exchange or register a transfer of
any Notes selected, called or being called for redemption (including Notes, if
any, redeemable at the option of the Holder, provided such Notes are then
redeemable at such Holder's option), except, in the case of any Note to be
redeemed in part, the portion thereof not to be so redeemed.
(f) If the principal amount, and applicable premium, if any, of part, but
not all, of a Global Note is paid, then upon surrender to the Trustee of such
Global Note, the Company shall execute, and the Trustee shall authenticate,
deliver and register, a Global Note in an authorized denomination in aggregate
principal amount equal to, and having the same terms, Original Issue Date or
Dates and series as, the unpaid portion of such Global Note.
SECTION 2.07 MUTILATED, DESTROYED, LOST OR STOLEN NOTES
(a) If any temporary or definitive Note shall become mutilated or be
destroyed, lost or stolen, the Company shall execute, and upon its request the
Trustee shall authenticate and deliver, a new Note of like form and principal
amount and having the same terms and Original Issue Date or Dates and bearing a
number not contemporaneously outstanding, in exchange and substitution for the
mutilated Note, or in lieu of and in substitution for the Note so destroyed,
lost or stolen. In every case the applicant for a substituted Note shall
furnish to the Company, the Trustee and any paying agent or Authenticating Agent
such security or indemnity as may be required by them to save each of them
harmless, and, in every case of destruction, loss or theft of a Note, the
applicant shall also furnish to the Company and to the Trustee evidence to their
satisfaction of the destruction, loss or theft of such Note and of the ownership
thereof.
(b) The Trustee shall authenticate any such substituted Note and deliver
the same upon the written request or authorization of any officer of the
Company. Upon the issuance of any substituted Note, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses connected therewith.
If any Note which has matured, is about to mature, has been redeemed or called
for redemption shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a
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substituted Note, pay or authorize the payment of the same (without surrender
thereof except in the case of a mutilated Note) if the applicant for such
payment shall furnish to the Company, the Trustee and any paying agent or
Authenticating Agent such security or indemnity as may be required by them to
save each of them harmless and, in case of destruction, loss or theft, evidence
satisfactory to the Company and the Trustee of the destruction, loss or theft of
such Note and of the ownership thereof.
(c) Every substituted Note issued pursuant to this Section 2.07 by virtue
of the fact that any Note is mutilated, destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
such destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Notes duly issued hereunder. All Notes shall be held and
owned upon the express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes and shall preclude any and all other
rights or remedies notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.08 TEMPORARY NOTES
Pending the preparation of definitive Notes, the Company may execute and
the Trustee shall authenticate and deliver temporary Notes (printed,
lithographed or otherwise reproduced). Temporary Notes shall be issuable in any
authorized denomination and substantially in the form of the definitive Notes
but with such omissions, insertions and variations as may be appropriate for
temporary Notes, all as may be determined by the Company. Every such temporary
Note shall be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with the same effect, as the definitive
Notes. Without unreasonable delay the Company shall execute and shall deliver
to the Trustee definitive Notes and thereupon any or all temporary Notes shall
be surrendered in exchange therefor at the corporate trust office of the
Trustee, and the Trustee shall authenticate, deliver and register in exchange
for such temporary Notes an equal aggregate principal amount of definitive
Notes. Such exchange shall be made by the Company at its own expense and
without any charge therefor to the Noteholders. Until so exchanged, the
temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as definitive Notes authenticated and delivered hereunder.
SECTION 2.09 CANCELLATION OF NOTES PAID, ETC.
All Notes surrendered for the purpose of payment, redemption, exchange or
registration of transfer shall be surrendered to the Trustee for cancellation
and
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promptly canceled by it and no Notes shall be issued in lieu thereof except as
expressly permitted by this Indenture. The Company's acquisition of any Notes
shall operate as a redemption or satisfaction of the indebtedness represented by
such Notes and such Notes shall be surrendered by the Company to and canceled by
the Trustee.
SECTION 2.10 INTEREST RIGHTS PRESERVED
Each Note delivered under this Indenture upon transfer of or in exchange
for or in lieu of any other Note shall carry all the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Note, and each such
Note shall be so dated that neither gain nor loss of interest shall result from
such transfer, exchange or substitution.
SECTION 2.11 SPECIAL RECORD DATE
If and to the extent that the Company fails to make timely payment or
provision for timely payment of interest on any issue of Notes (other than on an
Interest Payment Date that is a maturity date), that interest shall cease to be
payable to the Persons who were the Noteholders of such issue at the applicable
Regular Record Date. In that event, when moneys become available for payment of
that interest, the Trustee shall (a) establish a date of payment of such
interest and a Special Record Date for the payment of that interest, which
Special Record Date shall be not more than 15 or fewer than 10 days prior to the
date of the proposed payment and (b) mail notice of the date of payment and of
the Special Record Date not fewer than 10 days preceding the Special Record Date
to each Noteholder of such issue at the close of business on the 15th day
preceding the mailing at the address of such Noteholder, as it appears on the
register for the Notes. On the day so established by the Trustee the interest
shall be payable to the Holders of the applicable Notes at the close of business
on the Special Record Date.
SECTION 2.12 PAYMENT OF NOTES
Payment of the principal, interest and premium on all Notes shall be
payable as follows:
(a) On or before 11:00 a.m., New York City time, of the day on which
payment of principal, interest and premium, if any, is due on any Global Note
pursuant to the terms thereof, the Company shall deliver to the Trustee funds
available on such date sufficient to make such payment, by wire transfer of
immediately available funds or by instructing the Trustee to withdraw sufficient
funds from an account maintained by the Company with the Trustee or such other
method as is acceptable to the Trustee and, if applicable, the Depositary. On
or before 2:00 p.m.,
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New York City time, or such other time as shall be agreed upon between the
Trustee and, if applicable, the Depositary, of the day on which any payment of
interest is due on any Global Note (other than at maturity), the Trustee shall
pay to the Depositary such interest in same day funds. On or before 2:00 p.m.,
New York City time or such other time as shall be agreed upon between the
Trustee and the Depositary, of the day on which principal, interest payable at
maturity and premium, if any, is due on any Global Note, the Trustee shall
deposit with the Depositary the amount equal to the principal, interest payable
at maturity and premium, if any, by wire transfer into the account specified by
the Depositary.
(b) With respect to any Note that is not a Global Note, principal,
applicable premium and interest due at the maturity of the Note shall be payable
in immediately available funds when due upon presentation and surrender of such
Note at the corporate trust office of the Trustee or at the authorized office of
any paying agent. Interest on any Note that is not a Global Note (other than
interest payable at maturity) shall be paid to the Holder thereof as its name
appears on the register by check or wire transfer payable in clearinghouse
funds; provided that if the Trustee receives a written request from any Holder
of Notes, the aggregate principal amount of which having the same Interest
Payment Date equals or exceeds $10,000,000, on or before the applicable Regular
Record Date for such Interest Payment Date, interest shall be paid by wire
transfer of immediately available funds to a bank designated by such Holder in
its request or by direct deposit into the account of such Holder designated by
such Holder in its request if such account is maintained with the Trustee or any
paying agent.
(c) The Trustee shall receive the Pledged First Mortgage Bonds or Pledged
Substituted Mortgage Bonds from the Company as provided in this Indenture and
shall hold the Pledged First Mortgage Bonds or Pledged Substituted Mortgage
Bonds, and any and all sums payable thereon or with respect thereto or realized
therefrom, in trust for the benefit of the Holders of the Notes, as herein
provided. Subject to Article Eight hereof, the Company's obligations to make
payments with respect to the principal of, premium or interest on Pledged First
Mortgage Bonds or Pledged Substituted Mortgage Bonds will be fully or partially,
as the case may be, satisfied and discharged to the extent that, at the time
that any such payment shall be due, the then due principal of, premium or
interest on the related issue of Notes shall have been fully or partially paid
or there shall have been deposited with the Trustee pursuant to this Section
2.12 sufficient available funds to fully or partially pay the then due principal
of, premium, if any, or interest on such related issue of Notes.
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SECTION 2.13 NOTES ISSUABLE IN THE FORM OF A GLOBAL NOTE
(a) If the Company shall establish pursuant to Section 2.05 hereof that the
Notes of a particular series are to be issued in whole or in part in the form of
one or more Global Notes, then the Company shall execute and the Trustee shall,
in accordance with Section 2.05 hereof and the Company Order delivered to the
Trustee thereunder, authenticate and deliver such Global Note or Notes, which
(i) shall represent, shall be denominated in an amount equal to the aggregate
principal amount of, and shall have the same terms as, the outstanding Notes to
be represented by such Global Note or Notes, (ii) shall be registered in the
name of the Depositary or its nominee, (iii) shall be delivered by the Trustee
to the Depositary or pursuant to the Depositary's instruction and (iv) shall
bear a legend substantially to the following effect: "This Note is a Global Note
registered in the name of the Depositary (referred to herein) or a nominee
thereof and, unless and until it is exchanged in whole or in part for the
individual Notes represented hereby, this Global Note may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or by the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary. Unless this Global Note is presented by an
authorized representative of The Depositary Trust Company, to the trustee for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depositary Trust Company and any payment is
made to Cede & Co., any transfer, pledge or other use hereof for value or
otherwise by or to any person is wrongful since the registered owner hereof,
Cede & Co., has an interest herein" or such other legend as may be required by
the rules and regulations of the Depositary.
(b) Notwithstanding any other provision of Section 2.06 hereof or of this
Section 2.13, unless the terms of a Global Note expressly permit such Global
Note to be exchanged in whole or in part for individual Notes, a Global Note may
be transferred, in whole but not in part, only as described in the legend
thereto.
(c) (i) If at any time the Depositary for a Global Note notifies the
Company that it is unwilling or unable to continue as Depositary for such Global
Note or if at any time the Depositary for the Global Note shall no longer be
eligible or in good standing under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or other applicable statute or regulation, the
Company shall appoint a successor Depositary, with respect to such Global Note.
If a successor Depositary for such Global Note is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company's election pursuant to Section 2.05(c)(vii) hereof
shall no longer be effective with respect to the
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series of Notes evidenced by such Global Note and the Company shall execute, and
the Trustee, upon receipt of a Company Order for the authentication and delivery
of individual Notes of such series in exchange for such Global Note, shall
authenticate and deliver, individual Notes of such series of like tenor and
terms in definitive form in an aggregate principal amount equal to the amount of
the Global Note in exchange for such Global Note. The Trustee shall not be
charged with knowledge or notice of the ineligibility of a Depositary unless a
responsible officer assigned to and working in its corporate trustee
administration department shall have actual knowledge thereof.
(ii) The Company may at any time and in its sole discretion determine
that all (but not less than all) outstanding Notes of a series issued or
issuable in the form of one or more Global Notes shall no longer be represented
by such Global Note or Notes. In such event the Company shall execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
individual Notes in exchange for such Global Note, shall authenticate and
deliver individual Notes of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such Global Note or
Notes in exchange for such Global Note or Notes.
(iii) In any exchange provided for in any of the preceding two paragraphs,
the Company will execute and the Trustee will authenticate and deliver
individual Notes in definitive registered form in authorized denominations.
Upon the exchange of a Global Note for individual Notes, such Global Note shall
be canceled by the Trustee. Notes issued in exchange for a Global Note pursuant
to this Section shall be registered in such names and in such authorized
denominations as the Depositary for such Global Note, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Notes to the Depositary for delivery to
the persons in whose names such Notes are so registered, or if the Depositary
shall refuse or be unable to deliver such Notes, the Trustee shall deliver such
Notes to the persons in whose names such Notes are registered, unless otherwise
agreed upon between the Trustee and the Company, in which event the Company
shall cause the Notes to be delivered to the persons in whose names such Notes
are registered.
(d) Neither the Company, the Trustee, any Authenticating Agent nor any
paying agent shall have any responsibility or liability for any aspect of the
records relating to, or payments made on account of beneficial ownership
interests of a Global Note or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interest.
(e) Pursuant to the provisions of this subsection, at the option of the
Trustee and upon 30 days' written notice to the Depositary but not prior to the
first Interest Payment Date of the respective Global Notes, the Depositary shall
be required to
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surrender any two or more Global Notes which have identical terms, including,
without limitation, identical maturities, interest rates and redemption
provisions (but which may have differing Original Issue Dates) to the Trustee,
and the Company shall execute, and the Trustee shall authenticate and deliver
to, or at the direction of, the Depositary, a Global Note in principal amount
equal to the aggregate principal amount of, and with all terms identical to, the
Global Notes surrendered thereto and that shall indicate each applicable
Original Issue Date and the principal amount applicable to each such Original
Issue Date. The exchange contemplated in this subsection shall be consummated
at least 30 days prior to any Interest Payment Date applicable to any of the
Global Notes surrendered to the Trustee. Upon any exchange of any Global Note
with two or more Original Issue Dates, whether pursuant to this Section or
pursuant to Section 2.06 or Section 3.03 hereof, the aggregate principal amount
of the Notes with a particular Original Issue Date shall be the same before and
after such exchange, after giving effect to any retirement of Notes and the
Original Issue Dates applicable to such Notes occurring in connection with such
exchange.
ARTICLE THREE
REDEMPTION OF NOTES
SECTION 3.01 APPLICABILITY OF ARTICLE
Such of the Notes as are, by their terms, redeemable prior to their stated
maturity date at the option of the Company, may be redeemed by the Company at
such times, in such amounts and at such prices as may be specified therein and
in accordance with the provisions of this Article Three.
SECTION 3.02 NOTICE OF REDEMPTION; SELECTION OF NOTES
(a) The election of the Company to redeem any Notes shall be evidenced by a
Board Resolution or a Company Order which shall be given with notice of
redemption to the Trustee at least 45 days (or such shorter period acceptable to
the Trustee in its sole discretion) prior to the redemption date specified in
such notice.
(b) Following receipt of the Company's notice pursuant to Section 3.02(a)
hereof, notice of redemption to each Holder of Notes to be redeemed as a whole
or in part shall be given by the Trustee, at the expense of the Company, in the
manner provided in Section 15.10 hereof, no less than 30 or more than 60 days
prior to the date fixed for redemption. Any notice which is given in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the Noteholder receives the notice. In any case, failure duly to give
such notice, or any defect in such notice, to the Holder of any Note designated
for redemption as a whole
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or in part shall not affect the validity of the proceedings for the redemption
of any Note.
(c) Each such notice shall specify the date fixed for redemption, the
places of redemption and the redemption price at which such Notes are to be
redeemed, and shall state that payment of the redemption price of such Notes or
portion thereof to be redeemed will be made upon surrender of such Notes at such
places of redemption, that interest accrued to the date fixed for redemption
will be paid as specified in such notice, and that from and after such date
interest thereon shall cease to accrue. If less than all of a series of Notes
having the same terms are to be redeemed, the notice shall specify the Notes or
portions thereof to be redeemed. If any Note is to be redeemed in part only,
the notice which relates to such Note shall state the portion of the principal
amount thereof to be redeemed, and shall state that, upon surrender of such
Note, a new Note or Notes having the same terms in aggregate principal amount
equal to the unredeemed portion thereof will be issued.
(d) Unless otherwise provided by a supplemental indenture or Company Order
under Section 2.05 hereof, if less than all of a series of Notes having the same
terms are to be redeemed, the Trustee shall select pro rata or by lot, or in
such other manner as it shall deem appropriate and fair in its discretion the
particular Notes to be redeemed in whole or in part and shall thereafter
promptly notify the Company in writing of the Notes so to be redeemed. If less
than all of a series of Notes represented by a Global Note are to be redeemed,
the particular Notes or portions thereof of such series to be redeemed shall be
selected by the Depositary for such series of Notes in such manner as the
Depositary shall determine. Notes shall be redeemed only in denominations of
$1,000, provided that any remaining principal amount of a Note redeemed in part
shall be a denomination authorized under this Indenture.
(e) If at the time of the mailing of any notice of redemption the Company
shall not have irrevocably directed the Trustee to apply funds deposited with
the Trustee or held by it and available to be used for the redemption of Notes
to redeem all the Notes called for redemption, such notice, at the election of
the Company, may state that it is subject to the receipt of the redemption
moneys by the Trustee before the date fixed for redemption and that such notice
shall be of no effect unless such moneys are so received before such date.
SECTION 3.03 PAYMENT OF NOTES ON REDEMPTION; DEPOSIT OF REDEMPTION PRICE
(a) If notice of redemption for any Notes shall have been given as provided
in Section 3.02 hereof and such notice shall not contain the language permitted
at the
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Company's option under Section 3.02(e) hereof, such Notes or portions of Notes
called for redemption shall become due and payable on the date and at the places
stated in such notice at the applicable redemption price, together with interest
accrued to the date fixed for redemption of such Notes. Interest on the Notes
or portions thereof so called for redemption shall cease to accrue and such
Notes or portions thereof shall be deemed not to be entitled to any benefit
under this Indenture except to receive payment of the redemption price together
with interest accrued thereon to the date fixed for redemption. Upon
presentation and surrender of such Notes at such a place of payment in such
notice specified, such Notes or the specified portions thereof shall be paid and
redeemed at the applicable redemption price, together with interest accrued
thereon to the date fixed for redemption.
(b) If notice of redemption shall have been given as provided in Section
3.02 hereof and such notice shall contain the language permitted at the
Company's option under Section 3.02(e) hereof, such Notes or portions of Notes
called for redemption shall become due and payable on the date and at the places
stated in such notice at the applicable redemption price, together with interest
accrued to the date fixed for redemption of such Notes, and interest on the
Notes or portions thereof so called for redemption shall cease to accrue and
such Notes or portions thereof shall be deemed not to be entitled to any benefit
under this Indenture except to receive payment of the redemption price together
with interest accrued thereon to the date fixed for redemption; provided that,
in each case, the Company shall have deposited with the Trustee or a paying
agent on or prior to such redemption date an amount sufficient to pay the
redemption price together with interest accrued to the date fixed for
redemption. Upon the Company making such deposit and upon presentation and
surrender of such Notes at the place of payment in such notice specified, such
Notes or the specified portions thereof shall be paid and redeemed at the
applicable redemption price, together with interest accrued thereon to the date
fixed for redemption. If the Company shall not make such deposit on or prior to
the redemption date, the notice of redemption shall be of no force and effect
and the principal on such Notes or specified portions thereof shall continue to
bear interest as if the notice of redemption had not been given.
(c) No notice of redemption of Notes shall be mailed during the continuance
of any Event of Default, except (1) that, when notice of redemption of any Notes
has been mailed, the Company shall redeem such Notes but only if funds
sufficient for that purpose have prior to the occurrence of such Event of
Default been deposited with the Trustee or a paying agent for such purpose, and
(2) that notices of redemption of all outstanding Notes may be given during the
continuance of an Event of Default.
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(d) Upon surrender of any Note redeemed in part only, the Company shall
execute, and the Trustee shall authenticate, deliver and register, a new Note or
Notes of authorized denominations in aggregate principal amount equal to, and
having the same terms, Original Issue Date or Dates and series as, the
unredeemed portion of the Note so surrendered.
