<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
March 4, 1999
--------------------
Date of Report
(Date of earliest event reported)
PUGET SOUND ENERGY, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Washington 1-4393 91-0374630
- -------------------------------- ---------------------- ----------------------------------
(State or other jurisdiction of (Commission File No.) (IRS Employer Identification No.)
incorporation)
</TABLE>
411 - 108th Avenue N.E.
Bellevue, Washington 98004-5515
- --------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
(425) 454-6363
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
On March 3, 1999, Puget Sound Energy, Inc. (the "Company") entered into a
Distribution Agreement relating to the issuance and sale by the Company from
time to time of up to $500,000,000 principal amount of Senior Medium-Term Notes,
Series B, due nine months or more from the date of issue (the "Senior Notes").
The Senior Notes are to be issued under and pursuant to an Indenture dated as of
December 1, 1997, as supplemented by a Second Supplemental Indenture thereto,
dated as of March 1, 1999, between the Company and State Street Bank and Trust
Company, as trustee.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Exhibit Number Description
-------------- -----------
1.1 Distribution Agreement, dated March 3, 1999, among the
Company, Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Salomon Smith Barney
Inc.
1.2 Terms Agreement, dated March 4, 1999, among the
Company, Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Salomon Smith Barney Inc.,
Chase Securities, Inc., CIBC Oppenheimer Corp., First
Chicago Capital Markets, Inc. and NationsBanc
Montgomery Securities LLC.
4.26 Second Supplemental Indenture, dated as of March 1,
1999, to Indenture dated as of December 1, 1997,
between the Company and State Street Bank and Trust
Company, defining the rights of the holders of the
Company's Senior Notes.
4.27 Seventy-Seventh Supplemental Indenture, dated as of
March 1, 1999, to Indenture dated as of June 2, 1924,
as supplemented and modified, between the Company and
State Street Bank and Trust Company, defining the
rights of the holders of the Company's First Mortgage
Bonds.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
PUGET SOUND ENERGY, INC.
Dated: March 4, 1998
By /s/ James W. Eldredge
-----------------------------------
James W. Eldredge
Corporate Secretary and Controller
3
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
1.1 Distribution Agreement, dated March 3, 1999, among the Company,
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Smith Barney Inc.
1.2 Terms Agreement, dated March 4, 1999, among the Company, Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon
Smith Barney Inc., Chase Securities, Inc., CIBC Oppenheimer Corp.,
First Chicago Capital Markets, Inc. and NationsBanc Montgomery
Securities LLC.
4.26 Second Supplemental Indenture, dated as of March 1, 1999, to Indenture
dated as of December 1, 1997, between the Company and State Street
Bank and Trust Company, defining the rights of the holders of the
Company's Senior Notes.
4.27 Seventy-Seventh Supplemental Indenture, dated as of March 1, 1999, to
Indenture dated as of June 2, 1924, as supplemented and modified,
between the Company and State Street Bank and Trust Company, defining
the rights of the holders of the Company's First Mortgage Bonds.
</TABLE>
4
<PAGE>
EXHIBIT 1.1
Puget Sound Energy, Inc.
Senior Medium Term Notes, Series B
DISTRIBUTION AGREEMENT
March 3, 1999
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
SALOMON SMITH BARNEY INC
c/o Merrill Lynch & Co.
World Financial Center
North Tower, 10th Floor
New York, New York 10281-1310
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 Salomon Smith Barney Inc (each, an "Agent", and
-----
collectively, the "Agents," which term shall also include any additional agents
------
named in any Terms Agreement (as defined herein)) with respect to the issue and
sale by the Company of its Senior Medium Term Notes, Series B, Due Nine Months
or More From Date of Issue (the "Notes"). The Notes are to be issued pursuant
-----
to an Indenture, dated as of December 1, 1997, as supplemented by a Second
Supplemental Indenture, dated as of March 1, 1999 (collectively, the
"Indenture"), between the Company and State Street Bank and Trust Company, 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
<PAGE>
pursuant to the terms of this Agreement. It is understood, however, that 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. 333-65053) 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
2
<PAGE>
(the "Rule 462(b) 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.
--------------------
(1) 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>
(2) 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.
(3) 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.
(4) 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 to deliver Notes to a purchaser whose offer has been solicited by
such Agent on an agency basis and accepted
4
<PAGE>
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.
(5) 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.
------------------------------
(1) 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:
-------------------
(1) Due Incorporation, Valid Existence and Due
-------------------------------------------
Qualification of the Company. The Company has been duly organized and is
----------------------------
validly existing as a corporation 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 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
5
<PAGE>
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").
-------- --------------
(2) 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).