ARTICLE FOUR
PLEDGED FIRST MORTGAGE BONDS; PLEDGED
SUBSTITUTED MORTGAGE BONDS
[SECTION 4.01 DELIVERY OF INITIAL SERIES OF PLEDGED FIRST
MORTGAGE BONDS
Subject to the provisions of Section 4.10 and Article Five hereof, the
Company hereby delivers to the Trustee, in connection with the initial issuance
of the Initial Notes, Pledged First Mortgage Bonds bearing the designation
"First Mortgage Bonds, Pledged Series A due _________" in the aggregate
principal amount of $_________, fully registered in the name of the Trustee, in
trust for the benefit of the Holders from time to time of the Initial Notes as
security for any and all obligations of the Company under the Initial Notes,
including but not limited to, (1) the full and prompt payment of the principal
of and premium, if any, on the Initial Notes when and as the same shall become
due and payable in accordance with the terms and provisions of this Indenture or
the Initial Notes, either at the stated maturity thereof, upon acceleration of
the maturity thereof or upon redemption, and (2) the full and prompt payment of
any interest on the Initial Notes when and as the same shall become due and
payable in accordance with the terms and provisions of this Indenture or the
Initial Notes.]
[SECTION 4.02 RECEIPT
The Trustee acknowledges receipt of the Pledged First Mortgage Bonds
described in Section 4.01 hereof.]
SECTION 4.03 PLEDGED FIRST MORTGAGE BONDS HELD BY THE
TRUSTEE
The Trustee, as a Holder of Pledged First Mortgage Bonds, shall attend any
meeting of Bondholders under the applicable First Mortgage as to which it
receives due notice, or, at its option, shall deliver its proxy in connection
therewith. Either at such meeting, or otherwise where consent of Holders of
First Mortgage Bonds issued under the applicable First Mortgage is sought
without a meeting, the Trustee shall vote all of the Pledged] First Mortgage
Bonds held by it, or shall consent or withhold its consent with respect thereto,
as directed by the Holders of not less than a majority
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in the aggregate principal amount of the outstanding Notes; provided, however,
that the Trustee shall not be required to vote as such Holder of any particular
issue of Pledged First Mortgage Bonds in favor of, or give its consent to, any
action except upon notification by the Trustee to the Noteholders of the related
issue of Notes of such proposal and consent thereto of the Holders of not less
than a majority in aggregate principal amount of the outstanding Notes of such
issue.
SECTION 4.04 NO TRANSFER OF PLEDGED FIRST MORTGAGE BONDS;
EXCEPTION
Except as required to effect an assignment to a successor trustee under
this Indenture or pursuant to Section 4.05 or Section 4.07 hereof, the Trustee
shall not sell, assign or transfer the Pledged First Mortgage Bonds and the
Company shall issue stop transfer instructions to the Mortgage Trustee and any
transfer agent under the First Mortgage to effect compliance with this Section
4.04.
SECTION 4.05 DELIVERY TO THE COMPANY OF ALL PLEDGED FIRST
MORTGAGE BONDS
When the obligation of the Company to make payment with respect to the
principal of and premium, if any, and interest on the Pledged First Mortgage
Bonds shall be satisfied or deemed satisfied pursuant to Section 4.10 or Section
5.01(a) hereof, the Trustee shall, upon written request of the Company, deliver
to the Company all of the Pledged First Mortgage Bonds, together with such
appropriate instruments of transfer or release as may be reasonably requested by
the Company. All Pledged First Mortgage Bonds delivered to the Company in
accordance with this Section 4.05 shall be delivered by the Company to the
Mortgage Trustee for cancellation.
SECTION 4.06 FURTHER ASSURANCES
The Company, at its own expense, shall do such further lawful acts and
things, and execute and deliver such additional conveyances, assignments,
assurances, agreements and instruments, as may be necessary in order to better
assign, assure and confirm to the Trustee its interest in the Pledged First
Mortgage Bonds and for maintaining, protecting and preserving such interest.
SECTION 4.07 EXCHANGE AND SURRENDER OF PLEDGED FIRST
MORTGAGE BONDS
At any time at the written direction of the Company, the Trustee shall
surrender to the Company all or part of the Pledged First Mortgage Bonds in
exchange
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for Pledged First Mortgage Bonds equal in aggregate outstanding principal
amounts to, in different denominations than, but of the same series and with all
other terms identical to, the Pledged First Mortgage Bonds so surrendered to the
Company. In addition, at any time a Note shall cease to be entitled to any
lien, benefit or security under this Indenture pursuant to Section 5.01(b)
hereof, the Trustee shall surrender an equal principal amount of the related
issue of Pledged First Mortgage Bonds, subject to the limitations of this
Section 4.07, to the Company for cancellation. The Trustee shall, together with
such Pledged First Mortgage Bonds, deliver to the Company such appropriate
instruments of transfer or release as the Company may reasonably request. Prior
to the surrender required by this paragraph, the Trustee shall receive from the
Company, and (subject to Section 9.01 hereof) shall be fully protected in
relying upon, an Officers' Certificate stating (i) the aggregate outstanding
principal amount of the Pledged First Mortgage Bonds of the issue surrendered by
the Trustee, after giving effect to such surrender, (ii) the aggregate
outstanding principal amount of the related issue of Notes, (iii) that the
surrender of the Pledged First Mortgage Bonds will not result in any default
under this Indenture, and (iv) that any Pledged First Mortgage Bonds to be
received in exchange for the Pledged First Mortgage Bonds being surrendered
comply with the provisions of this Section.
The Company shall not be permitted to cause the surrender or exchange of
all or any part of an issue of Pledged First Mortgage Bonds contemplated in this
Section, if after such surrender or exchange, the aggregate outstanding
principal amount of the related issue of Notes would exceed the aggregate
outstanding principal amount of such issue of Pledged First Mortgage Bonds held
by the Trustee. Any Pledged First Mortgage Bonds received by the Company
pursuant to this Section 4.07 shall be delivered to the Mortgage Trustee for
cancellation.
SECTION 4.08 ACCEPTANCE OF ADDITIONAL PLEDGED FIRST
MORTGAGE BONDS
Upon the issuance of Notes hereunder (other than the Initial Notes referred
to in Section 4.01 hereof) at any time prior to the Substitution Date, the
Company shall deliver to the Trustee in trust for the benefit of the Holders of
the Notes as described in Section 4.10 hereof, and the Trustee shall accept
therefor, a related issue of Pledged First Mortgage Bonds registered in the name
of the Trustee conforming to the requirements of Section 4.09 hereof.
SECTION 4.09 TERMS OF PLEDGED FIRST MORTGAGE BONDS
Each issue of Pledged First Mortgage Bonds delivered to the Trustee
pursuant to Section 4.01 or Section 4.08 hereof shall have the same stated rate
or rates of interest (or interest calculated in the same manner), Interest
Payment Dates, stated
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maturity date and redemption provisions, and shall be in the same aggregate
principal amount, as the related issue of Notes.
SECTION 4.10 PLEDGED FIRST MORTGAGE BONDS AS SECURITY FOR
NOTES
Until the Substitution Date and subject to Article Five hereof, Pledged
First Mortgage Bonds delivered to the Trustee, in trust for the benefit of the
Holders of the related issue of Notes, shall serve as security for any and all
obligations of the Company under the related issue of Notes, including, but not
limited to (1) the full and prompt payment of the principal of and premium, if
any, on such related issue of Notes when and as the same shall become due and
payable in accordance with the terms and provisions of this Indenture or such
related issue of Notes, either at the stated maturity thereof upon acceleration
of the maturity thereof or upon redemption, and (2) the full and prompt payment
of any interest on such related issue of Notes when and as the same shall become
due and payable in accordance with the terms and provisions of this Indenture or
such related issue of Notes.
Notwithstanding anything in this Indenture to the contrary, from and after
the Substitution Date, the obligation of the Company to make payment with
respect to the principal of and premium, if any, and interest on the Pledged
First Mortgage Bonds shall be deemed satisfied and discharged as provided in the
supplemental trust indenture or indentures to the First Mortgage creating such
Pledged Mortgage Bonds and the Pledged First Mortgage Bonds shall cease to
secure in any manner Notes theretofore or subsequently issued. From and after
the Substitution Date, any conditions to the issuance of Notes that refer or
relate to Pledged First Mortgage Bonds or the First Mortgage shall be
inapplicable. Following the Substitution Date, the Company shall cause each
First Mortgage to be closed and the Company shall not issue any additional First
Mortgage Bonds or Pledged First Mortgage Bonds under either First Mortgage.
Notice of the occurrence of the Substitution Date shall be given by the Trustee
to the Holders of the Notes in the manner provided in Section 15.10 hereof not
later than 30 days after the Company notifies the Trustee of the occurrence of
the Substitution Date.
SECTION 4.11 PLEDGED SUBSTITUTED MORTGAGE BONDS
(a) The Company shall notify the Trustee not less than 90 days prior to the
Substitution Date that the Company has determined to deliver to the Trustee on
the Substitution Date Pledged Substituted Mortgage Bonds in an aggregate
principal amount equal to the aggregate principal amount of Notes outstanding on
the Substitution Date in trust for the benefit of the Holders from time to time
of the Notes issued under this Indenture as security for any and all obligations
of the Company
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under the Notes, including but not limited to, (1) the full and prompt payment
of the principal of and premium, if any, on the Notes when and as the same shall
become due and payable in accordance with the terms and provisions of this
Indenture or the Notes, either at the stated maturity thereof, upon acceleration
of the maturity thereof or upon redemption, and (2) the full and prompt payment
of any interest on the Notes when and as the same shall become due and payable
in accordance with the terms and provisions of this Indenture or the Notes.
(b) The Pledged Substituted Mortgage Bonds to be delivered pursuant to the
notice described in Section 4.11(a) shall be delivered in separate series and
issues corresponding to the series and issues of Notes outstanding on the
Substitution Date, each issue of Pledged Substituted Mortgage Bonds having the
same stated rate or rates of interest (or interest calculated in the same
manner), Interest Payment Dates, stated maturity date and redemption provisions,
and in the same aggregate principal amount, as the related issue of Notes
outstanding on the Substitution Date.
(c) The notice described in Section 4.11(a), shall also state that on the
Substitution Date the Company shall deliver to the Trustee a supplemental
indenture to this Indenture that will provide, among other things, that upon the
issuance of Notes hereunder on or after the Substitution Date, the Company shall
deliver to the Trustee in trust for the benefit of the Holders as described in
Section 4.11(a) hereof, and the Trustee shall accept therefor, a related issue
of Pledged Substituted Mortgage Bonds registered in the name of the Trustee and
conforming to the requirements therein specified.
(d) The determination whether to deliver Pledged Substituted Mortgage Bonds
shall be made in the Company's sole discretion and without any obligation to do
so.
(e) In the event that the Company does not deliver the notice described in
Section 4.11(a), the Notes outstanding on the Substitution Date shall, as of the
Substitution Date, no longer be entitled to the benefit of the pledge of the
Pledged Mortgage Bonds and shall thereafter be general unsecured obligations of
the Company.
ARTICLE FIVE
SATISFACTION AND DISCHARGE; UNCLAIMED MONEYS
SECTION 5.01 SATISFACTION AND DISCHARGE
(a) If at any time:
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(1) the Company shall have paid or caused to be paid the principal of and
premium, if any, and interest on all the outstanding Notes, as and when the same
shall have become due and payable,
(2) the Company shall have delivered to the Trustee for cancellation all
outstanding Notes, or
(3) the Company shall have irrevocably deposited or caused to be
irrevocably deposited with the Trustee as trust funds the entire amount in (A)
cash, (B) U.S. Government Obligations maturing as to principal and interest in
such amounts and at such times as will insure the availability of cash, or (C) a
combination of cash and U.S. Government Obligations, in any case sufficient,
without reinvestment, as certified by an independent public accounting firm of
national reputation in a written certification delivered to the Trustee, to pay
at maturity or the applicable redemption date (provided that notice of
redemption shall have been duly given or irrevocable provision satisfactory to
the Trustee shall have been duly made for the giving of any notice of
redemption) all outstanding Notes, including principal and any premium and
interest due or to become due to such date of maturity, as the case may be,
and if, in any such case, the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company, then this Indenture shall cease to
be of further effect (except as to (i) rights of registration of transfer and
exchange of Notes, (ii) substitution of mutilated, defaced, destroyed, lost or
stolen Notes, (iii) rights of Noteholders to receive payments of principal
thereof and any premium and interest thereon, upon the original stated due dates
therefor or upon the applicable redemption date (but not upon acceleration of
maturity) from the moneys and U.S. Government Obligations held by the Trustee
pursuant to Section 5.02 hereof, (iv) the rights and immunities of the Trustee
hereunder, (v) the rights of the Holders of Notes as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of
them, (vi) the obligations and rights of the Trustee and the Company under
Section 5.04 hereof, and (vii) the duties of the Trustee with respect to any of
the foregoing), and the Company shall be deemed to have paid and discharged the
entire indebtedness represented by, and its obligations under, the Notes, and
the Trustee, on demand of the Company and at the cost and expense of the
Company, shall execute proper instruments acknowledging such satisfaction of and
discharging this Indenture and the Trustee shall at the request of the Company
return to the Company all Pledged First Mortgage Bonds and all Pledged
Substituted Mortgage Bonds and all other property and money held by it under
this Indenture and determined by it from time to time in accordance with the
certification pursuant to this Section 5.01(a)(3) to be in excess of the amount
required to be held under this Section.
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If the Notes are deemed to be paid and discharged pursuant to this Section
5.01(a)(3) within 15 days after those Notes are so deemed to be paid and
discharged, the Trustee shall cause a written notice to be given to each Holder
in the manner provided by Section 15.10 hereof. The notice shall:
(i) state that the Notes are deemed to be paid and discharged;
(ii) set forth a description of any U.S. Government Obligations and cash
held by the Trustee as described above;
(iii) if any Notes will be called for redemption, specify the date or
dates on which those Notes are to be called for redemption.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 9.06 hereof shall
survive.
If the Notes are deemed paid and discharged pursuant to this Section 5.01,
the obligation of the Company to make payment with respect to the principal of
and premium, if any, and interest on the related issue of Pledged First Mortgage
Bonds or the related issue of Pledged Substituted Mortgage Bonds shall be
satisfied and discharged and the related issue of Pledged First Mortgage Bonds
or the related issue of Pledged Substituted Mortgage Bonds shall cease to secure
the Notes in any manner.
(b) If at any time:
(1) the Company shall have paid or caused to be paid the principal of
and premium, if any, and interest on any Note, as and when the same shall have
become due and payable,
(2) the Company shall have delivered to the Trustee for cancellation any
outstanding Note, or
(3) the Company shall have irrevocably deposited or caused to be
irrevocably deposited with the Trustee as trust funds the entire amount in (A)
cash, (B) U.S. Government Obligations maturing as to principal and interest in
such amounts and at such times as will insure the availability of cash, or (C) a
combination of cash and U.S. Government Obligations, in any case sufficient,
without reinvestment, as certified by an independent public accounting firm of
national reputation in a written certification delivered to the Trustee, to pay
at maturity or the applicable redemption date (provided that notice of
redemption shall have been duly given or irrevocable provision satisfactory to
the Trustee shall have been duly made for the giving of any notice of
redemption) any outstanding Note, including principal
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and any premium and interest due or to become due to such date of maturity, as
the case may be,
such Note shall cease to be entitled to any lien, benefit or security under this
Indenture. Upon a Note ceasing to be entitled to any lien, benefit or security
under this Indenture, the obligation of the Company to make payment with respect
to principal of and premium, if any, and interest on a principal amount of the
related issue of Pledged First Mortgage Bonds or the related issue of Pledged
Substituted Mortgage Bonds equal to the principal amount of such Note shall be
satisfied and discharged and such portion of the principal amount of such
Pledged First Mortgage Bonds or Pledged Substituted Mortgage Bonds shall cease
to secure the Notes in any manner.
SECTION 5.02 DEPOSITED MONEYS TO BE HELD IN TRUST BY
TRUSTEE
All moneys and U.S. Government Obligations deposited with the Trustee
pursuant to Section 5.01 hereof shall be held in trust and applied by it to the
payment, either directly or through any paying agent (including the Company if
acting as its own paying agent), to the Holders of the particular Notes for the
payment or redemption of which such moneys and U.S. Government Obligations have
been deposited with the Trustee of all sums due and to become due thereon for
principal and premium, if any, and interest.
SECTION 5.03 PAYING AGENT TO REPAY MONEYS HELD
Upon the satisfaction and discharge of this Indenture all moneys then held
by any paying agent for the Notes (other than the Trustee) shall, upon written
demand by an Authorized Agent, be repaid to the Company or paid to the Trustee,
and thereupon such paying agent shall be released from all further liability
with respect to such moneys.
SECTION 5.04 RETURN OF UNCLAIMED MONEYS
Any moneys deposited with or paid to the Trustee for payment of the
principal of or any premium or interest on any Notes and not applied but
remaining unclaimed by the Holders of such Notes for one year after the date
upon which the principal of or any premium or interest on such Notes, as the
case may be, shall have become due and payable, shall be repaid to the Company
by the Trustee on written demand by an Authorized Agent, and all liability of
the Trustee shall thereupon cease; and any Holder of any of such Notes shall
thereafter look only to the Company for any payment which such Holder may be
entitled to collect.
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ARTICLE SIX
PARTICULAR COVENANTS OF THE COMPANY
SECTION 6.01 PAYMENT OF PRINCIPAL PREMIUM AND INTEREST
The Company covenants and agrees for the benefit of the Holders of the
Notes that it will duly and punctually pay or cause to be paid the principal of
and any premium and interest on each of the Notes at the places, at the
respective times and in the manner provided in such Notes or in this Indenture.
SECTION 6.02 OFFICE FOR NOTICES AND PAYMENTS, ETC.
So long as any of the Notes remain outstanding, the Company at its option
may cause to be maintained in the Borough of Manhattan, The City of New York, or
elsewhere, an office or agency where the Notes may be presented for registration
of transfer and for exchange as in this Indenture provided, and where, at any
time when the Company is obligated to make a payment of principal and premium
upon Notes, the Notes may be surrendered for payment, and may maintain at any
such office or agency and at its principal office an office or agency where
notices and demands to or upon the Company in respect of the Notes or of this
Indenture may be served. The designation of any such office or agency shall be
made by Company Order pursuant to Section 2.05 hereof or at any subsequent time
pursuant to this Section 6.02. The Company will give to the Trustee written
notice of the location of each such office or agency and of any change of
location thereof. If the Company shall fail to give such notice of the location
or of any change in the location of any such office or agency, presentations may
be made and notices and demands may be served at the corporate trust office of
the Trustee.
SECTION 6.03 APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S
OFFICE
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 9.11 hereof, a Trustee
so that there shall at all times be a Trustee hereunder.
SECTION 6.04 PROVISION AS TO PAYING AGENT
The Trustee shall be the paying agent for the Notes and, at the option of
the Company, the Company may appoint additional paying agents (including without
limitation itself). Whenever the Company shall appoint an additional paying
agent, it
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shall cause such paying agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee, subject to this
Section 6.04:
(1) that it will hold in trust for the benefit of the Holders and the
Trustee all sums held by it as such agent for the payment of the principal of
and any premium or interest on the Notes (whether such sums have been paid to it
by the Company or by any other obligor on such Notes) in trust for the benefit
of the Holders of such Notes;
(2) that it will give to the Trustee notice of any failure by the Company
(or by any other obligor on such Notes) to make any payment of the principal of
and any premium or interest on such Notes when the same shall be due and
payable; and
(3) that it will at any time during the continuance of any such failure,
upon the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such paying agent.
If the Company shall act as its own paying agent with respect to any Notes,
it will, on or before each due date of the principal of and any premium or
interest on such Notes, set aside, segregate and hold in trust for the benefit
of the Holders of such Notes a sum sufficient to pay such principal and any
premium or interest so becoming due and will notify the Trustee of any failure
by it to take such action and of any failure by the Company (or by any other
obligor on such Notes) to make any payment of the principal of and any premium
or interest on such Notes when the same shall become due and payable.
Whenever the Company shall have one or more paying agents, it will, on or
prior to each due date of the principal of (and premium, if any) or interest, if
any, on any Notes, deposit with such paying agent a sum sufficient to pay the
principal (and premium, if any) or interest, if any, so becoming due, such sum
to be held in trust for the benefit of the Persons entitled to such principal,
premium or interest, if any, and (unless such paying agent is the Trustee) the
Company shall promptly notify the Trustee of any failure on its part to so act.
Anything in this Section 6.04 to the contrary notwithstanding, the Company
may, at any time, for the purpose of obtaining a satisfaction and discharge of
this Indenture, or for any other reason, pay or cause to be paid to the Trustee
all sums held in trust by it or any paying agent hereunder, as required by this
Section 6.04, such sums to be held by the Trustee upon the trusts herein
contained.
Anything in this Section 6.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 6.04 is subject to
Sections 5.03 and 5.04 hereof.
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SECTION 6.05 OPINIONS OF COUNSEL
The Company will cause this Indenture, any indentures supplemental to this
Indenture, and any financing or continuation statements to be promptly recorded
and filed and rerecorded and refiled in such manner and in such places, as may
be required by law in order fully to preserve, protect and perfect the security
of the Noteholders and all rights of the Trustee, and shall deliver to the
Trustee:
(a) promptly after the execution and delivery of this Indenture and of any
indenture supplemental to this Indenture, an Opinion of Counsel either stating
that, in the opinion of such counsel, this Indenture or such supplemental
indenture and any financing or continuation statements have been properly
recorded and filed so as to make effective and to perfect the interest of the
Trustee intended to be created by this Indenture for the benefit of the Holders
from time to time of the Notes in the Pledged First Mortgage Bonds or the
Pledged Substituted Mortgage Bonds, and reciting the details of such action, or
stating that, in the opinion of such counsel, no such action is necessary to
perfect or make such interest effective and stating what, if any, action of the
foregoing character may reasonably be expected to become necessary prior to the
next succeeding May 1 to maintain, perfect and make such interest effective; and
(b) on or before May 1 of each year, beginning in 1998, and prior to the
Substitution Date, an Opinion of Counsel either stating that in the opinion of
such counsel such action has been taken, since the date of the most recent
Opinion of Counsel furnished pursuant to this Section 6.05(b) or the first
Opinion of Counsel furnished pursuant to Section 6.05(a) hereof, with respect to
the recording, filing, rerecording, or refiling of this Indenture, each
supplemental indenture and any financing or continuation statements, as is
necessary to maintain and perfect the interest of the Trustee intended to be
created by this Indenture for the benefit of the Holders from time to time of
the Notes in the Pledged First Mortgage Bonds or the Pledged Substituted
Mortgage Bonds, and reciting the details of such action, or stating that in the
opinion of such counsel no such action is necessary to maintain and perfect such
interest and stating what, if any, action of the foregoing character may
reasonably be expected to become necessary prior to the next succeeding May 1 to
maintain, perfect and make such security interest effective.
SECTION 6.06 CERTIFICATES AND NOTICE TO TRUSTEE
The Company shall, on or before May 1 of each year, beginning in 1998,
deliver to the Trustee a certificate from its principal executive officer,
principal financial officer or principal accounting officer covering the
preceding calendar year and stating whether or not, to the knowledge of such
party, the Company has complied with all conditions and covenants under this
Indenture, and, if not,
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describing in reasonable detail any failure by the Company to comply with any
such conditions or covenants. For purposes of this Section, compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture.
SECTION 6.07 NEGATIVE COVENANTS
(a) The Company will not issue any additional series of first mortgage
bonds under either First Mortgage, other than Pledged First Mortgage Bonds.
(b) On and after the Substitution Date, if and only if no Pledged
Substituted Mortgage Bonds have been delivered to the Trustee, the Company will
not create, assume, incur or suffer to exist any Mortgage upon any Principal
Property, whether owned or leased on the Substitution Date or thereafter
acquired, to secure any Debt of the Company or any other Person (other than the
Notes), without in any such case making effective provision whereby all of the
Notes outstanding hereunder (other than such Notes, if any, which shall by their
terms be expressly excluded from the operation of this Section 6.07) shall be
directly secured equally and ratably with such Debt, excluding, however, from
the operation of the foregoing provisions:
(i) any Mortgage upon property existing at the time of acquisition
thereof (but excluding any extension thereof or addition thereto unless the
terms of the Mortgage as of the date of the acquisition of such property provide
that such Mortgage shall be secured by such extensions or additions);
(ii) any Mortgage to secure the payment of all or any part of the
purchase price of property or to secure any Debt incurred prior to, at the time
of or within 180 days after the acquisition of such property for the purpose of
financing all or any part of the purchase price thereof;
(iii) any Mortgage secured by property used in the generation of
electricity;
(iv) any Mortgage existing at the date of this Indenture;
(v) any Permitted Encumbrance; and
(vi) any extension, renewal of replacement (or successive
extensions, renewals or replacements) in whole or in part of any Mortgage
referred to in any of the foregoing clauses (i) to (v), inclusive; provided,
--------
however, that the principal amount of Debt secured thereby shall not exceed the
- -------
principal amount of Debt (plus any premium or fee payable in connection with
such extension, renewal or replacement) so secured at the time of such
extension, renewal or replacement; and
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provided, further, that such Mortgage shall be limited to all or such part of
- -------- -------
the property which was subject to the Mortgage so extended, renewed or replaced
(plus improvements on such property).
Notwithstanding the foregoing provisions of this Section 6.07(b), the
Company may create, assume, incur or suffer to exist any Mortgage upon any
Principal Property which is not excepted by any of clauses (i) through (vi)
above without equally and ratably securing the Notes, provided that the
aggregate amount of all Debt then outstanding secured by such Mortgage and all
similar Mortgages, together with all net sale proceeds from Sale-Leaseback
Transactions (as defined in Section 6.07(c)) which are not permitted pursuant to
clauses (i) or (ii) of Section 6.07(c), does not exceed 15% of the total
consolidated capitalization of the Company as shown on the audited consolidated
balance sheet contained in the latest annual report to shareholders of the
Company. For the purposes of this Section 6.07(b), any Mortgage in favor of the
United States of America or any States thereof, or any other country, or any
political subdivision of any of the foregoing, to secure partial, progress,
advance or other payments pursuant to the provisions of any contract or statute,
or any Mortgage securing industrial development, pollution control or similar
revenue bonds shall not be deemed to create a Mortgage to secure any Debt.
(c) On and after the Substitution Date, if and only if no Pledged
Substituted Mortgage Bonds have been delivered to the Trustee, the Company will
not sell or transfer any Principal Property, with the Company taking back a
lease of such Principal Property (a "Sale-Leaseback Transaction"), unless (i)
such Sale-Leaseback Transaction occurs within 180 days from the date of
acquisition of such Principal Property or the date of the completion of
construction or commencement of full operations on such Principal Property,
whichever is later, or (ii) the Company, within 120 days after such Sale-
Leaseback Transaction, applies or causes to be applied to the retirement of Debt
of the Company (other than Debt of the Company which by its terms or the terms
of the instrument pursuant to which it was issued is subordinate in right of
payment to the Notes) an amount not less than the net proceeds of the sale of
such Principal Property.
Notwithstanding the foregoing provisions of this Section 6.07(c), the
Company may effect any Sale-Leaseback Transaction involving any Principal
Property, provided that the net sale proceeds from such Sale-Leaseback
Transaction, together with all other Sale-Leaseback Transactions which are not
permitted pursuant to clauses (i) or (ii) of the foregoing paragraph and all
Debt secured by Mortgages not specifically excluded pursuant to any of clauses
(i) through (vi) of Section 6.07(b) from the operation of Section 6.07(b), does
not exceed 15% of the total capitalization of the Company as shown on the
audited consolidated balance sheet contained in the
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latest Annual Report on Form 10-K filed with the SEC. The provisions of this
Section 6.07(c) shall also not prevent any Sale-Leaseback Transaction involving
a lease for a period, including renewals, of not more than 36 months.
ARTICLE SEVEN
NOTEHOLDER LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 7.01 NOTEHOLDER LISTS
(a) The Company shall furnish or cause to be furnished to the Trustee
semiannually, not later than 15 days after each Regular Record Date for each
Interest Payment Date that is not a maturity date and at such other times as
such Trustee may request in writing, within 30 days after receipt by the Company
of any such request, a list in such form as the Trustee may reasonably require
containing all the information in the possession or control of the Company, or
any paying agents other than the Trustee, as to the names and addresses of the
Holders of Notes, obtained since the date as of which the next previous list, if
any, was furnished. Any such list may be dated as of a date not more than 15
days prior to the time such information is furnished or caused to be furnished
and need not include information received after such date; provided that as long
as the Trustee is the registrar for the Notes, no such list shall be required to
be furnished. The Trustee shall preserve any list provided to it pursuant to
this Section until such time as the Company or any paying agent, as applicable,
shall provide it with a more recent list.
(b) Within five Business Days after the receipt by the Trustee of a written
application by any three or more Holders stating that the applicants desire to
communicate with other Holders with respect to their rights under the Indenture
or under the Notes, and accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, and by reasonable proof
that each such applicant has owned a Note for a period of at least six months
preceding the date of such application, the Trustee shall, at its election,
either:
(i) afford to such applicants access to all information furnished to or
received by the Trustee pursuant to Section 7.01(a) hereof or, if applicable, in
its capacity as registrar for the Notes; or
(ii) inform such applicants as to the approximate number of Holders
according to the most recent information furnished to or received by the Trustee
under Section 7.01(a) hereof or if applicable in its capacity as registrar for
the Notes, and as
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to the approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of Notes a copy of the form of proxy or other communication
which is specified in such request, with reasonable promptness after a tender to
the Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of such mailing, unless within five days
after such tender the Trustee shall mail to such applicants and file with the
SEC, together with a copy of the material to be mailed, a written statement to
the effect that, in the opinion of the Trustee, such mailing would be contrary
to the best interests of the Holders or would be in violation of applicable law.
Such written statement shall specify the basis of such opinion. If the SEC,
after opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or after the entry of an order sustaining one or more of such
objections, the SEC shall find, after notice and opportunity for hearing, that
all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all Holders with
reasonable promptness after the entry of such order and the renewal of such
tender; otherwise the Trustee shall be relieved of any obligation or duty to
such applicants respecting their application.
(c) Every Holder of a Note, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
paying agent nor any Authenticating Agent shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with this Section, regardless of the source from which
such information was derived, and that the Trustee shall not be held accountable
by reason of mailing any material pursuant to a request made under this Section.
SECTION 7.02 SECURITIES AND EXCHANGE COMMISSION REPORTS
The Company shall:
(a) file with the Trustee, within 15 days after the Company is required to
file the same with the SEC, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the SEC may from time to time by rules and regulations prescribe) which the
Company may be required to file with the SEC pursuant to Section 13 or Section
15(d) of the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of said Sections, then it
will file with the Trustee and the
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SEC, in accordance with rules and regulations prescribed from time to time by
the SEC, such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the Exchange Act in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(b) file with the Trustee and the SEC, in accordance with rules and
regulations prescribed from time to time by the SEC, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations, including, in the case of annual reports,
if required by such rules and regulations, certificates or opinions of
independent public accountants, conforming to the requirements of Section 15.05
hereof, as to compliance with conditions or covenants, compliance with which is
subject to verification by accountants; and
(c) transmit by mail to all Holders, as their names and addresses appear in
the register, within 30 days after the filing thereof with the Trustee, such
summaries of any information, documents and reports required to be filed by the
Company pursuant to paragraphs (a) and (b) of this Section as may be required by
rules and regulations prescribed from time to time by the SEC.
SECTION 7.03 REPORTS BY THE TRUSTEE
(a) Within 60 days after May 15 of each year, beginning with the May 15
after the first issuance of Notes hereunder, the Trustee shall transmit by mail
a brief report dated as of such date that complies with Section 313(a) of the
TIA (to the extent required by such Section).
(b) The Trustee shall from time to time transmit by mail brief reports that
comply, both in content and date of delivery, with Section 313(b) of the TIA (to
the extent required by such Section).
(c) A copy of each such report filed pursuant to this section shall, at the
time of such transmission to such Holders, be filed by the Trustee with each
stock exchange upon which any Notes are listed and also with the SEC. The
Company will notify the Trustee promptly upon the listing of such Notes on any
stock exchange.
(d) Reports pursuant to this Section shall be transmitted
(1) by mail to all Holders of Notes, as their names and addresses appear in
the register for the Notes;
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(2) by mail to such Holders of Notes as have, within the two years
preceding such transmission, filed their names and addresses with the Trustee
for such purpose;
(3) by mail, except in the case of reports pursuant to Section 7.03(b) and
(c) hereof, to all Holders of Notes whose names and addresses have been
furnished to or received by the Trustee pursuant to Section 7.01 hereof; and
(4) at the time such report is transmitted to the Holders of the Notes, to
each exchange on which Notes are listed and also with the SEC.
ARTICLE EIGHT
REMEDIES OF THE TRUSTEE AND
NOTEHOLDERS ON EVENTS OF DEFAULT
SECTION 8.01 EVENTS OF DEFAULT
(a) If one or more of the following Events of Default shall have occurred
and be continuing:
(1) default in the payment of any installment of interest upon any of the
Notes as and when the same shall become due and payable, and continuance of such
default for a period of 30 days;
(2) default in the payment of the principal of or premium, if any, on any
of the Notes as and when the same shall become due and payable and continuance
of such default for five days;
(3) failure on the part of the Company duly to observe or perform any other
of the covenants or agreements on the part of the Company contained in the Notes
or in this Indenture for a period of 90 days after the date on which written
notice of such failure, requiring the same to be remedied and stating that such
notice is a "Notice of Default" hereunder, shall have been given to the Company
by the Trustee by registered mail, or to the Company and the Trustee by the
Holders of at least a majority in aggregate principal amount of the Notes at the
time outstanding;
(4) prior to the Substitution Date, a default (as defined in either of the
First Mortgages under which Pledged First Mortgage Bonds are outstanding) has
occurred and is continuing, and the applicable Mortgage Trustee or Holders of at
least a majority in aggregate principal amount of the Notes at the time
outstanding shall have given written notice thereof to the Trustee;
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(5) if any Pledged Substituted Mortgage Bonds are outstanding, a default
(as defined in the Substituted Mortgage) has occurred and is continuing, and the
Mortgage Trustee or Holders of at least a majority in aggregate principal amount
of the Notes at the time outstanding shall have given written notice thereof to
the Trustee;
(6) the entry of a decree or order by a court having jurisdiction over the
Company for relief in respect of the Company under the United States Bankruptcy
Code, 11 U.S.C. (S)(S) 101-1330, as now constituted or hereafter amended (the
"Bankruptcy Code"), or any other applicable federal or state bankruptcy,
insolvency or other similar law, or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or similar official of the Company or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and the continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days; or
(7) the filing by the Company with respect to itself or its property of a
petition or answer or consent seeking relief under the Bankruptcy Code, or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or the consent by it to the institution of proceedings thereunder or to the
filing of any such petition or to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Company or of any substantial part of its property, or
the failure of the Company generally to pay its debts as such debts become due,
or the taking of corporate action by the Company to effectuate any such action;
then and in each and every such case, unless the principal of all of the Notes
shall have already become due and payable, either the Trustee or the Holders of
a majority in aggregate principal amount of the Notes then outstanding, by
notice in writing to the Company (and to the Trustee if given by Noteholders),
may declare the principal of all the Notes to be due and payable immediately and
upon any such declaration the same shall become and shall be immediately due and
payable, anything in this Indenture or in the Notes contained to the contrary
notwithstanding and, upon the Notes being declared to be due and payable, the
Trustee shall immediately file with the Mortgage Trustee a written demand for
redemption of all Pledged First Mortgage Bonds pursuant to the applicable
provisions of the First Mortgage or, if applicable, a written demand for
redemption of all Pledged Substituted Mortgage Bonds pursuant to the applicable
provisions of the Substituted Mortgage. This provision, however, is subject to
the condition that if, at any time after the principal of the Notes shall have
been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided and
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prior to the mailing to the Trustee by the Mortgage Trustee of a firm, valid and
unconditional notice to the Trustee of the acceleration of all of the first
mortgage bonds issued and outstanding under the First Mortgage or the
Substituted Mortgage, the Company shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest upon all of the Notes
and the principal of and any premium on any and all Notes which shall have
become due otherwise than by acceleration (with interest on overdue installments
of interest, to the extent that payment of such interest is enforceable under
applicable law, and on such principal and applicable premium at the rate borne
by the Notes to the date of such payment or deposit) and all sums paid or
advanced by the Trustee hereunder, the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 9.06 hereof and any and all defaults under
this Indenture, other than the non-payment of principal of and accrued interest
on Notes which shall have become due solely by acceleration of maturity, shall
have been cured or waived (including any defaults under the First Mortgage, as
evidenced by notice thereof from the Mortgage Trustee to the Trustee), then and
in every such case such payment or deposit shall cause an automatic waiver of
the Event of Default and its consequences (including, if given, the written
demand for redemption of all Pledged First Mortgage Bonds or, if applicable, all
Pledged Substituted Mortgage Bonds) and shall cause an automatic rescission and
annulment of the acceleration of the Notes; but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default, or shall
impair any right consequent thereon.
(b) If the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such rescission or annulment or for any other reason or shall have been
determined adversely to the Trustee, then and in every such case the Company and
the Trustee shall be restored respectively to their several positions and rights
hereunder, and all rights, remedies and powers of the Company and the Trustee
shall continue as though no such proceeding had been taken.
SECTION 8.02 ENFORCEMENT BY TRUSTEE
(a) If there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Notes under the
Bankruptcy Code or any other applicable law, or in case a receiver or trustee
shall have been appointed for the property of the Company or such other obligor,
or in the case of any similar judicial proceedings relative to the Company or
other obligor on the Notes, or to the creditors or property of the Company or
such other obligor, the Trustee, irrespective of whether the principal of the
Notes shall then be due and
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payable as therein expressed or by declaration or otherwise, shall be entitled
and empowered, by intervention in such proceedings or otherwise, to file and
prove a claim or claims for the whole amount of principal and any premium and
interest owing and unpaid in respect of the Notes, and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee (including,
prior to the Substitution Date, any claims of the Trustee as holder of Pledged
First Mortgage Bonds or, if applicable, on and after the Substitution Date, any
claims of the Trustee as holder of Pledged Substituted Mortgage Bonds, and
including any amounts due to the Trustee under Section 9.06 hereof) and of the
Holders of Notes allowed in such judicial proceedings relative to the Company or
any other obligor on the Notes, its or their creditors, or its or their
property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of its charges and expenses.
(b) All claims and rights of action under this Indenture, or under any of
the Notes, may be enforced by the Trustee without the possession of any of the
Notes, or the production thereof in any trial or other proceeding relative
thereto, and any such suit or proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall be for the ratable benefit of the Holders of the Notes in respect
of which such action was taken.
(c) Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or to accept or adopt on behalf of any Noteholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Noteholder in any such proceeding.
SECTION 8.03 APPLICATION OF MONEYS COLLECTED BY TRUSTEE
Any moneys collected by the Trustee with respect to any of the Notes
pursuant to this Article shall be applied in the order following, at the date or
dates fixed by the Trustee for the distribution of such moneys, upon
presentation of the several Notes, and stamping thereon the payment, if only
partially paid, and upon surrender thereof if fully paid.