(3) 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
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 prelim-
6
<PAGE>
inary 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.
(4) 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.
(5) Independent Accountants. The accountants who
-----------------------
certified the financial statements and any 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.
7
<PAGE>
(6) 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.
(7) 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
8
<PAGE>
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.
(8) 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) 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
9
<PAGE>
or incorporated by reference, as the case may be, as an exhibit to the
Registration Statement.
(10) 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.
(11) 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 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
10
<PAGE>
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.
(12) 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 in a Material Adverse
Effect.
(13) 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,
11
<PAGE>
"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.
(14) 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, 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,
12
<PAGE>
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.
(15) 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.
(16) Investment Company Act. The Company is 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").
--------
(17) Ratings. The Medium-Term Note Program under which
-------
the Notes are issued (the "Program"), as well as the Notes, are rated
-------
[Baa1]
13
<PAGE>
by Moody's Investors Service, Inc. and [A-] 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.
(2) Additional Certifications. Any certificate signed by any
-------------------------
officer of theCompany 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.
----------------------------------------------
(1) 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 the Agents and the Company as set forth in a
terms agreement between the Agents and the Company (the "Terms Agreement")
(which terms, unless otherwise agreed, shall, to the extent applicable, include
those terms specified in the form of such agreement attached as 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 Agreement" shall include the
applicable Terms Agreement or other 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 deal-
14
<PAGE>
ers. 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 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.
15
<PAGE>
(2) 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.
----------
(3) Administrative Procedures. The purchase price,
-------------------------
interest rate or formula, maturity date and other 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
16
<PAGE>
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:
(1) Notice of Certain Events. The Company will notify the
------------------------
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, (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 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 and (iv) the expected date
of any Substitution Date under the Indenture. 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.
(2) 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 (in-
17
<PAGE>
cluding 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.
(3) 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.
(4) Delivery of the Prospectus. The Company will deliver
---------------------------
to each Agent, without charge, as many 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.
(5) 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
18
<PAGE>
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.
(6) 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 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
19
<PAGE>
as to permit the completion of the distribution of each offering of Notes.
(7) 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.
(8) 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 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.
(9) 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.
20
<PAGE>
(10) 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.
(11) 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).
(12) 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.
(13) 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 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 war-
21
<PAGE>
ranties 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:
(1) 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.
(2) 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 Company. The favorable
----------------------------------
opinion of Perkins Coie LLP 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, relating to statements or omissions of material facts included in
the Registration Statement and the Prospectus.
(3) 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
22
<PAGE>
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.
(4) Comfort Letter of PricewaterhouseCoopers, LLP On
---------------------------------------------
the date hereof, the Agents shall have received a letter from
PricewaterhouseCoopers LLP, dated as of the date hereof and in form and
substance satisfactory to the Agents, to the effect set forth in Exhibit C
hereto.
(5) Additional Documents. On the date 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
23
<PAGE>
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 each Agent as follows:
(1) 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
24
<PAGE>
Statement and Prospectus as amended and supplemented to each such time).
(2) 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 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).
(3) 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
25
<PAGE>
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 LLP 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 amended and supplemented to
the time of delivery of such letter authorizing reliance).
(4) 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
PricewaterhouseCoopers LLP 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 Prospec-
26
<PAGE>
tus as amended and supplemented to the date of such letter.
8. Indemnification.
---------------
(1) 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:
(1) 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 were made, not misleading;
(2) 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
(3) 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 whatso-
27
<PAGE>
ever 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 contained in the Prospectus was corrected in the
Prospectus as supplemented.
(2) 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).
28
<PAGE>
(3) 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)
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.
29
<PAGE>
(4) 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 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 appli-
30
<PAGE>
cable 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.
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
31
<PAGE>
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:
(1) 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;
(2) The preparation, printing and delivery of this Agreement
and the Indenture;
(3) 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;
(4) 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;
(5) 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;
(6) The fees charged by nationally recognized statistical
rating organizations for the rating of the Program and the Notes;
(7) The fees and expenses incurred in connection with any
listing of Notes on a securities exchange;
(8) The filing fees incident to, and the reasonable fees and
disbursements of counsel to the
32
<PAGE>
Agents in connection with, the review, if any, by the National Association of
Securities Dealers, Inc. (the "NASD"); and
----
(9) Any advertising and other out-of-pocket expenses of the
Agents incurred with the approval of the Company.
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.
-----------
(1) 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.
(2) 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
33
<PAGE>
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 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.
(3) 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
34
<PAGE>
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.
(1)
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.
If to the Company:
Puget Sound Energy, Inc.
411-108th Avenue N.E.
Bellevue, Washington 98004-5515
Attention: Treasurer
Telecopy No.: (425) 462-3300
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
Salomon Smith Barney Inc
Seven World Trade Center
New York, NY 10048
Attention: Medium Term Note Department
Telecopy No.: (212) 783-2274
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
35
<PAGE>
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 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.
36
<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: /s/ Donald E. Gaines
--------------------
Name: Donald E. Gaines
Title: Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Scott Primrose
------------------------------
Authorized Signatory
SALOMON SMITH BARNEY INC
By: /s/ Kimberly Blue
------------------------------
Authorized Signatory
37
<PAGE>
EXHIBIT 1.2
Puget Sound Energy, Inc.
Senior Medium-Term Notes, Series B
Due 9 Months or More from Date of Issue
TERMS AGREEMENT
March 4, 1999
Puget Sound Energy, Inc.
411-108th Avenue N.W.
Bellevue, Washington 98004-5515
Attention: Treasurer
Subject in all respects to the terms and conditions of the Distribution
Agreement dated March 3, 1999 among Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Salomon Smith Barney Inc. and you (the
"Agreement"), the undersigned (collectively, the "Purchasers") agree to purchase
the Senior Medium Term Notes, Series B (the "Notes") described below of Puget
Sound Energy, Inc. (the "Company") for sale to investors or agree to arrange
for the sale of Notes by the Company directly to investors. All capitalized
terms not defined herein shall have the meanings ascribed to such terms in the
Agreement.
The Company hereby appoints each of NationsBanc Montgomery Securities LLC
("NationsBanc"), Chase Securities, Inc. ("Chase Securities"), CIBC Oppenheimer
Corp. ("CIBC") and First Chicago Capital Markets, Inc. ("First Chicago") and as
an agent under the Agreement in connection with the placement or purchase as
principal by each of them, in the respective amounts set forth on Annex B
hereto, of the Notes described herein and in the Company's Pricing Supplements,
<PAGE>
each dated March 4, 1999, to the Company's Prospectus dated October 14, 1998 and
the Company's Prospectus Supplement dated March 3, 1999.
The Company agrees that with respect to the Notes, each of Chase
Securities, CIBC, First Chicago and NationsBanc, shall be entitled to the
benefit of the representations and warranties, agreements and indemnities
(including contribution) as agreed to by the Company in favor of the Agents
named in the Agreement to the same extent as if each of Chase Securities, CIBC,
First Chicago and NationsBanc were named as Agents thereunder.
THE NOTES
---------
<TABLE>
<CAPTION>
10 Year Notes 30 Year Notes
<S> <C> <C>
Aggregate Principal Amount: $150,000,000 $100,000,000
Purchase Price: 99.875%-99.125% of 99.875%-99.125% of
Principal Amount Principal Amount
Priority: Senior Senior
Issue Price: 100% of Principal Amount 100% of Principal Amount
Currency or Currency Unit: United States Dollars United States Dollars
Interest Rate or Method of 6.46% per annum, 7.00% per annum,
Determining: accruing from March 9, accruing from March 9,
1999 1999
Date of Maturity: March 9, 2009 March 9, 2027
Interest Payment Dates: April 15 and October April 15 and October
15 of each year, except 15 of each year, except
as provided in the as provided in the
Pricing Supplement Pricing Supplement
Closing Date: March 9, 1999 March 9, 1999
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Method of Payment: Immediately available Immediately available
funds funds
Trustee, Paying Agent and State Street Bank and State Street Bank and
Authenticating Agent: Trust Company Trust Company
Modification, if any, in the Each of the documents Each of the documents
requirements to deliver the required to be required to be
documents specified in the delivered in accordance delivered in accordance
Distribution Agreement: with the Distribution with the Distribution
Agreement shall be Agreement shall be
dated as of, and dated as of, and
delivered to each delivered to each
Purchaser on the Purchaser on the
Closing Date Closing Date
Other terms: The Notes shall have The Notes shall have
such additional terms such additional terms
as are specified in the as are specified in the
form of Pricing form of Pricing
Supplement, attached Supplement, attached
hereto as Annex A-1 hereto as Annex A-2
Allocation among Purchasers: Each of the Purchasers Each of the Purchasers
severally agrees to severally agrees to
purchase the respective purchase the respective
principal amount of principal amount of
Notes set forth next to Notes set forth next to
its name in Annex B and its name in Annex B and
each Purchaser shall be each Purchaser shall be
entitled to the entitled to the
percentage of the total percentage of the total
underwriting discounts underwriting discounts
indicated in Annex B indicated in Annex B
Default of Purchasers: The provisions set The provisions set
forth in Annex C hereto forth in Annex C hereto
are incorporated herein are incorporated herein
by reference by reference
</TABLE>
<PAGE>
Unless otherwise agreed upon between one or more Agents acting as principal
and the Company, between the date of this Agreement and the Settlement Date, 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).