FIRST: To the payment of all amounts due to the Trustee pursuant to
Section 9.06 hereof;
SECOND: If the principal of the outstanding Notes in respect of which such
moneys have been collected shall not have become due and be unpaid, to the
payment of interest on the Notes, in the order of the maturity of the
installments of such
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interest, with interest (to the extent allowed by law and to the extent that
such interest has been collected by the Trustee) upon the overdue installments
of interest at the rate borne by the Notes, such payments to be made ratably to
the persons entitled thereto, and then to the payment to the Holders entitled
thereto of the unpaid principal of and applicable premium on any of the Notes
which shall have become due (other than Notes previously called for redemption
for the payment of which moneys are held pursuant to the provisions of this
Indenture), whether at stated maturity or by redemption, in the order of their
due dates, beginning with the earliest due date, and if the amount available is
not sufficient to pay in full all Notes due on any particular date, then to the
payment thereof ratably, according to the amounts of principal and applicable
premium due on that date, to the Holders entitled thereto, without any
discrimination or privilege;
THIRD: If the principal of the outstanding Notes in respect of which such
moneys have been collected shall have become due, by declaration or otherwise,
to the payment of the whole amount then owing and unpaid upon the Notes for
principal and premium, if any, and interest thereon, with interest on the
overdue principal and any premium and (to the extent allowed by law and to the
extent that such interest has been collected by the Trustee) upon overdue
installments of interest at the rate borne by the Notes; and in case such moneys
shall be insufficient to pay in full the whole amount so due and unpaid upon the
Notes, then to the payment of such principal and any premium and interest
without preference or priority of principal and any premium over interest, or of
interest over principal and any premium or of any installment of interest over
any other installment of interest, or of any Note over any other Note, ratably
to the aggregate of such principal and premium, if any, and accrued and unpaid
interest; and
FOURTH: to the payment of the remainder, if any, to the Company or its
successors or assigns, or to whomsoever may lawfully be entitled to the same, or
as a court of competent jurisdiction may determine.
SECTION 8.04 PROCEEDINGS BY NOTEHOLDERS
(a) No Holder of any Note shall have any right by virtue of or by availing
of any provision of this Indenture to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Indenture or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
such Holder previously shall have given to the Trustee written notice of an
Event of Default with respect to such Note and of the continuance thereof, as
hereinabove provided, and unless also Noteholders of a majority in aggregate
principal amount of the Notes then outstanding affected by such Event of Default
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and
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shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby,
and the Trustee for 60 days after its receipt of such notice, request and offer
of indemnity, shall have neglected or refused to institute any such action, suit
or proceeding.
(b) Notwithstanding any other provision in this Indenture, however, the
rights of any Holder of any Note to receive payment of the principal of and any
premium and interest on such Note, on or after the respective due dates
expressed in such Note or on the applicable redemption date, or to institute
suit for the enforcement of any such payment on or after such respective dates
shall not be impaired or affected without the consent of such Holder.
SECTION 8.05 PROCEEDINGS BY TRUSTEE
In case of an Event of Default hereunder the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture,
including its rights as holder of the Pledged First Mortgage Bonds or the
Pledged Substituted Mortgage Bonds, by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any of such rights,
either by suit in equity or by action at law or by proceeding in bankruptcy or
otherwise, whether for the specific enforcement of any covenant or agreement
contained in this Indenture or in aid of the exercise of any power granted to it
under this Indenture, or to enforce any other legal or equitable right vested in
the Trustee by this Indenture or by law.
SECTION 8.06 REMEDIES CUMULATIVE AND CONTINUING
All powers and remedies given by this Article Eight to the Trustee or to
the Noteholders shall, to the extent permitted by law, be deemed cumulative and
not exclusive of any powers and remedies hereof or of any other powers and
remedies available to the Trustee or the Holders of the Notes, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any Holder of any of the Notes in exercising any right or
power accruing upon any default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such
default or an acquiescence therein; and, subject to Section 8.04 hereof, every
power and remedy given by this Article Eight or by law to the Trustee or to the
Noteholders may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Noteholders.
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SECTION 8.07 DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF
NOTEHOLDERS
The Holders of a majority in aggregate principal amount of the Notes at the
time outstanding shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee; provided, that (subject to Section
9.01 hereof) the Trustee shall have the right to decline to follow any such
direction if the Trustee being advised by counsel determines that the action or
proceeding so directed may not lawfully be taken or if the Trustee in good faith
by its board of directors or trustees, executive committee, or a trust committee
of directors or trustees or responsible officers shall determine that the action
or proceeding so directed would involve the Trustee in personal liability or
would be unduly prejudicial to the rights of Noteholders not joining in such
directions. The Holders of a majority in aggregate principal amount of the
Notes at the time outstanding may on behalf of all of the Holders of the Notes
waive any past default or Event of Default hereunder and its consequences except
a default in the payment of principal of or any premium or interest on the
Notes. Upon any such waiver the Company, the Trustee and the Holders of the
Notes shall be restored to their former positions and rights hereunder,
respectively, but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon. Whenever any
default or Event of Default hereunder shall have been waived as permitted by
this Section 8.07, said default or Event of Default shall for all purposes of
the Notes and this Indenture be deemed to have been cured and to be not
continuing.
SECTION 8.08 NOTICE OF DEFAULT
The Trustee shall within 90 days after the occurrence of a default known to
it, give to all Holders of the Notes, in the manner provided in Section 15.10
hereof, notice of such default, unless such default shall have been cured before
the giving of such notice, the term "default" for the purpose of this Section
8.08 being hereby defined to be any event which is or after notice or lapse of
time or both would become an Event of Default; provided that, except in the case
of default in the payment of the principal of or any premium or interest on any
of the Notes, or in the payment of any sinking or purchase fund installments,
the Trustee shall be protected in withholding such notice if and so long as its
board of directors or trustees, executive committee, or a trust committee of
directors or trustees or responsible officers in good faith determines that the
withholding of such notice is in the interests of the Holders of the Notes. The
Trustee shall not be charged with knowledge of any Event of Default unless a
responsible officer of the Trustee assigned to the corporate trustee department
of the Trustee shall have actual knowledge of such Event of Default.
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SECTION 8.09 UNDERTAKING TO PAY COSTS
All parties to this Indenture agree, and each Holder of any Note by
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but this
Section 8.09 shall not apply to any suit instituted by the Trustee, or to any
suit instituted by any Noteholder, or group of Noteholders, holding in the
aggregate more than 10% in principal amount of the Notes outstanding, or to any
suit instituted by any Noteholder for the enforcement of the payment of the
principal of or any premium or interest on any Note on or after the due date
expressed in such Note or the applicable redemption date.
ARTICLE NINE
CONCERNING THE TRUSTEE
SECTION 9.01 DUTIES AND RESPONSIBILITIES OF TRUSTEE
(a) The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Indenture. If an Event of Default has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(b) No provisions of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(1) prior to the occurrence of any Event of Default and after the curing
or waiving of all Events of Default which may have occurred
(A) the duties and obligations of the Trustee shall be determined solely
by the express provisions of this Indenture, and the Trustee shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this
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Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(B) in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but, in the
case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they conform to the
requirements of this Indenture as to form;
(2) the Trustee shall not be liable for any error of judgment made in good
faith by a responsible officer or officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with Section 8.07 hereof
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee under this Indenture.
SECTION 9.02 RELIANCE ON DOCUMENTS, OPINIONS, ETC.
Except as otherwise provided in Section 9.01 hereof:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, note or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof is herein specifically prescribed); and any Board
Resolution may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
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(d) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Noteholders, pursuant to this Indenture, unless such Noteholders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred by such exercise;
(e) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and after the
curing or waiving of all Events of Default, the Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, note or other paper or document, unless requested in writing to
do so by the Holders of at least a majority in principal amount of the then
outstanding Notes; provided that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by this Indenture, the
Trustee may require reasonable indemnity against such expense or liability as a
condition to so proceeding;
(g) no provision of this Indenture shall require the Trustee to extend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it; and
(h) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or through agents or attorneys;
provided that the Trustee shall not be liable for the conduct or acts of any
such agent or attorney that shall have been appointed in accordance herewith
with due care.
SECTION 9.03 NO RESPONSIBILITY FOR RECITALS, ETC.
The recitals contained herein and in the Notes (except in the certificate
of authentication) shall be taken as the statements of the Company, and the
Trustee assumes no responsibility for the correctness of the same. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Notes. The Trustee shall not be accountable for the use or application
by the Company of any Notes or the proceeds of any Notes authenticated and
delivered by the Trustee in conformity with this Indenture. The Trustee shall
not be responsible for recording or
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filing this Indenture, any supplemental indenture, or any financing or
continuation statement in any public office at any time or times.
SECTION 9.04 TRUSTEE, AUTHENTICATING AGENT, PAYING AGENT OR REGISTRAR MAY OWN
NOTES
The Trustee and any Authenticating Agent, paying agent or registrar, in its
individual or other capacity, may become the owner or pledgee of Notes with the
same rights it would have if it were not Trustee, Authenticating Agent, paying
agent or registrar.
SECTION 9.05 MONEYS TO BE HELD IN TRUST
Subject to Section 5.04 hereof all moneys received by the Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated from other funds except to
the extent required by law. The Trustee may allow and credit to the Company
interest on any money received hereunder at such rate, if any, as may be agreed
upon by the Company and the Trustee from time to time as may be permitted by
law.
SECTION 9.06 COMPENSATION AND EXPENSES OF TRUSTEE
The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, reasonable compensation (which shall not
be limited by any law in regard to the compensation of a trustee of an express
trust), and the Company shall pay or reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with this Indenture (including the reasonable compensation
and the reasonable expenses and disbursements of its counsel and agents,
including any Authenticating Agents, and of all persons not regularly in its
employ) except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify the Trustee
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Trustee and arising out of or
in connection with the acceptance or administration of this trust, including the
costs and expenses of defending itself against any claim or liability. The
obligations of the Company under this Section 9.06 to compensate the Trustee and
to pay or reimburse the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder. Such additional indebtedness
shall be secured by a lien prior to that of the Notes upon all property and
funds held or collected by the Trustee as such, except funds held in trust for
the benefit of the Holders of any particular Notes.
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SECTION 9.07 OFFICERS' CERTIFICATE AS EVIDENCE
Whenever in the administration of this Indenture, the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to the
taking, suffering or omitting of any action hereunder, such matter (unless other
evidence in respect thereof is herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee, and such Officers' Certificate, in the absence of negligence or bad
faith on the part of the Trustee, shall be full warrant to the Trustee for any
action taken, suffered or omitted by it under this Indenture in reliance
thereon.
SECTION 9.08 CONFLICTING INTEREST OF TRUSTEE
The Trustee shall be subject to and shall comply with the provisions of
Section 310 of the TIA; provided that, to the extent permitted by law, State
Street Bank and Trust Company shall not be deemed to have a conflicting interest
for purposes of Section 310(b) of the TIA because of its capacity as trustee
under the First Mortgage or the Substituted Mortgage. Nothing in this Indenture
shall be deemed to prohibit the Trustee or the Company from making any
application permitted pursuant to such section.
SECTION 9.09 EXISTENCE AND ELIGIBILITY OF TRUSTEE
There shall at all times be a Trustee hereunder which Trustee shall at all
times be a corporation organized and doing business under the laws of the United
States or any State thereof or of the District of Columbia (or a corporation or
other Person permitted to act as trustee by the SEC), subject to supervision or
examination by such bodies and authorized under such laws to exercise corporate
trust powers and having a combined capital and surplus of at least $150,000,000.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid authority, then for the purposes
of this Section 9.09, the combined capital and surplus shall be deemed to be as
set forth in its most recent report of condition so published. No obligor upon
the Notes or Person directly or indirectly controlling, controlled by, or under
common control with such obligor shall serve as Trustee. If at any time the
Trustee shall cease to be eligible in accordance with this Section 9.09, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 9.10 hereof.
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SECTION 9.10 RESIGNATION OR REMOVAL OF TRUSTEE
(a) Pursuant to the provisions of this Article, the Trustee may at any
time resign and be discharged of the trusts created by this Indenture by giving
written notice to the Company specifying the day upon which such resignation
shall take effect, and such resignation shall take effect immediately upon the
later of the appointment of a successor trustee and such day.
(b) Any Trustee may be removed at any time by an instrument or concurrent
instruments in writing filed with such Trustee and signed and acknowledged by
the Holders of a majority in principal amount of the then outstanding Notes or
by their attorneys in fact duly authorized.
(c) If at any time (1) the Trustee shall cease to be eligible in
accordance with Section 9.09 hereof and shall fail to resign after written
request therefor by the Company or by any Holder who has been a bona fide Holder
for at least six months, (2) the Trustee shall fail to comply with Section 9.08
hereof after written request therefor by the Company or any such Holder, or (3)
the Trustee shall become incapable of acting or shall be adjudged a bankrupt or
insolvent or a receiver of the Trustee or its property shall be appointed or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Trustee may be removed forthwith by an instrument or concurrent instruments in
writing filed with the Trustee and either:
(1) signed by the President, any Vice President, the Treasurer or any
Assistant Treasurer of the Company and attested by the Secretary or an Assistant
Secretary of the Company; or
(2) signed and acknowledged by the Holders of a majority in principal
amount of outstanding Notes or by their attorneys in fact duly authorized.
(d) Any resignation or removal of the Trustee shall not become effective
until acceptance of appointment by the successor Trustee as provided in Section
9.11 hereof.
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SECTION 9.11 APPOINTMENT OF SUCCESSOR TRUSTEE
(a) If at any time the Trustee shall resign or be removed, the Company
shall promptly appoint a successor Trustee.
(b) The successor Trustee shall provide written notice of its appointment
to the Holder of each Note outstanding following any such appointment.
(c) If no appointment of a successor Trustee shall be made pursuant to
Section 9.11(a) hereof within 60 days after appointment shall be required, any
Noteholder or the resigning Trustee may apply to any court of competent
jurisdiction to appoint a successor Trustee. Said court may thereupon after
such notice, if any, as such court may deem proper and prescribe, appoint a
successor Trustee.
(d) Any Trustee appointed under this Section 9.11 as a successor Trustee
shall be a bank or trust company eligible under Section 9.09 hereof and
qualified under Section 9.08 hereof.
SECTION 9.12 ACCEPTANCE BY SUCCESSOR TRUSTEE
(a) Any successor Trustee appointed as provided in Section 9.11 hereof
shall execute, acknowledge and deliver to the Company and to its predecessor
Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Trustee
herein; but nevertheless, on the written request of the Company or of the
successor Trustee, the Trustee ceasing to act shall, upon payment of any amounts
then due it pursuant to Section 9.06 hereof execute and deliver an instrument
transferring to such successor Trustee all the rights and powers of the Trustee
so ceasing to act, including all right, title and interest, if any, in the
Pledged First Mortgage Bonds or Pledged Substituted Mortgage Bonds. Upon
request of any such successor Trustee, the Company shall execute any and all
instruments in writing in order more fully and certainly to vest in and confirm
to such successor Trustee all such rights and powers. Any Trustee ceasing to
act shall, nevertheless, retain a lien upon all property or funds held or
collected by such Trustee to secure any amounts then due it pursuant to Section
9.06 hereof.
(b) No successor Trustee shall accept appointment as provided in this
Section 9.12 unless at the time of such acceptance such successor Trustee shall
be qualified under Section 9.08 hereof and eligible under Section 9.09 hereof.
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(c) Upon acceptance of appointment by a successor Trustee as provided in
this Section 9.12, the successor Trustee shall mail notice of its succession
hereunder to all Holders of Notes as the names and addresses of such Holders
appear on the registry books.
SECTION 9.13 SUCCESSION BY MERGER, ETC.
(a) Any corporation into which the Trustee may be merged or with which it
may be consolidated, or any corporation resulting from any merger or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, provided such corporation shall be otherwise qualified and eligible
under this Article.
(b) If at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor Trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor
Trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the certificates
of the Trustee shall have; provided that the right to adopt the certificate of
authentication of any predecessor Trustee or authenticate Notes in the name of
any predecessor Trustee shall apply only to its successor or successors by
merger, conversion or consolidation.
SECTION 9.14 LIMITATIONS ON RIGHTS OF TRUSTEE AS A CREDITOR
The Trustee shall be subject to, and shall comply with, the provisions of
Section 311 of the TIA.
SECTION 9.15 AUTHENTICATING AGENT
(a) There may be one or more Authenticating Agents appointed by the
Trustee with the written consent of the Company, with power to act on its behalf
and subject to the direction of the Trustee in the authentication and delivery
of Notes in connection with transfers and exchanges under Sections 2.06, 2.07,
2.08, 2.13, 3.03, and 13.04 hereof as fully to all intents and purposes as
though such Authenticating Agents had been expressly authorized by those
Sections to authenticate and deliver Notes. For all purposes of this Indenture,
the authentication and delivery of Notes by
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any Authenticating Agent pursuant to this Section 9.15 shall be deemed to be the
authentication and delivery of such Notes "by the Trustee." Any such
Authenticating Agent shall be a bank or trust company or other Person of the
character and qualifications set forth in Section 9.09 hereof.
(b) Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of such Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section 9.15, without the execution or filing of any paper or any further act on
the part of the parties hereto or such Authenticating Agent or such successor
corporation.
(c) Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any Authenticating Agent by giving written notice
of termination to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any Authenticating Agent shall cease to be eligible under this Section 9.15, the
Trustee may, with the written consent of the Company, appoint a successor
Authenticating Agent, and upon so doing shall give written notice of such
appointment to the Company and shall mail, in the manner provided in Section
15.10, notice of such appointment to the Holders of Notes.
(d) The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services.
(e) Sections 9.02, 9.03, 9.06, 9.07 and 9.09 hereof shall be applicable to
any Authenticating Agent.
ARTICLE TEN
CONCERNING THE NOTEHOLDERS
SECTION 10.01 ACTION BY NOTEHOLDERS
Whenever in this Indenture it is provided that the Holders of a specified
percentage in aggregate principal amount of the Notes may take any action, the
fact that at the time of taking any such action the Holders of such specified
percentage have joined therein may be evidenced (a) by any instrument or any
number of instruments of similar tenor executed by such Noteholders in person or
by agent or
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proxy appointed in writing, (b) by the record of such Noteholders voting in
favor thereof at any meeting of Noteholders duly called and held in accordance
with Article Eleven hereof or (c) by a combination of such instrument or
instruments and any such record of such a meeting of Noteholders.
SECTION 10.02 PROOF OF EXECUTION BY NOTEHOLDERS
(a) Subject to Sections 9.01, 9.02 and 11.05 hereof, proof of the execution
of any instruments by a Noteholder or the agent or proxy for such Noteholder
shall be sufficient if made in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The ownership of Notes shall be proved by the
register for the Notes maintained by the Trustee.
(b) The record of any Noteholders' meeting shall be proven in the manner
provided in Section 11.06 hereof.
SECTION 10.03 WHO DEEMED ABSOLUTE OWNERS
Subject to Sections 2.04(f) and 10.01 hereof, the Company, the Trustee, any
paying agent and any Authenticating Agent shall deem the person in whose name
any Note shall be registered upon the register for the Notes to be, and shall
treat such person as, the absolute owner of such Note (whether or not such Note
shall be overdue) for the purpose of receiving payment of or on account of the
principal and premium, if any, and interest on such Note, and for all other
purposes; and neither the Company nor the Trustee nor any paying agent nor any
Authenticating Agent shall be affected by any notice to the contrary. All such
payments shall be valid and effectual to satisfy and discharge the liability
upon any such Note to the extent of the sum or sums so paid.
SECTION 10.04 COMPANY-OWNED NOTES DISREGARDED
In determining whether the Holders of the requisite aggregate principal
amount of outstanding Notes have concurred in any direction, consent or waiver
under this Indenture, Notes which are owned by the Company or any other obligor
on the Notes or by any person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company or any other
obligor on the Notes shall be disregarded and deemed not to be outstanding for
the purpose of any such determination; provided that, for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Notes which the Trustee knows are so owned
shall be so disregarded. Notes so owned which have been pledged in good faith
to third parties may be regarded as outstanding
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for the purposes of this Section 10.04 if the pledgee shall establish to the
satisfaction of the Trustee the pledgee's right to take action with respect to
such Notes and that the pledgee is not a person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any such other obligor. In the case of a dispute as to such right,
any decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.
SECTION 10.05 REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND
Except as may be otherwise required in the case of a Global Note by the
applicable rules and regulations of the Depositary, at any time prior to the
taking of any action by the Holders of the percentage in aggregate principal
amount of the Notes specified in this Indenture in connection with such action,
any Holder of a Note, which has been included in the Notes the Holders of which
have consented to such action may, by filing written notice with the Trustee at
the corporate trust office of the Trustee and upon proof of ownership as
provided in Section 10.02(a) hereof, revoke such action so far as it concerns
such Note. Except as aforesaid any such action taken by the Holder of any Note
shall be conclusive and binding upon such Holder and upon all future Holders and
owners of such Note and of any Notes issued in exchange, substitution or upon
registration of transfer therefor, irrespective of whether or not any notation
thereof is made upon such Note or such other Notes.
SECTION 10.06 RECORD DATE FOR NOTEHOLDER ACTS
If the Company shall solicit from the Noteholders any request, demand,
authorization, direction, notice, consent, waiver or other act, the Company may,
at its option, by Board Resolution, fix in advance a record date for the
determination of Noteholders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other act, but the Company
shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other act
may be given before or after the record date, but only the Noteholders of record
at the close of business on the record date shall be deemed to be Noteholders
for the purpose of determining whether Holders of the requisite aggregate
principal amount of outstanding Notes have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
act, and for that purpose the outstanding Notes shall be computed as of the
record date; provided that no such request, demand, authorization, direction,
notice, consent, waiver or other act by the Noteholders on the record date shall
be deemed effective unless it shall become effective pursuant to this Indenture
not later than six months after the record date. Any such record date shall be
at least 30 days prior to the date of the solicitation to the Noteholders by the
Company.
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ARTICLE ELEVEN
NOTEHOLDERS' MEETING
SECTION 11.01 PURPOSES OF MEETINGS
A meeting of Noteholders may be called at any time and from time to time
pursuant to this Article Eleven for any of the following purposes:
(a) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to consent to the waiving of any Event of Default
hereunder and its consequences, or to take any other action authorized to be
taken by Noteholders pursuant to Article Eight;
(b) to remove the Trustee pursuant to Article Nine;
(c) to consent to the execution of an indenture or indentures supplemental
hereto pursuant to Section 13.02 hereof; or
(d) to take any other action authorized to be taken by or on behalf of the
Holders of any specified aggregate principal amount of the Notes, as the case
may be, under any other provision of this Indenture or under applicable law.
SECTION 11.02 CALL OF MEETINGS BY TRUSTEE
The Trustee may at any time call a meeting of Holders of Notes to take any
action specified in Section 11.01 hereof, to be held at such time and at such
place as the Trustee shall determine. Notice of every such meeting of
Noteholders, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given to Holders
of the Notes that may be affected by the action proposed to be taken at such
meeting in the manner provided in Section 15.10 hereof. Such notice shall be
given not less than 20 nor more than 90 days prior to the date fixed for such
meeting.
SECTION 11.03 CALL OF MEETINGS BY COMPANY OR NOTEHOLDERS
If at any time the Company, pursuant to a Board Resolution, or the Holders
of at least 10% in aggregate principal amount of the Notes then outstanding,
shall have requested the Trustee to call a meeting of Noteholders, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have mailed the notice of such meeting
within 20 days after receipt of such request, then the Company or such
Noteholders may determine the time and the place
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for such meeting and may call such meeting to take any action authorized in
Section 11.01 hereof by giving notice thereof as provided in Section 11.02
hereof.
SECTION 11.04 QUALIFICATIONS FOR VOTING
To be entitled to vote at any meetings of Noteholders a Person shall (a) be
a Holder of one or more Notes affected by the action proposed to be taken or (b)
be a Person appointed by an instrument in writing as proxy by a Holder of one or
more such Notes. The only Persons who shall be entitled to be present or to
speak at any meeting of Noteholders shall be the Persons entitled to vote at
such meeting and their counsel and any representatives (including employees) of
the Trustee and its counsel and any representatives (including employees) of the
Company and its counsel.
SECTION 11.05 REGULATIONS
(a) Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Noteholders in regard to proof of the holding of Notes and of the appointment of
proxies, and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall think fit.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by the Noteholders as provided in Section 11.03 hereof in which case
the Company or Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by the Holders of a majority in
aggregate principal amount of the Notes present in person or by proxy at the
meeting.
(c) Subject to Section 10.04 hereof, at any meeting each Noteholder or
proxy shall be entitled to one vote for each $1,000 principal amount of Notes
held or represented by such Noteholder; provided that no vote shall be cast or
counted at any meeting in respect of any Note ruled by the chairman of the
meeting to be not outstanding. The chairman of the meeting shall have no right
to vote other than by virtue of Notes held by such chairman or instruments in
writing as aforesaid duly designating such chairman as the person to vote on
behalf of other Noteholders. At any meeting of Noteholders duly called pursuant
to Section 11.02 or 11.03 hereof, the presence of persons holding or
representing Notes in an aggregate principal amount sufficient to take action on
any business for the transaction for which such meeting was called shall
constitute a quorum. Any meeting of Noteholders duly called pursuant to Section
11.02 or 11.03 hereof may be adjourned from time to time by the
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Holders of a majority in aggregate principal amount of the Notes present in
person or by proxy at the meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
SECTION 11.06 VOTING
The vote upon any resolution submitted to any meeting of Noteholders shall
be by written ballots on which shall be subscribed the signatures of the Holders
of Notes or of their representatives by proxy and the principal amount of Notes
held or represented by them. The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of such meeting of
Noteholders shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 11.02 hereof. The
record shall show the aggregate principal amount of the Notes voting in favor of
or against any resolution. The record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee and the Trustee shall have the ballots taken at the
meeting attached to such duplicate. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
SECTION 11.07 RIGHTS OF TRUSTEE OR NOTEHOLDERS NOT DELAYED
Nothing in this Article Eleven shall be deemed or construed to authorize or
permit, by reason of any call of a meeting of Noteholders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to the Holders of Notes under any of the provisions of this Indenture
or of the Notes.
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ARTICLE TWELVE
CONSOLIDATION, MERGER, SALE, TRANSFER OR OTHER DISPOSITION
SECTION 12.01 COMPANY MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS
The Company shall not consolidate with or merge into any other corporation
or sell, or otherwise of dispose all or substantially all of its assets unless
the corporation formed by such consolidation or into which the Company is merged
or the Person which receives all or substantially all of the assets pursuant to
such sale, transfer or other disposition (a) shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of
and premium and interest on all of the Notes and the performance of every
covenant of this Indenture on the part of the Company to be performed or
observed, (b) if such consolidation, merger, sale, transfer or other disposition
occurs prior to the Substitution Date, shall expressly assume, by an indenture
supplemental to the First Mortgage, executed and delivered to the Trustee and
the Mortgage Trustee, in form satisfactory to the Trustee and the Mortgage
Trustee, the due and punctual payment of the principal of, premium, if any, and
interest on all of the Pledged First Mortgage Bonds and the performance of every
covenant of the First Mortgage on the part of the Company to be performed or
observed and (c) if such consolidation, merger, sale, transfer or other
disposition occurs on and after the Substitution Date and Pledged Substituted
Mortgage Bonds are outstanding, shall expressly assume, by an indenture
supplemental to the Substituted Mortgage, executed and delivered to the Trustee
and the Mortgage Trustee, the due and punctual payment of the principal of,
premium, if any, and interest on all of the Pledged Substituted Mortgage Bonds
and the performance of every covenant of the Substituted Mortgage on the part of
the Company to be performed or observed. For purposes of this Article Twelve,
the phrase "all or substantially all of its assets" shall mean 50% or more of
the total assets of the Company as shown on the balance sheet of the Company as
of the end of the calendar year immediately preceding the day of the year in
which such determination is made and nothing in this Indenture shall prevent or
hinder the Company from selling, transferring or otherwise disposing during any
calendar year (in one transaction or a series of transactions) less than 50% of
the amount of its total assets as shown on the balance sheet of the Company as
of the end of the immediately preceding calendar year.
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SECTION 12.02 SUCCESSOR CORPORATION SUBSTITUTED
Upon any consolidation or merger, or any sale, transfer or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 12.01 hereof, the successor corporation formed by such
consolidation or into which the Company is merged or to which such sale,
transfer or other disposition is made shall succeed to, and be substituted for
and may exercise every right and power of, the Company under this Indenture with
the same effect as if such successor corporation had been named as the Company
herein and the Company shall be released from all obligations hereunder.
ARTICLE THIRTEEN
SUPPLEMENTAL INDENTURES
SECTION 13.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS
(a) The Company and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto without the consent of
any Noteholder for one or more of the following purposes:
(1) to make such provision in regard to matters or questions arising
under this Indenture as may be necessary or desirable, and not inconsistent with
this Indenture or prejudicial to the interests of the Holders, for the purpose
of supplying any omission, curing any ambiguity, or curing, correcting or
supplementing any defective or inconsistent provision;
(2) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Note outstanding created prior to the execution of such supplemental
indenture which is entitled to the benefit of such provision or such change or
elimination is applicable only to Notes issued after the effective date of such
change or elimination;
(3) to establish the form of Notes as permitted by Section 2.01 hereof
or to establish or reflect any terms of any Note determined pursuant to Section
2.05 hereof;
(4) to evidence the succession of another corporation to the Company,
and the assumption by any such successor of the covenants of the Company herein
and in the Notes;
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(5) to grant to or confer upon the Trustee for the benefit of the
Holders any additional rights, remedies, powers or authority;
(6) to permit the Trustee to comply with any duties imposed upon it by
law;
(7) to specify further the duties and responsibilities of and to
define further the relationships among the Trustee, any Authenticating Agent and
any paying agent;
(8) to add to the covenants of the Company for the benefit of the
Holders, to add to the security for the Notes or to surrender a right or power
conferred on the Company herein; and
(9) to make any other change that is not prejudicial to the Trustee or
the Holders.
(b) The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to enter into any such supplemental indenture which
adversely affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
(c) Any supplemental indenture authorized by this Section 13.01 may be
executed by the Company and the Trustee without the consent of the Holders of
any of the Notes at the time outstanding, notwithstanding any of the provisions
of Section 13.02 hereof.
SECTION 13.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS
(a) With the consent (evidenced as provided in Section 10.01 hereof) of
the Holders of a majority in aggregate principal amount of the Notes at the time
outstanding, the Company, when authorized by Board Resolution, and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the
Noteholders; provided that no such supplemental indenture shall:
(1) change the maturity date of any Note, or reduce the rate or extend
the time of payment of interest thereon, or reduce the principal amount thereof
or any
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premium thereon, or change the coin or currency in which the principal of any
Note or any premium or interest thereon is payable, or change the date on which
any Note may be redeemed or adversely affect the rights of the Noteholders to
institute suit for the enforcement of any payment of principal of or any premium
or interest on any Note, or impair the interest hereunder of the Trustee in the
Pledged First Mortgage Bonds or Pledged Substituted Mortgage Bonds, or reduce
the principal amount of any issue of Pledged First Mortgage Bonds (except, as
provided in this Indenture, upon the Substitution Date) or Pledged Substituted
Mortgage Bonds to an amount less than the principal amount of the related issue
of Notes or alter the payment provisions of such Pledged First Mortgage Bonds or
Pledged Substituted Mortgage Bonds in a manner adverse to the Holders of the
Notes, in each case without the consent of the Holder of each Note so affected;
or
(2) modify this Section 13.02(a) or reduce the aforesaid percentage of
Notes, the Holders of which are required to consent to any such supplemental
indenture or to reduce the percentage of Notes, the Holders of which are
required to waive Events of Default, in each case, without the consent of the
Holders of all of the Notes then outstanding.
(b) Upon the request of the Company, accompanied by a copy of the Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
(c) It shall not be necessary for the consent of the Holders of Notes
under this Section 13.02 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall approve
the substance thereof.
(d) Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to this Section 13.02, the Trustee shall give
notice in the manner provided in Section 15.10 hereof, setting forth in general
terms the substance of such supplemental indenture, to all Noteholders. Any
failure of the Trustee to give such notice or any defect therein shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
(e) Notwithstanding anything to the contrary in this Section 13.02, if any
proposed supplemental indenture would affect only a limited number of series or
issues of Notes, only the Holders of the Notes so affected shall be entitled to
consent to such supplemental indenture, and, subject to Sections 13.02(a)(1) and
(2), such
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supplemental indenture may be approved with the consent of the Holders of a
majority in aggregate principal amount of the Notes so affected.
SECTION 13.03 COMPLIANCE WITH TRUST INDENTURE ACT; EFFECT OF SUPPLEMENTAL
INDENTURES
Any supplemental indenture executed pursuant to this Article Thirteen shall
comply with the TIA. Upon the execution of any supplemental indenture pursuant
to this Article Thirteen, the Indenture shall be and be deemed to be modified
and amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties and immunities under this Indenture of the Trustee,
the Company and the Noteholders shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
SECTION 13.04 NOTATION ON NOTES
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article Thirteen may bear a notation in form approved
by the Trustee as to any matter provided for in such supplemental indenture. If
the Company shall so determine, new Notes so modified as approved by the Trustee
and the Board of Directors with respect to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by the
Company, authenticated by the Trustee and delivered in exchange for the Notes
then outstanding.
SECTION 13.05 EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE FURNISHED
TRUSTEE
The Trustee, subject to Sections 9.01 and 9.02 hereof, shall receive an
Officers' Certificate and an Opinion of Counsel pursuant to Section 15.05 hereof
as conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article Thirteen.
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ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
SECTION 14.01 INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS
No recourse for the payment of the principal of or any premium or interest
on any Note, any Pledged First Mortgage Bond or any Pledged Substituted Mortgage
Bond, or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company,
contained in this Indenture, the First Mortgage, the Substituted Mortgage or in
any supplemental indenture, or in any Note or in any Pledged First Mortgage Bond
or any Pledged Substituted Mortgage Bond, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Company or any successor corporation, either directly or through the Company or
any successor corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or otherwise; it
being expressly understood that all such liability is hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Indenture and the issuance of the Notes.
ARTICLE FIFTEEN
MISCELLANEOUS PROVISIONS
SECTION 15.01 PROVISIONS BINDING ON COMPANY'S SUCCESSORS
All the covenants, stipulations, promises and agreements made by the
Company in this Indenture shall bind its successors and assigns whether so
expressed or not.
SECTION 15.02 OFFICIAL ACTS BY SUCCESSOR CORPORATION
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful successor of the Company.
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SECTION 15.03 NOTICES
(a) Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the Noteholders
on the Company may be given or served by confirmed facsimile transmission, by
delivery to an overnight courier providing evidence of receipt or by being
deposited postage prepaid in a post office letter box, in each case sent or
transmitted to the facsimile number or address (until another facsimile number
or address is filed by the Company with the Trustee) of the principal executive
offices of the Company, to the attention of the Secretary or Treasurer. Any
notice, direction, request or demand by any Noteholder, the Company or the
Mortgage Trustee to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in writing, by
any type of delivery described above, at the corporate trust office of the
Trustee, Attention: Manager, Corporate Trust Department.
(b) The Company shall provide any notices required under this Indenture by
publication, but only to the extent that such publication is required by the
TIA, the rules and regulations of the SEC or any securities exchange upon which
any of the Notes are listed.
SECTION 15.04 GOVERNING LAW
This Indenture and each Note shall be deemed to be a contract made under
the laws of the State of Washington, and for all purposes shall be construed in
accordance with the laws of said State.
SECTION 15.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT
(a) Upon any application or demand by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture (including any covenants compliance with which constitutes
a condition precedent) relating to the proposed action have been complied with
and an Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture (other than the certificates delivered pursuant
to Section 6.06 hereof) shall include (1) a statement that each Person making
such certificate or opinion has read such covenant or condition and the
definitions relating thereto; (2) a brief
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statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of each such Person, such Person has
made such examination or investigation as is necessary to enable such Person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and (4) a statement as to whether or not, in the opinion of
each such Person, such condition or covenant has been complied with.
(c) In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of only one such Person,
or that they be so certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.
(d) Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel delivered under the
Indenture may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such person knows, or in the exercise of
reasonable care should know, that the certificate or opinion of representations
with respect to such matters are erroneous. Any opinion of counsel delivered
hereunder may contain standard exceptions and qualifications satisfactory to the
Trustee.
(e) Any certificate, statement or opinion of any officer of the Company, or
of counsel, may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an independent public accountant
or firm of accountants, unless such officer or counsel, as the case may be,
knows that the certificate or opinions or representations with respect to the
accounting matters upon which the certificate, statement or opinion of such
officer or counsel may be based as aforesaid are erroneous, or in the exercise
of reasonable care should know that the same are erroneous. Any certificate or
opinion of any firm of independent public accountants filed with the Trustee
shall contain a statement that such firm is independent.
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(f) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 15.06 BUSINESS DAYS
Unless otherwise provided pursuant to Section 2.05(c) hereof, in any case
where the date of maturity of the principal of or any premium or interest on any
Note or the date fixed for redemption of any Note is not a Business Day, then
payment of such principal or any premium or interest need not be made on such
date but may be made on the next succeeding Business Day with the same force and
effect as if made on the date of maturity or the date fixed for redemption, and,
in the case of timely payment thereof, no interest shall accrue for the period
from and after such Interest Payment Date or the date on which the principal of
the Note is required to be paid.
SECTION 15.07 TRUST INDENTURE ACT TO CONTROL
If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by any of Sections 310 to 317, inclusive,
of the TIA, such required provision of the TIA shall govern.
SECTION 15.08 TABLE OF CONTENTS, HEADINGS, ETC.
The table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
SECTION 15.09 EXECUTION IN COUNTERPARTS
This Indenture may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute but one
and the same instrument.
SECTION 15.10 MANNER OF MAILING NOTICE TO NOTEHOLDERS
Any notice or demand which by any provision of this Indenture is required
or permitted to be given or served by the Trustee or the Company to or on the
Holders of Notes, as the case may be, shall be given or served by confirmed
facsimile transmission, by delivery to an overnight courier providing evidence
of receipt or by first-class mail, postage prepaid, in each case sent or
transmitted to the Holders of such Notes at their last facsimile numbers or
addresses as the same appear on the
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register for the Notes referred to in Section 2.06, and any such notice shall be
deemed to be given or served by being deposited in a post office letter box (or
by any other form of delivery described above) in the form and manner provided
in this Section 15.10. In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to give notice
to any Holder by mail, then such notification to such Holder as shall be made
with the approval of the Trustee shall constitute a sufficient notification for
every purpose hereunder.
SECTION 15.11 APPROVAL BY TRUSTEE OF COUNSEL
Whenever the Trustee is required to approve counsel who is to furnish
evidence of compliance with conditions precedent in this Indenture, such
approval by the Trustee shall be deemed to have been given upon the taking of
any action by the Trustee pursuant to and in accordance with the certificate or
opinion so furnished by such counsel.
IN WITNESS WHEREOF, PUGET SOUND ENERGY, INC. has caused this Indenture to
be signed and acknowledged by one of its Vice Presidents, and attested by its
Secretary, and STATE STREET BANK AND TRUST COMPANY has caused this Indenture to
be signed and acknowledged by one of its Vice Presidents, and attested by one of
its Vice Presidents, as of the day and year first written above.
PUGET SOUND ENERGY, INC.
By______________________________________
ATTEST:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By______________________________________
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ATTEST:
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EXHIBIT A
FORM OF GLOBAL NOTE
PRIOR TO SUBSTITUTION DATE
REGISTERED REGISTERED
THIS NOTE IS A GLOBAL NOTE REGISTERED IN THE NAME OF THE DEPOSITARY
(REFERRED TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY UNLESS THIS
GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST
COMPANY (55 WATER STREET NEW YORK, NEW YORK), TO THE TRUSTEE FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO. ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
PUGET SOUND ENERGY, INC.
SENIOR NOTE, SERIES
CUSIP: NUMBER:
ORIGINAL ISSUE DATE(S): PRINCIPAL AMOUNT(S):
INTEREST RATE: MATURITY DATE:
PUGET SOUND ENERGY, INC., a corporation of the state of Washington (the
"Company"), for value received hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of
DOLLARS
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on the Maturity Date set forth above, and to pay interest thereon from the
Original Issue Date (or if this Global Note has two or more Original Issue
Dates, interest shall, beginning on each such Original Issue Date, begin to
accrue for that part of the principal amount to which that Original Issue Date
is applicable) set forth above or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semiannually in arrears on
the ____________ and ____________ in each year (each, an "Interest Payment
Date"), commencing on the first such Interest Payment Date succeeding the
applicable Original Issue Date set forth above, at the per annum Interest Rate
set forth above, until the principal hereof is paid or made available for
payment. No interest shall accrue on the Maturity Date, so long as the
principal amount of this Global Note is paid on the Maturity Date. The interest
so payable and punctually paid or duly provided for on any such Interest Payment
Date will, as provided in the Indenture, be paid to the Person in whose name
this Note is registered at the close of business on the Regular Record Date for
such interest, which shall be the ___________ or ____________, as the case may
be, next preceding such Interest Payment Date; provided that the first Interest
Payment Date for any part of this Note, the Original Issue Date of which is
after a Regular Record Date but prior to the applicable Interest Payment Date,
shall be the Interest Payment Date following the next succeeding Regular Record
Date; and provided that interest payable on the Maturity Date set forth above
or, if applicable, upon redemption or acceleration, shall be payable to the
Person to whom principal shall be payable. Except as otherwise provided in the
Indenture (as defined below), any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date and shall be paid to the Person in whose name this Note is
registered at the close of business on a Special Record Date for the payment of
such defaulted interest to be fixed by the Trustee, notice whereof shall be
given to Noteholders not more than 15 days or fewer than 10 days prior to such
Special Record Date. On or before __________, New York City time, or such other
time as shall be agreed upon between the Trustee and the Depositary, of the day
on which such payment of interest is due on this Global Note (other than
maturity), the Trustee shall pay to the Depositary such interest in same day
funds. On or before _________, New York City time, or such other time as shall
be agreed upon between the Trustee and the Depositary, of the day on which
principal, interest payable at maturity and premium, if any, is due on this
Global Note, the Trustee shall deposit with the Depositary the amount equal to
the principal, interest payable at maturity and premium, if any, by wire
transfer into the account specified by the Depositary. As a condition to the
payment, on the Maturity Date or upon redemption or acceleration, of any part of
the principal and applicable premium of this Global Note, the Depositary shall
surrender, or cause to be surrendered, this Global Note to the Trustee,
whereupon a new Global Note shall be issued to the Depositary.
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This Global Note is a global security in respect of a duly authorized issue
of Senior Notes, Series ____ (the "Notes of this Series," which term includes
any Global Notes representing such Notes) of the Company issued and to be issued
under an Indenture dated as of _____________, 1997 between the Company and State
Street Bank and Trust, Boston, Massachusetts, as trustee (the "Trustee," which
term includes any successor Trustee under the Indenture) and indentures
supplemental thereto (collectively, the "Indenture"). Under the Indenture, one
or more series of notes may be issued and, as used herein, the term "Notes"
refers to the Notes of this series and any other outstanding series of Notes.
Reference is hereby made to the Indenture for a more complete statement of the
respective rights, limitations of rights, duties and immunities under the
Indenture of the Company, the Trustee and the Noteholders and of the terms upon
which the Notes are and are to be authenticated and delivered. This Global Note
has been issued in respect of the series designated on the first page hereof
limited in aggregate principal amount to $__________.
Prior to the Substitution Date (as hereinafter defined), the Notes will be
secured by first mortgage bonds (the "Pledged First Mortgage Bonds") delivered
by the Company to the Trustee for the benefit of the Holders of the Notes,
issued under either (a) the Fortieth Supplemental Indenture, dated September 1,
1954, from the Company to State Street Bank and Trust, Boston, Massachusetts, as
successor trustee (the "Electric Mortgage Trustee"), as supplemented and amended
(the "Electric Mortgage"), or (b) the Indenture of First Mortgage, dated April
1, 1957, from the Company, as successor to Washington Natural Gas Company, to
Harris Trust and Savings Bank, Chicago, Illinois, as trustee (the "Gas Mortgage
Trustee" and, together with the Electric Mortgage Trustee, the "Mortgage
Trustee"), as supplemented and amended (the "Gas Mortgage" and, together with
the Electric Mortgage, the "First Mortgages"). Reference is made to the First
Mortgages and the Indenture for a description of the rights of the Trustee as
holder of the Pledged First Mortgage Bonds, the property mortgaged and pledged
under each of the First Mortgages, the rights of the Company and of the
applicable Mortgage Trustee in respect thereof, the duties and immunities of the
applicable Mortgage Trustee, the terms and conditions upon which the Pledged
First Mortgage Bonds are secured and the circumstances under which additional
first mortgage bonds may be issued.
FROM AND AFTER SUCH TIME AS ALL FIRST MORTGAGE BONDS (OTHER THAN PLEDGED
FIRST MORTGAGE BONDS) ISSUED UNDER EITHER OF THE FIRST MORTGAGES HAVE BEEN
RETIRED THROUGH PAYMENT, REDEMPTION OR OTHERWISE (INCLUDING THOSE FIRST MORTGAGE
BONDS THE PAYMENT FOR WHICH HAS BEEN PROVIDED FOR IN ACCORDANCE WITH THE
APPLICABLE FIRST MORTGAGE) AT, BEFORE OR AFTER THE MATURITY THEREOF (THE
"SUBSTITUTION DATE"), THE PLEDGED FIRST MORTGAGE BONDS SHALL CEASE TO SECURE THE
NOTES IN ANY MANNER, AND, AT THE OPTION OF THE COMPANY, THE NOTES EITHER (A)
WILL
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BECOME UNSECURED GENERAL OBLIGATIONS OF THE COMPANY OR (B) WILL BE SECURED BY
FIRST MORTGAGE BONDS ISSUED UNDER AN INDENTURE OTHER THAN THE FIRST MORTGAGES.
IN CERTAIN CIRCUMSTANCES PRIOR TO THE SUBSTITUTION DATE AS PROVIDED IN THE
INDENTURE, THE COMPANY IS PERMITTED TO REDUCE THE AGGREGATE PRINCIPAL AMOUNT OF
AN ISSUE OF PLEDGED FIRST MORTGAGE BONDS HELD BY THE TRUSTEE, BUT IN NO EVENT
PRIOR TO THE SUBSTITUTION DATE TO AN AMOUNT LESS THAN THE AGGREGATE PRINCIPAL
AMOUNT OF THE RELATED ISSUE OF NOTES INITIALLY ISSUED CONTEMPORANEOUSLY WITH
SUCH PLEDGED FIRST MORTGAGE BONDS.
Each Note shall be dated and issued as of the date of its authentication by
the Trustee and shall bear an Original Issue Date or Dates. Each Note or Global
Note issued upon transfer, exchange or substitution of such Note or Global Note
shall bear the Original Issue Date or Dates of such transferred, exchanged or
substituted Note or Global Note, as the case may be.
[If applicable, one of the following two sentences: This Global Note may
not be redeemed prior to ____________, _____. This Global Note is not
redeemable prior to the Maturity Date set forth on the first page hereof.] [If
applicable: On or after _______________, ____, this Global Note is redeemable
in whole or in part in increments of $1,000 (provided that any remaining
principal amount of this Global Note shall be at least $100,000) at the option
of the Company at the following redemption prices (expressed as a percentage of
the principal amount to be redeemed) plus accrued interest to the redemption
date:
Redemption Periods Redemption Prices
- ------------------------------------- ------------------------------------------
Notice of redemption will be given by mail to Holders of Notes of this
issue not less than 30 or more than 60 days prior to the date fixed for
redemption, all as provided in the Indenture. In the event of redemption of
this Global Note in part only, a new Global Note or Notes of like tenor and
series for the unredeemed portion hereof will be issued in the name of the
Noteholder hereof upon the surrender hereof.]
Interest payments for this Global Note shall be computed and paid on the
basis of a 360-day year of twelve 30-day months. If any Interest Payment Date
or the date on which the principal of this Global Note is required to be paid is
not a Business Day, then payment of principal, premium or interest need not be
made on such date
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but may be made on the next succeeding Business Day with the same force and
effect as if made on such Interest Payment Date or date on which the principal
of this Global Note is required to be paid and, in the case of timely payment
thereof no interest shall accrue for the period from and after such Interest
Payment Date or the date on which the principal of this Global Note is required
to be paid.
The Company, at its option, and subject to the terms and conditions
provided in the Indenture, will be discharged from any and all obligations in
respect of the Notes (except for certain obligations as specifically set forth
in the Indenture) if the Company deposits with the Trustee money, U.S.
Government Obligations which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money, or a
combination of money and U.S. Government Obligations, in any event in an amount
sufficient, without reinvestment, as certified by an independent public
accounting firm of national reputation in a written certification delivered to
the Trustee, to pay at maturity or the applicable redemption date (provided that
notice of redemption shall have been duly given or irrevocable provision
satisfactory to the Trustee shall have been duly made for the giving of any
notice of redemption) all outstanding Notes, including principal and any premium
and interest due or to become due to such date of maturity, as the case may be.
If an Event of Default shall occur and be continuing, the principal of the
Notes may be declared due and payable in the manner and with the effect provided
in the Indenture and, upon such declaration, the Trustee can demand the
redemption of the Pledged First Mortgage Bonds as provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modifications of the rights and obligations of the
Company and the rights of the Noteholders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of not less than a
majority in principal amount of the outstanding Notes affected by such amendment
or modifications. Any such consent or waiver by the Holder of this Global Note
shall be conclusive and binding upon such Holder and upon all future Holders of
this Global Note and of any Note issued upon the registration of transfer hereof
or in exchange therefor or in lieu thereof whether or not notation of such
consent or waiver is made upon the Note.
As set forth in and subject to the provisions of the Indenture, no Holder
of any Notes will have any right to institute any proceeding with respect to the
Indenture or for any remedy thereunder unless such Holder shall have previously
given to the Trustee written notice of a continuing Event of Default with
respect to such Notes, the Holders of not less than a majority in principal
amount of the outstanding Notes affected by such Event of Default shall have
made written request and offered
A-5
<PAGE>
reasonable indemnity to the Trustee to institute such proceeding as Trustee and
the Trustee shall have failed to institute such proceeding within 60 days;
provided that such limitations do not apply to a suit instituted by the Holder
hereof for the enforcement of payment of the principal of and any premium or
interest on this Note on or after the respective due dates expressed herein.
No reference herein to the Indenture and to provisions of this Global Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Global Note at the times, places and rates and the coin or
currency prescribed in the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, this Global Note may be transferred only as permitted by the legend
hereto.
If at any time the Depositary for this Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for this Global Note or
if at any time the Depositary for this Global Note shall no longer be eligible
or in good standing under the Securities Exchange Act of 1934, as amended, or
other applicable statute or regulation, the Company shall appoint a successor
Depositary with respect to this Global Note. If a successor Depositary for this
Global Note is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company's
election to issue this Note in global form shall no longer be effective with
respect to this Global Note and the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of individual
Notes in exchange for this Global Note, will authenticate and deliver individual
Notes of like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of this Global Note.
The Company may at any time and in its sole discretion determine that all
Notes of this series (but not less than all) issued or issuable in the form of
one or more Global Notes shall no longer be represented by such Global Note or
Notes. In such event, the Company shall execute, and the Trustee, upon receipt
of a Company Order for the authentication and delivery of individual Notes in
exchange for such Global Note, shall authenticate and deliver, individual Notes
of like tenor and terms in definitive form in an aggregate principal amount
equal to the principal amount of such Global Note or Notes in exchange for such
Global Note or Notes.
Under certain circumstances specified in the Indenture, the Depositary may
be required to surrender any two or more Global Notes which have identical terms
(but which may have differing Original Issue Dates) to the Trustee, and the
Company shall execute and the Trustee shall authenticate and deliver to, or at
the direction of, the
A-6
<PAGE>
Depositary a Global Note in principal or amount equal to the aggregate principal
amount of, and with all terms identical to, the Global Notes surrendered thereto
and that shall indicate all Original Issue Dates and the principal amount
applicable to each such Original Issue Date.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the state of Washington.
Unless the certificate of authentication hereon has been executed by the
Trustee, directly or through an Authenticating Agent by manual signature of an
authorized officer, this Global Note shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.
All capitalized terms used but not otherwise defined in this Global Note
shall have the respective meanings assigned to them in the Indenture unless
otherwise indicated herein.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PUGET SOUND ENERGY, INC.
Dated:
By:______________________________________
Title:___________________________________
Attest:__________________________________
Title:___________________________________
A-7
<PAGE>
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This Note is one of the Notes of the series
herein designated, described or provided
for in the within-mentioned Indenture.
STATE STREET BANK AND TRUST,
BOSTON, MASSACHUSETTS, as
Trustee
By:_________________________________
Authorized Officer
A-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT
MIN ACT - _____ Custodian _________
(Cust) (Minor)
TEN ENT - as tenants by the entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with right of
survivorship and not as tenants in
common ------------------------------------
State
Additional abbreviations may also be used
though not in the above list.
____________
FOR VALUE RECEIVED the undersigned hereby sell(s),
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_________________________________________________________
_________________________________________________________
_________________________________________________________
Please print or type name and address
including postal zip code of assignee
the within note and all rights
thereunder, hereby irrevocably
constituting and appointing attorney to
transfer said note on the books of the
Company, with full power of
substitution in the premises.
Dated:________________________
A-9
<PAGE>
___________________________________
NOTICE: The signature to this
assignment must correspond with
the name as written upon the
face of the within instrument in
every particular, without
alteration or enlargement or any
change whatever.
A-10
<PAGE>
EXHIBIT B
FORM OF NOTE
PRIOR TO SUBSTITUTION DATE
REGISTERED REGISTERED
PUGET SOUND ENERGY, INC.
SENIOR NOTE, SERIES
CUSIP: PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE: MATURITY DATE:
INTEREST RATE: NUMBER:
PUGET SOUND ENERGY, INC., a corporation of the state of Washington (the
"Company"), for value received hereby promises to pay to
DOLLARS
or registered assigns, the principal sum of
on the Maturity Date set forth above, and to pay interest thereon from the
Original Issue Date set forth above or from the most recent date to which
interest has been paid or duly provided for, semiannually in arrears on
__________ and __________ in each year (each, an "Interest Payment Date"),
commencing on the first such Interest Payment Date succeeding the Original Issue
Date set forth above, at the per annum Interest Rate set forth above, until the
principal hereof is paid or made available for payment. No interest shall
accrue on the Maturity Date, so long as the principal amount of this Note is
paid in full on the Maturity Date. The interest so payable and punctually paid
or duly provided for on any such Interest Payment Date will, as provided in the
Indenture (as defined below), be paid to the Person in whose name this Note is
registered at the close of business on the Regular Record Date for such
interest, which shall be the ___________ or ___________, as the case may be,
next preceding such Interest Payment Date; provided that the first Interest
Payment Date for any Note, the Original Issue Date of which is after a Regular
Record Date but prior to the applicable Interest Payment Date, shall be the
Interest Payment Date following the next succeeding Regular Record Date; and
provided, further, that interest payable on the Maturity Date set forth above
or, if applicable, upon redemption or acceleration, shall be payable to the
Person to whom principal shall be payable. Except as otherwise provided in the
Indenture (referred to on the reverse
B-1
<PAGE>
hereof), any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and
shall be paid to the Person in whose name this Note is registered at the close
of business on a Special Record Date for the payment of such defaulted interest
to be fixed by the Trustee, notice whereof shall be given to Noteholders not
more than 15 days nor fewer than 10 days prior to such Special Record Date.
Principal, applicable premium and interest due at the maturity of this Note
shall be payable in immediately available funds when due upon presentation and
surrender of this Note at the corporate trust office of the Trustee or at the
authorized office of any paying agent. Interest on this Note (other than
interest payable at maturity) shall be paid by check or wire transfer payable in
clearinghouse funds to the Holder as its name appears on the register; provided
that if the Trustee receives a written request from any Holder of Notes, the
aggregate principal amount of which having the same Interest Payment Date as
this Note equals or exceeds $10,000,000, on or before the applicable Regular
Record Date, interest on this Note shall be paid by wire transfer of immediately
available funds to a bank designated by such Holder in its request or by direct
deposit into the account of such Holder designated by such Holder in its request
if such account is maintained with the Trustee or any paying agent.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH
IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof directly or through an Authenticating
Agent by manual signature of an authorized officer, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PUGET SOUND ENERGY, INC.
By:_______________________________________________
Title:____________________________________________
B-2
<PAGE>
Attest:___________________________________________
Title:____________________________________________
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This Note is one of the Notes of the
series herein designated, described or
provided for in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST, BOSTON,
MASSACHUSETTS, as Trustee
By:______________________________
Authorized Officer
B-3
<PAGE>
[FORM OF REVERSE OF NOTE]
PUGET SOUND ENERGY, INC.
SENIOR NOTES SERIES
This Note is one of a duly authorized issue of Senior Notes, Series ____
(the "Notes of this Series") of the Company issued and to be issued under an
Indenture dated as of _____________, 1997 between the Company and State Street
Bank and Trust, Boston, Massachusetts, as trustee (the "Trustee", which term
includes any successor Trustee under the Indenture) and indentures supplemental
thereto (collectively, the "Indenture"). Under the Indenture, one or more
series of notes may be issued and, as used herein, the term "Notes" refers to
the Notes of this series and any other outstanding series of Notes. Reference is
hereby made for a more complete statement of the respective rights, limitations
of rights, duties and immunities under the Indenture of the Company, the Trustee
and the Noteholders and of the terms upon which the Notes are and are to be
authenticated and delivered. This Note is one of the series designated on the
face hereof limited in aggregate principal amount to $___________.
Prior to the Substitution Date (as hereinafter defined), the Notes will be
secured by first mortgage bonds (the "Pledged First Mortgage Bonds" delivered by
the Company to the Trustee for the benefit of the Holders of the Notes, issued
under either (a) the Fortieth Supplemental Indenture, dated September 1, 1954,
from the Company to State Street Bank and Trust, Boston, Massachusetts, as
successor trustee (the "Electric Mortgage Trustee"), as supplemented and amended
(the "Electric Mortgage"), or (b) the Indenture of First Mortgage, dated April
1, 1957, from the Company, as successor to Washington Natural Gas Company, to
Harris Trust and Savings Bank, Chicago, Illinois, as trustee (the "Gas Mortgage
Trustee" and, together with the Electric Mortgage Trustee, the "Mortgage
Trustee"), as supplemented and amended (the "Gas Mortgage" and, together with
the Electric Mortgage, the "First Mortgages"). Reference is made to the First
Mortgages and the Indenture for a description of the rights of the Trustee as
holder of the Pledged First Mortgage Bonds, the property mortgaged and pledged
under each of the First Mortgages, the rights of the Company and of the
applicable Mortgage Trustee in respect thereof, the duties and immunities of the
applicable Mortgage Trustee, the terms and conditions upon which the Pledged
First Mortgage Bonds are secured and the circumstances under which additional
first mortgage bonds may be issued.
FROM AND AFTER SUCH TIME AS ALL FIRST MORTGAGE BONDS (OTHER THAN PLEDGED
FIRST MORTGAGE BONDS) ISSUED UNDER EITHER OF THE FIRST MORTGAGES HAVE BEEN
RETIRED THROUGH PAYMENT, REDEMPTION OR OTHERWISE (INCLUDING THOSE FIRST MORTGAGE
B-4
<PAGE>
BONDS THE PAYMENT FOR WHICH HAS BEEN PROVIDED FOR IN ACCORDANCE WITH THE
APPLICABLE FIRST MORTGAGE) AT, BEFORE OR AFTER THE MATURITY THEREOF (THE
"SUBSTITUTION DATE"), THE PLEDGED FIRST MORTGAGE BONDS SHALL CEASE TO SECURE THE
NOTES IN ANY MANNER, AND, AT THE OPTION OF THE COMPANY, THE NOTES EITHER (A)
WILL BECOME UNSECURED GENERAL OBLIGATIONS OF THE COMPANY OR (B) WILL BE SECURED
BY FIRST MORTGAGE BONDS ISSUED UNDER AN INDENTURE OTHER THAN THE FIRST
MORTGAGES. IN CERTAIN CIRCUMSTANCES PRIOR TO THE SUBSTITUTION DATE AS PROVIDED
IN THE INDENTURE, THE COMPANY IS PERMITTED TO REDUCE THE AGGREGATE PRINCIPAL
AMOUNT OF A SERIES OF PLEDGED FIRST MORTGAGE BONDS HELD BY THE TRUSTEE, BUT IN
NO EVENT PRIOR TO THE SUBSTITUTION DATE TO AN AMOUNT LESS THAN THE AGGREGATE
OUTSTANDING PRINCIPAL AMOUNT OF THE RELATED ISSUE OF NOTES INITIALLY ISSUED
CONTEMPORANEOUSLY WITH SUCH PLEDGED FIRST MORTGAGE BONDS.
[If applicable, one of the following two sentences: This Note may not be
redeemed prior to ____________, _____. This Note is not redeemable prior to the
Maturity Date set forth on the face hereof] [If applicable: On or after
__________, _____________, this Note is redeemable in whole or in part in
increments of $1,000 (provided that any remaining principal amount of this Note
shall be at least $1,000) at the option of the Company at the following
redemption prices (expressed as a percentage of the principal amount to be
redeemed) plus accrued interest to the redemption date:
Redemption Periods Redemption Prices
- ------------------------------------- ------------------------------------------
Notice of redemption will be given by mail to Holders of Notes of this
issue not less than 30 or more than 60 days prior to the date fixed for
redemption, all as provided in the Indenture. In the event of redemption of
this Note in part only, a new Note or Notes of like tenor for the unredeemed
portion hereof will be issued in the name of the Noteholder hereof upon the
surrender hereof.]
Interest payments for this Note shall be computed and paid on the basis of
a 360-day year of twelve 30-day months. If any Interest Payment Date or the
date on which the principal of this Note is required to paid is not a Business
Day, then payment of principal, premium or interest need not be made on such
date but may be made on the next succeeding Business Day with the same force and
effect as if made on such Interest Payment Date or the date on which the
principal of this Note is
B-5
<PAGE>
required to be paid, and, in the case of timely payment thereof, no interest
shall accrue for the period from and after such Interest Payment Date or the
date on which the principal of this Note is required to be paid.
The Company, at its option, and subject to the terms and conditions
provided in the Indenture, will be discharged from any and all obligations in
respect of the Notes (except for certain obligations as specifically set forth
in the Indenture) if the Company deposits with the Trustee money, U.S.
Government Obligations which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money, or a
combination of money and U.S. Government Obligations, in any event in an amount
sufficient, without reinvestment, as certified by an independent public
accounting firm of national reputation in a written certification delivered to
the Trustee, to pay at maturity or the applicable redemption date (provided that
notice of redemption shall have been duly given or irrevocable provision
satisfactory to the Trustee shall have been duly made for the giving of any
notice of redemption) all outstanding Notes, including principal and any premium
and interest due or to become due to such date of maturity, as the case may be.
If an Event of Default shall occur and be continuing, the principal of the
Notes may be declared due and payable in the manner and with the effect provided
in the Indenture and, upon such declaration, the Trustee can demand the
redemption of the Pledged First Mortgage Bonds as provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modifications of the rights and obligations of the
Company and the rights of the Noteholders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of not less than a
majority in principal amount of the outstanding Notes affected by such amendment
or modifications. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange therefor in lieu thereof whether or not notation of such consent or
waiver is made upon the Note.
As set forth in and subject to the provisions of the Indenture, no Holder
of any Notes will have any right to institute any proceeding with respect to the
Indenture or for any remedy thereunder unless such Holder shall have previously
given to the Trustee written notice of a continuing Event of Default with
respect to such Notes, the Holders of not less than a majority in principal
amount of the outstanding Notes affected by such Event of Default shall have
made written request and offered reasonable indemnity to the Trustee to
institute such proceeding as Trustee and the Trustee shall have failed to
institute such proceeding within 60 days; provided that such limitations do not
apply to a suit instituted by the Holder hereof for the
B-6
<PAGE>
enforcement of payment of the principal of and any premium or interest on this
Note on or after the respective due dates expressed herein.
No reference herein to the Indenture and to provisions of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note at the times, places and rates and the coin or currency prescribed
in the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Note register. Upon
surrender of this Note for registration or transfer at the corporate trust
office of the Trustee or such other office or agency as may be designated by the
Company in the Borough of Manhattan, the City and State of New York, endorsed by
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Note registrar, duly executed by the Holder hereof or the
attorney in fact of such Holder duly authorized in writing, one or more new
Notes of like tenor and of authorized denominations and for the same aggregate
principal amount will be issued to the designated transferee or transferees.
The Notes of this series are issuable only in registered form, without
coupons, in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Notes are exchangeable for a like aggregate principal amount of Notes of like
tenor and of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner thereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the state of Washington.
All capitalized terms used but not otherwise defined in this Note shall
have the respective meanings assigned to them in the Indenture.
B-7
<PAGE>
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT
MIN ACT - _____ Custodian _________
(Cust) (Minor)
TEN ENT - as tenants by the entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with right of
survivorship and not as tenants in
common -------------------------------------
State
Additional abbreviations may also be used
though not in the above list.
____________
FOR VALUE RECEIVED the undersigned hereby sell(s),
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
Please print or type name and address
including postal zip code of assignee
the within note and all rights
thereunder, hereby irrevocably
constituting and appointing attorney to
transfer said note on the books of the
Company, with full power of
substitution in the premises.
Dated:__________________________
B-8
<PAGE>
__________________________________
NOTICE: The signature to this
assignment must correspond with
the name as written upon the
face of the within instrument in
every particular, without
alteration or enlargement or any
change whatever.
B-9
<PAGE>
EXHIBIT C
FORM OF GLOBAL NOTE FOLLOWING SUBSTITUTION DATE
REGISTERED REGISTERED
THIS NOTE IS A GLOBAL NOTE REGISTERED IN THE NAME OF THE DEPOSITARY
(REFERRED TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY UNLESS THIS
GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST
COMPANY (55 WATER STREET NEW YORK, NEW YORK), TO THE TRUSTEE FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO. ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
PUGET SOUND ENERGY, INC.
SENIOR NOTE, SERIES
CUSIP: NUMBER:
ORIGINAL ISSUE DATE(S): PRINCIPAL AMOUNT(S):
INTEREST RATE: MATURITY DATE:
PUGET SOUND ENERGY, INC., a corporation of the state of Washington (the
"Company"), for value received hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of
DOLLARS
C-1
<PAGE>
on the Maturity Date set forth above, and to pay interest thereon from the
Original Issue Date (or if this Global Note has two or more Original Issue
Dates, interest shall, beginning on each such Original Issue Date, begin to
accrue for that part of the principal amount to which that Original Issue Date
is applicable) set forth above or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semiannually in arrears on
the __________ and __________ in each year (each, an "Interest Payment Date"),
commencing on the first such Interest Payment Date succeeding the applicable
Original Issue Date set forth above, at the per annum Interest Rate set forth
above, until the principal hereof is paid or made available for payment. No
interest shall accrue on the Maturity Date, so long as the principal amount of
this Global Note is paid on the Maturity Date. The interest so payable and
punctually paid or duly provided for on any such Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Note is
registered at the close of business on the Regular Record Date for such
interest, which shall be the ___________ or ____________, as the case may be,
next preceding such Interest Payment Date; provided that the first Interest
Payment Date for any part of this Note, the Original Issue Date of which is
after a Regular Record Date but prior to the applicable Interest Payment Date,
shall be the Interest Payment Date following the next succeeding Regular Record
Date; and provided that interest payable on the Maturity Date set forth above
or, if applicable, upon redemption or acceleration, shall be payable to the
Person to whom principal shall be payable. Except as otherwise provided in the
Indenture (as defined below), any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date and shall be paid to the Person in whose name this Note is
registered at the close of business on a Special Record Date for the payment of
such defaulted interest to be fixed by the Trustee, notice whereof shall be
given to Noteholders not more than fifteen days or fewer than ten days prior to
such Special Record Date. On or before ______, New York City time, or such
other time as shall be agreed upon between the Trustee and the Depositary, of
the day on which such payment of interest is due on this Global Note (other than
maturity), the Trustee shall pay to the Depositary such interest in same day
funds. On or before _______, New York City time, or such other time as shall be
agreed upon between the Trustee and the Depositary, of the day on which
principal, interest payable at maturity and premium, if any, is due on this
Global Note, the Trustee shall deposit with the Depositary the amount equal to
the principal, interest payable at maturity and premium, if any, by wire
transfer into the account specified by the Depositary. As a condition to the
payment, on the Maturity Date or upon redemption or acceleration, of any part of
the principal and applicable premium of this Global Note, the Depositary shall
surrender, or cause to be surrendered, this Global Note to the Trustee,
whereupon a new Global Note shall be issued to the Depositary.
C-2
<PAGE>
This Global Note is a global security in respect of a duly authorized issue
of Senior Notes, Series ___ (the "Notes of this Series," which term includes any
Global Notes representing such Notes) of the Company issued and to be issued
under an Indenture dated as of ________, 1997 between the Company and State
Street Bank and Trust, Boston, Massachusetts, as trustee (the "Trustee," which
term includes any successor Trustee under the Indenture) and indentures
supplemental thereto (collectively, the "Indenture"). Under the Indenture, one
or more series of notes may be issued and, as used herein, the term "Notes"
refers to the Notes of this series and any other outstanding series of Notes.
Reference is hereby made to the Indenture for a more complete statement of the
respective rights, limitations of rights, duties and immunities under the
Indenture of the Company, the Trustee and the Noteholders and of the terms upon
which the Notes are and are to be authenticated and delivered. This Global Note
has been issued in respect of the series designated on the first page hereof
limited in aggregate principal amount to $__________.
[Include the following paragraph if the Company elects to issue Pledged
Substituted Mortgage Bonds (as defined in the Indenture): The Notes will be
secured by first mortgage bonds (the "Pledged First Mortgage Bonds") delivered
by the Company to the Trustee for the benefit of the Holders of the Notes,
issued under [the Substituted Mortgage (as defined in the Indenture)] from the
Company to ________________, as trustee (the "Mortgage Trustee"), as
supplemented and amended (the "First Mortgage"). Reference is made to the First
Mortgage and the Indenture for a description of the rights of the Trustee as
holder of the Pledged First Mortgage Bonds, the property mortgaged and pledged
under the First Mortgage, the rights of the Company and of the Mortgage Trustee
in respect thereof, the duties and immunities of the Mortgage Trustee, the terms
and conditions upon which the Pledged First Mortgage Bonds are secured and the
circumstances under which additional first mortgage bonds may be issued.]
Each Note shall be dated and issued as of the date of its authentication by
the Trustee and shall bear an Original Issue Date or Dates. Each Note or Global
Note issued upon transfer, exchange or substitution of such Note or Global Note
shall bear the Original Issue Date or Dates of such transferred, exchanged or
substituted Note or Global Note, as the case may be.
[If applicable, one of the following two sentences: This Global Note may
not be redeemed prior to ____________, ____. This Global Note is not redeemable
prior to the Maturity Date set forth on the first page hereof.] [If applicable:
On or after _______________, ____, this Global Note is redeemable in whole or in
part in increments of $1,000 (provided that any remaining principal amount of
this Global Note shall be at least $100,000) at the option of the Company at the
following
C-3
<PAGE>
redemption prices (expressed as a percentage of the principal amount to be
redeemed) plus accrued interest to the redemption date:
Redemption Periods Redemption Prices
- ---------------------------------------- --------------------------------------
Notice of redemption will be given by mail to Holders of Notes of this issue not
less than 30 or more than 60 days prior to the date fixed for redemption, all as
provided in the Indenture. In the event of redemption of this Global Note in
part only, a new Global Note or Notes of like tenor and series for the
unredeemed portion hereof will be issued in the name of the Noteholder hereof
upon the surrender hereof.]
Interest payments for this Global Note shall be computed and paid on the
basis of a 360-day year of twelve 30-day months. If any Interest Payment Date
or the date on which the principal of this Global Note is required to be paid is
not a Business Day, then payment of principal, premium or interest need not be
made on such date but may be made on the next succeeding Business Day with the
same force and effect as if made on such Interest Payment Date or date on which
the principal of this Global Note is required to be paid and, in the case of
timely payment thereof no interest shall accrue for the period from and after
such Interest Payment Date or the date on which the principal of this Global
Note is required to be paid.
The Company, at its option, and subject to the terms and conditions
provided in the Indenture, will be discharged from any and all obligations in
respect of the Notes (except for certain obligations specifically as set forth
in the Indenture) if the Company deposits with the Trustee money, U.S.
Government Obligations which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money, or a
combination of money and U.S. Government Obligations, in any event in an amount
sufficient, without reinvestment, as certified by an independent public
accounting firm of national reputation in a written certification delivered to
the Trustee, to pay at maturity or the applicable redemption date (provided that
notice of redemption shall have been duly given or irrevocable provision
satisfactory to the Trustee shall have been duly made for the giving of any
notice of redemption) all outstanding Notes, including principal and any premium
and interest due or to become due to such date of maturity, as the case may be.
If an Event of Default shall occur and be continuing, the principal of the
Notes may be declared due and payable in the manner and with the effect provided
in the Indenture.
C-4
<PAGE>
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modifications of the rights and obligations of the
Company and the rights of the Noteholders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of not less than a
majority in principal amount of the outstanding Notes affected by such amendment
or modifications. Any such consent or waiver by the Holder of this Global Note
shall be conclusive and binding upon such Holder and upon all future Holders of
this Global Note and of any Note issued upon the registration of transfer hereof
or in exchange therefor or in lieu thereof whether or not notation of such
consent or waiver is made upon the Note.
As set forth in and subject to the provisions of the Indenture, no Holder
of any Notes will have any right to institute any proceeding with respect to the
Indenture or for any remedy thereunder unless such Holder shall have previously
given to the Trustee written notice of a continuing Event of Default with
respect to such Notes, the Holders of not less than a majority in principal
amount of the outstanding Notes affected by such Event of Default shall have
made written request and offered reasonable indemnity to the Trustee to
institute such proceeding as Trustee and the Trustee shall have failed to
institute such proceeding within 60 days; provided that such limitations do not
apply to a suit instituted by the Holder hereof for the enforcement of payment
of the principal of and any premium or interest on this Note on or after the
respective due dates expressed herein.
No reference herein to the Indenture and to provisions of this Global Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Global Note at the times, places and rates and the coin or
currency prescribed in the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, this Global Note may be transferred only as permitted by the legend
hereto.
If at any time the Depositary for this Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for this Global Note or
if at any time the Depositary for this Global Note shall no longer be eligible
or in good standing under the Securities Exchange Act of 1934, as amended, or
other applicable statute or regulation, the Company shall appoint a successor
Depositary with respect to this Global Note. If a successor Depositary for this
Global Note is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company's
election to issue this Note in global form shall no longer be effective with
respect to this Global Note and the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery
C-5
<PAGE>
of individual Notes in exchange for this Global Note, will authenticate and
deliver individual Notes of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of this Global Note.
The Company may at any time and in its sole discretion determine that all
Notes (but not less than all) issued or issuable in the form of one or more
Global Notes shall no longer be represented by such Global Note or Notes. In
such event, the Company shall execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of individual Notes in
exchange for such Global Note, shall authenticate and deliver, individual Notes
of like tenor and terms in definitive form in an aggregate principal amount
equal to the principal amount of such Global Note or Notes in exchange for such
Global Note or Notes.
Under certain circumstances specified in the Indenture, the Depositary may
be required to surrender any two or more Global Notes which have identical terms
(but which may have differing Original Issue Dates) to the Trustee, and the
Company shall execute and the Trustee shall authenticate and deliver to, or at
the direction of, the Depositary a Global Note in principal or amount equal to
the aggregate principal amount of, and with all terms identical to, the Global
Notes surrendered thereto and that shall indicate all Original Issue Dates and
the principal amount applicable to each such Original Issue Date.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the state of Washington.
Unless the certificate of authentication hereon has been executed by the
Trustee, directly or through an Authenticating Agent by manual signature of an
authorized officer, this Global Note shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.
All capitalized terms used but not otherwise defined in this Global Note
shall have the respective meanings assigned to them in the Indenture unless
otherwise indicated herein.
C-6
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PUGET SOUND ENERGY, INC.
Dated:
By:____________________________
Title:_________________________
Attest:________________________
Title:_________________________
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This Note is one of the Notes of the
series herein designated, described or
provided for in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST,
BOSTON, MASSACHUSETTS, as
Trustee
By:____________________________
Authorized Officer
C-7
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT
MIN ACT - _____ Custodian _______
(Cust) (Minor)
TEN ENT - as tenants by the entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with right of
survivorship and not as tenants in
common ---------------------------------
State
Additional abbreviations may also be used
though not in the above list.
____________
FOR VALUE RECEIVED the undersigned hereby sell(s),
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Please print or type name and address
including postal zip code of assignee
the within note and all rights thereunder,
hereby irrevocably constituting and
appointing attorney to transfer said note
on the books of the Company, with full
power of substitution in the premises.
Dated:_______________________________
C-8
<PAGE>
_____________________________________
NOTICE: The signature to this
assignment must correspond with
the name as written upon the
face of the within instrument in
every particular, without
alteration or enlargement or any
change whatever.
C-9
<PAGE>
EXHIBIT D
FORM OF NOTE FOLLOWING SUBSTITUTION DATE
REGISTERED REGISTERED
PUGET SOUND ENERGY, INC.
SENIOR NOTE, SERIES
CUSIP: PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE(S): MATURITY DATE:
INTEREST RATE: NUMBER:
PUGET SOUND ENERGY, INC., a corporation of the state of Washington (the
"Company"), for value received hereby promises to pay to or registered assigns,
the principal sum of
DOLLARS
on the Maturity Date set forth above, and to pay interest thereon from the
Original Issue Date set forth above or from the most recent date to which
interest has been paid or duly provided for, semiannually in arrears on
__________ and __________ in each year (each, an "Interest Payment Date"),
commencing on the first such Interest Payment Date succeeding the Original Issue
Date set forth above, at the per annum Interest Rate set forth above, until the
principal hereof is paid or made available for payment. No interest shall
accrue on the Maturity Date, so long as the principal amount of this Note is
paid in full on the Maturity Date. The interest so payable and punctually paid
or duly provided, further, for on any such Interest Payment Date will, as
provided in the Indenture (as defined below), be paid to the Person in whose
name this Note is registered at the close of business on the Regular Record Date
for such interest, which shall be the __________ or __________ , as the case may
be, next preceding such Interest Payment Date; provided that the first Interest
Payment Date for any Note, the Original Issue Date of which is after a Regular
Record Date but prior to the applicable Interest Payment Date, shall be the
Interest Payment Date following the next succeeding Regular Record Date; and
provided, further, that interest payable on the Maturity Date set forth above
or, if applicable, upon redemption or acceleration, shall be payable to the
Person to whom principal shall be payable. Except as otherwise provided in the
Indenture (referred to on the reverse
D-1
<PAGE>
hereof), any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and
shall be paid to the Person in whose name this Note is registered at the close
of business on a Special Record Date for the payment of such defaulted interest
to be fixed by the Trustee, notice whereof shall be given to Noteholders not
more than 15 days nor fewer than 10 days prior to such Special Record Date.
Principal, applicable premium and interest due at the maturity of this Note
shall be payable in immediately available funds when due upon presentation and
surrender of this Note at the corporate trust office of the Trustee or at the
authorized office of any paying agent. Interest on this Note (other than
interest payable at maturity) shall be paid by check or wire transfer payable in
clearinghouse funds to the Holder as its name appears on the register; provided,
that if the Trustee receives a written request from any Holder of Notes, the
aggregate principal amount of which having the same Interest Payment Date as
this Note equals or exceeds $10,000,000, on or before the applicable Regular
Record Date, interest on the Note shall be paid by wire transfer of immediately
available funds to a bank designated by such Holder in its request or by direct
deposit into the account of such Holder designated by such Holder in its request
if such account is maintained with the Trustee or any Paying agent.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH
IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof directly or through an Authenticating
Agent by manual signature of an authorized officer, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PUGET SOUND ENERGY, INC.
Dated:
By:______________________________________
Title:___________________________________
Attest:__________________________________
Title:___________________________________
D-2
<PAGE>
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This Note is one of the Notes of the
series herein designated, described or
provided for in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST, BOSTON,
MASSACHUSETTS, as Trustee
By:______________________________________
Authorized Officer
D-3
<PAGE>
[FORM OF REVERSE OF NOTE]
PUGET SOUND ENERGY, INC.
SENIOR NOTE, SERIES
This Note is one of a duly authorized issue of Senior Notes, Series ___
(the "Notes of this Series") of the Company issued and to be issued under an
Indenture dated as of ________, 1997, between the Company and State Street Bank
and Trust, Boston, Massachusetts, as trustee (herein called the "Trustee"),
which term includes any successor Trustee under the Indenture) and indentures
supplemental thereto (collectively, the "Indenture"). Under the Indenture, one
or more series of notes may be issued and, as used herein, the term "Notes"
refers to the Notes of this series and any other outstanding series of Notes.
Reference is hereby made for a more complete statement of the respective rights,
limitations of rights, duties and immunities under the Indenture of the Company,
the Trustee and the Noteholders and of the terms upon which the Notes are and
are to be authenticated and delivered. This Note is one of the series
designated on the face hereof limited in aggregate principal amount to
$__________.
[Include the following paragraph if the Company elects to issue Pledged
Substituted Mortgage Bonds (as defined in the Indenture): The Notes will be
secured by first mortgage bonds (the "Pledged First Mortgage Bonds") delivered
by the Company to the Trustee for the benefit of the Holders of the Notes,
issued under [the Substituted Mortgage (as defined in the Indenture)] from the
Company to ________________, as trustee (the "Mortgage Trustee"), as
supplemented and amended (the "First Mortgage"). Reference is made to the First
Mortgage and the Indenture for a description of the rights of the Trustee as
holder of the Pledged First Mortgage Bonds, the property mortgaged and pledged
under the First Mortgage, the rights of the Company and of the Mortgage Trustee
in respect thereof, the duties and immunities of the Mortgage Trustee, the terms
and conditions upon which the Pledged First Mortgage Bonds are secured and the
circumstances under which additional first mortgage bonds may be issued.]
[If applicable, one of the following two sentences: This Note may not be
redeemed prior to __________, ____. This Note is not redeemable prior to the
Maturity Date set forth on the face hereof.] [If applicable: On or after
________, ____, this Note is redeemable in whole or in part in increments of
$1,000 (provided that any remaining principal amount of this Note shall be at
least $1,000) at the option of the Company at the following redemption prices
(expressed as a percentage of the principal amount to be redeemed) plus accrued
interest to the redemption date:
D-4
<PAGE>
Redemption Periods Redemption Prices
- ------------------------------------- ------------------------------------------
Notice of redemption will be given by mail to Holders of Notes of this
issue not less than 30 or more than 60 days prior to the date fixed for
redemption, all as provided in the Indenture. In the event of redemption of
this Note in part only, a new Note or Notes of like tenor for the unredeemed
portion hereof will be issued in the name of the Noteholder hereof upon the
surrender hereof.]
Interest payments for this Note shall be computed and paid on the basis of
a 360-day year of twelve 30-day months. If any Interest Payment Date or the
date on which the principal of this Note is required to paid is not a Business
Day, then payment of principal, premium or interest need not be made on such
date but may be made on the next succeeding Business Day with the same force and
effect as if made on such Interest Payment Date or the date on which the
principal of this Note is required to be paid, and, in the case of timely
payment thereof, no interest shall accrue for the period from and after such
Interest Payment Date or the date on which the principal of this Note is
required to be paid.
The Company, at its option, and subject to the terms and conditions
provided in the Indenture, will be discharged from any and all obligations in
respect of the Notes (except for certain obligations as specifically set forth
in the Indenture) if the Company deposits with the Trustee money, U.S.
Government Obligations which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money, or a
combination of money and U.S. Government Obligations, in any event in an amount
sufficient, without reinvestment, as certified by an independent public
accounting firm of national reputation in a written certification delivered to
the Trustee, to pay at maturity or the applicable redemption date (provided that
notice of redemption shall have been duly given or irrevocable provision
satisfactory to the Trustee shall have been duly made for the giving of any
notice of redemption) all outstanding Notes, including principal and any premium
and interest due or to become due to such date of maturity, as the case may be.
If an Event of Default shall occur and be continuing, the principal of the
Notes may be declared due and payable in the manner and with the effect provided
in the
D-5
<PAGE>
Indenture and, upon such declaration, the Trustee can demand the redemption of
the Pledged First Mortgage Bonds as provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modifications of the rights and obligations of the
Company and the rights of the Noteholders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of not less than a
majority in principal amount of the outstanding Notes affected by such amendment
or modification. Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
therefor in lieu thereof whether or not notation of such consent or waiver is
made upon the Note.
As set forth in and subject to the provisions of the Indenture, no Holder
of any Notes will have any right to institute any proceeding with respect to the
Indenture or for any remedy thereunder unless such Holder shall have previously
given to the Trustee written notice of a continuing Event of Default with
respect to such Notes, the Holders of not less than a majority in principal
amount of the outstanding Notes affected by such Event of Default shall have
made written request and offered reasonable indemnity to the Trustee to
institute such proceeding as Trustee and the Trustee shall have failed to
institute such proceeding within 60 days; provided that such limitations do not
apply to a suit instituted by the Holder hereof for the enforcement of payment
of the principal of and any premium or interest on this Note on or after the
respective due dates expressed herein.
No reference herein to the Indenture and to provisions of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note at the times, places and rates and the coin or currency prescribed
in the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Note register. Upon
surrender of this Note for registration or transfer at the corporate trust
office of the Trustee or such other office or agency as may be designated by the
Company in the Borough of Manhattan, the City and State of New York, endorsed by
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Note registrar, duly executed by the Holder hereof or the
attorney in fact of such Holder duly authorized in writing, one or more new
Notes of like tenor and of authorized denominations and for the same aggregate
principal amount will be issued to the designated transferee or transferees.
D-6
<PAGE>
The Notes of this series are issuable only in registered form, without
coupons, in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Notes are exchangeable for a like aggregate principal amount of Notes of like
tenor and of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner thereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the state of Washington.
All capitalized terms used but not otherwise defined in this Note shall
have the respective meanings assigned to them in the Indenture.
D-7
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT
MIN ACT - _____ Custodian _________
(Cust) (Minor)
TEN ENT - as tenants by the entireties Under Uniform Gifts to Minors
JT TEN - as joint tenants with right of
survivorship and not as tenants in
common -------------------------------------
State
Additional abbreviations may also be used
though not in the above list.
____________
FOR VALUE RECEIVED the undersigned hereby sell(s),
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
Please print or type name and address
including postal zip code of assignee
the within note and all rights
thereunder, hereby irrevocably
constituting and appointing attorney to
transfer said note on the books of the
Company, with full power of
substitution in the premises.
Dated:____________________________
D-8
<PAGE>
________________________________________
NOTICE: The signature to this
assignment must correspond with
the name as written upon the
face of the within instrument in
every particular, without
alteration or enlargement or any
change whatever.
D-9
<PAGE>
EXHIBIT 5.1
[Perkins Coie letterhead]
November 26, 1997
Puget Sound Energy, Inc.
411 - 108th Avenue N.E.
Bellevue, WA 98004-5515
Ladies and Gentlemen:
This opinion is furnished in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of $500,000,000 aggregate
principal amount of Senior Notes (the "Notes") of Puget Sound Energy, Inc. (the
"Company") pursuant to the Company's Registration Statement on Form S-3 filed
with the Securities and Exchange Commission on the date hereof (the
"Registration Statement").
We have examined the Registration Statement and such other documents and
records of the Company, certificates of public officials, and other documents as
we have deemed necessary or appropriate for the purposes of this opinion.
Capitalized terms used but not otherwise defined herein have the respective
meanings assigned to such terms in the Registration Statement.
Based upon the foregoing, we are of the opinion that, when the following
events have occurred:
(a) the Board of Directors of the Company has duly authorized (i) the
issuance and sale of the Notes, (ii) the execution and delivery of an Indenture
(the "Indenture") between the Company and State Street Bank and Trust Company
(the "Note Trustee") and an indenture supplemental thereto pursuant to which the
Company will issue a series of Notes, (iii) the issuance and delivery of Pledged
Bonds to the Note Trustee to secure the Company's obligations under the Notes
and (iv) the execution and delivery of an indenture supplemental to the Electric
Utility Mortgage or the Gas Utility Mortgage, as the case may be, pursuant to
which the Company will issue a series of Pledged Bonds (the "Pledged Bond
Supplemental Indenture");
<PAGE>
November 25, 1997
Page 2
(b) the Washington Utilities and Transportation Commission has issued the
appropriate orders authorizing the issuance and sale of the Notes and the
issuance of the Pledged Bonds;
(c) the Registration Statement and any amendments or supplements thereto
have been filed, and the Registration Statement has become effective;
(d) the terms of the Notes and their issue and sale have been duly
established in conformity with the Indenture so as not to violate any applicable
law, agreement or instrument then binding upon the Company;
(e) the terms of the Pledged Bonds and their issue have been duly
established in conformity with the Electric Utility Mortgage or Gas Utility
Mortgage, as the case may be, so as not to violate any applicable law, agreement
or instrument then binding upon the Company;
(f) the Company having complied with the terms and conditions of the
Indenture with respect to the creation, authentication and delivery of a
supplemental indenture thereto;
(g) the due execution by the Company and authentication and delivery by the
Note Trustee of the Notes, and the issuance and sale thereof by the Company as
contemplated by the Registration Statement and in accordance with the above-
mentioned corporate and governmental authorizations;
(h) the Company having complied with the terms and conditions of the
Electric Utility Mortgage or the Gas Utility Mortgage, as the case may be, with
respect to the creation, authentication and delivery of a supplemental indenture
thereto;
(i) the due execution by the Company and authentication and delivery by the
Electric Utility Mortgage Trustee or the Gas Utility Mortgage Trustee, as the
case may be, of the Pledged Bonds, and the issuance thereof by the Company as
contemplated by the Registration Statement and in accordance with the above-
mentioned corporate and governmental authorizations; and
(j) the Pledged Bond Supplemental Indenture has been duly filed and
recorded in the appropriate recording offices of all jurisdictions in which the
properties subject to the Electric Utility Mortgage or the Gas Utility Mortgage,
as the
<PAGE>
November 25, 1997
Page 3
case may be, are located, and all appropriate Uniform Commercial Code filings
have been duly filed and recorded;
the Notes will constitute in the hands of the respective holders thereof valid
and binding obligations of the Company, subject to applicable bankruptcy and
insolvency laws and the application of general principles of equity.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Matters" in the related Prospectus. In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
PERKINS COIE
<PAGE>
EXHIBIT 25.1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
----------------------
Washington, D.C. 20549
----------------------
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE
TRUST INDENTURE ACT OF l939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
[_] CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
STATE STREET BANK AND TRUST COMPANY
---------------------------------------------------
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
-------------------------- ----------------------------
(State of incorporation if (I.R.S. Employer
not a national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
John R. Towers, Executive Vice President and General Counsel,
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
-------------------------------------------------------------
(Name, address and telephone number of agent for service)
PUGET SOUND ENERGY, INC.
---------------------------------------------------
(Exact name of obligor as specified in its charter)
Washington 91-0374630
-------------------------- ----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
411 - 108th Avenue N.E., Bellevue, Washington 98004-5515
--------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Senior Notes
-----------------------------------
(Title of the indenture securities)
<PAGE>
Item l. General Information.
-------------------
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject:
Department of Banking and Insurance of
The Commonwealth of Massachusetts
100 Cambridge Street
Boston, Massachusetts
Board of Governors of the Federal Reserve System
Washington, D.C.
Federal Deposit Insurance Corporation
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers:
The trustee is so authorized.
Item 2. Affiliations with obligor. If the obligor is an affiliate of the
-------------------------
trustee, describe each such affiliation.
None with respect to the trustee or its parent, State Street
Corporation.
Item l6. List of exhibits. List below all exhibits filed as a part of this
----------------
statement of eligibility and qualification.
l. A copy of the Articles of Association of the trustee as now
in effect.
A copy of the Articles of Association of the trustee, as now
in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with
Registration Statement of Morse Shoe, Inc. (File No. 22-17940)
and is incorporated herein by reference thereto.
2. A copy of the Certificate of Authority of the trustee to do
Business.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee
to commence business was necessary or issued is on file with
the Securities
-2-
<PAGE>
and Exchange Commission as Exhibit 2 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee (Form T-
1) filed with Registration Statement of Morse Shoe, Inc. (File
No. 22-17940) and is incorporated herein by reference thereto.
3. A copy of the Certification of Fiduciary Powers of the
Trustee.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee (Form T-
1) filed with Registration Statement of Morse Shoe, Inc. (File
No. 22-17940) and is incorporated herein by reference thereto.
4. A copy of the By-laws of the trustee as now in effect.
A copy of the By-Laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4
to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with Registration Statement of Eastern Edison
Company (File No. 33-37823) and is incorporated herein by
reference thereto.
5. Consent of the trustee required by Section 32l(b) of the Act.
6. A copy of the latest Consolidated Reports of Condition of the
trustee, published pursuant to law or the requirements of its
supervising or examining authority.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 6 and made a part hereof.
-3-
<PAGE>
NOTES
Inasmuch as this Form T-l is filed prior to the ascertainment by the
trustee of all facts on which to base its answer to Item 2, the answer to said
Item is based upon incomplete information. Said Item may, however, be considered
correct unless amended by an amendment to this Form T-l.
-4-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of l939, the
trustee, State Street Bank and Trust Company, a Massachusetts trust company, has
duly caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Hartford, and State of Connecticut, on the 24th day of November, 1997.
STATE STREET BANK AND TRUST
COMPANY,
Trustee
By /s/ Susan T. Keller
---------------------
Name: Susan T. Keller
Title: Vice President
-5-
<PAGE>
EXHIBIT 5
CONSENT OF THE TRUSTEE
REQUIRED BY SECTION 321(b)
OF THE TRUST INDENTURE ACT OF 1939
----------------------------------
The undersigned, as Trustee under an Indenture to be entered into between
Puget Sound Energy, Inc. and State Street Bank and Trust Company, Trustee, does
hereby consent that, pursuant to Section 321(b) of the Trust Indenture Act of
1939, reports of examinations with respect to the undersigned by Federal, State,
Territorial or District authorities may be furnished by such authorities to the
Securities and Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST
COMPANY,
Trustee
By /s/ Susan T. Keller
----------------------
Name: Susan T. Keller
Title: Vice President
Dated: November 24, 1997
<PAGE>
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business March 31, 1997,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act and in accordance
with a call made by the Commissioner of Banks under General Laws, Chapter 172,
Section 22(a).
<TABLE>
<CAPTION>
Thousands
of Dollars
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin......... 1,665,142
Interest-bearing balances.................................. 8,193,292
Securities.................................................... 10,238,113
Federal funds sold and securities purchased under agreements
to resell in domestic offices of the bank and of its Edge
subsidiary................................................... 5,863,144
Loans and lease financing receivables:
Loans and leases, net of unearned income................... 4,936,454
Allowance for loan and lease losses........................ 70,307
Loans and leases, net of unearned income and allowance..... 4,866,147
Assets held in trading accounts............................... 957,478
Premises and fixed assets..................................... 380,117
Other real estate owned....................................... 884
Investments in unconsolidated subsidiaries.................... 26,835
Customers' liability to this bank on acceptances outstanding.. 45,548
Intangible assets............................................. 158,080
Other assets.................................................. 1,066,957
----------
TOTAL ASSETS 33,450,737
==========
LIABILITIES
Deposits:
In domestic offices........................................ 8,270,845
Noninterest-bearing................................... 6,318,360
Interest-bearing...................................... 1,952,485
In foreign offices and Edge subsidiary..................... 12,760,086
Noninterest-bearing................................... 53,052
Interest-bearing...................................... 12,707,034
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its Edge
subsidiary................................................... 8,216,641
Demand notes issued to the U.S. Treasury and Trading
Liabilities.................................................. 926,821
Other borrowed money.......................................... 671,164
Subordinated notes and debentures............................. 0
Bank's liability on acceptances executed and outstanding...... 46,137
Other liabilities............................................. 745,529
----------
TOTAL LIABILITIES 31,637,223
==========
EQUITY CAPITAL
Perpetual preferred stock and related surplus................. 0
Common Stock.................................................. 29,931
Surplus....................................................... 360,717
Undivided profits and capital reserves/Net unrealized holding
gains (losses).............................................. 1,426,881
Cumulative foreign currency translation adjustments........... (4,015)
TOTAL EQUITY CAPITAL.......................................... 1,813,514
----------
TOTAL LIABILITIES AND EQUITY CAPITAL.......................... 33,450,737
==========
</TABLE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