MERRILL LYNCH CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
SALOMON SMITH BARNEY INC.
NATIONSBANK MONTGOMERY
SECURITIES LLC
CHASE SECURITIES, INC.
CIBC OPPENHEIMER CORP.
FIRST CHICAGO CAPITAL MARKETS, INC.
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ Scott G. Primrose
---------------------------
Scott G. Primrose
Title: Authorized Signatory
Accepted:
PUGET SOUND ENERGY, INC.
By: /s/ Donald E. Gaines
---------------------
Donald E. Gaines
Treasurer
<PAGE>
EXHIBIT 4.26
SECOND SUPPLEMENTAL INDENTURE
FROM
PUGET SOUND ENERGY, INC.
TO
STATE STREET BANK AND TRUST COMPANY
TRUSTEE
______________
DATED AS OF MARCH 1, 1999
SUPPLEMENTAL TO INDENTURE
DATED AS OF DECEMBER 1, 1997
-1-
<PAGE>
This SECOND SUPPLEMENTAL INDENTURE is made as of the 1st day of March, by
and PUGET SOUND ENERGY, INC., a corporation duly organized and existing under
the laws of the State of Washington (the "Company"), and STATE STREET BANK AND
TRUST COMPANY, a bank and trust company organized and existing under the laws of
the Commonwealth of Massachusetts, as trustee (the "Trustee").
WITNESSETH: that
WHEREAS, the Company has heretofore executed and delivered its Indenture
(hereinafter referred to as the "Indenture"), made as of December 1, 1997; and
WHEREAS, Section 2.05 of the Indenture provides that Notes shall be issued
in series and that a Company Order shall specify the terms of each issue of
Notes; and
WHEREAS, Section 13.01 of the Indenture provides that the Company and the
Trustee may enter into indentures supplemental thereto for the purposes, among
others, of establishing the form of Notes or establishing or reflecting any
terms of any Note and adding to the covenants of the Company; and
WHEREAS, the Company has executed and delivered to the Trustee a First
Supplemental Indenture, dated December 1, 1997, providing for the creation of a
series of Notes designated "Senior Medium-Term Notes, Series A; and
WHEREAS, as of the date of this Supplemental Indenture, the Company has
issued the following series of Notes pursuant to its Indenture, as supplemented,
all of which remain outstanding:
<TABLE>
<CAPTION>
Principal Amount of Notes Series
- ------------------------------- --------------------------------
<S> <C>
Three Hundred Million Dollars Senior Medium-Term Notes,
($300,000,000) Senior A due December 1, 2027
Two Hundred Million Dollars Senior Medium-Term Notes,
($200,000,000) Series A due June 15, 2018
</TABLE>
WHEREAS, the Company desires to establish a series of Notes to be
designated "Senior Medium-Term Notes, Series B" (hereinafter sometimes referred
to as the "Series B Notes"); and
WHEREAS, the execution and delivery of this Second Supplemental Indenture
(herein, this "Supplemental Indenture") have been duly authorized by a
resolution adopted by the Board of Directors of the Company;
NOW, THEREFORE, this Supplemental Indenture
-2-
<PAGE>
WITNESSETH, that, in order to set forth the terms and conditions upon which
the Series A Notes are, and are to be, authenticated, issued and delivered, and
in consideration of the sum of one dollar duly paid to it by the Trustee at the
execution of this Supplemental 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
Series A Notes as follows:
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS
Section 1.1
This Supplemental Indenture constitutes an integral part of the Indenture.
Section 1.2
For all purposes of this Supplemental Indenture:
(a) Capitalized terms used but not otherwise defined herein shall have the
respective meanings assigned to such terms in the Indenture;
(b) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this Supplemental
Indenture; and
(c) The terms "hereof," "herein," "hereby," "hereto," "hereunder," and
"herewith" refer to this Supplemental Indenture.
ARTICLE TWO
SENIOR MEDIUM-TERM NOTES, SERIES B
There shall be hereby established a series of Notes, known as and entitled
"Senior Medium-Term Notes, Series B." The aggregate principal amount of the
Series B Notes shall not be limited and shall be initially authenticated and
delivered from time to time upon delivery to the Trustee of the documents
required by Section 2.05 of the Indenture, including, among other things, a
Company Order specifying the following with respect to each issue of the Series
B Notes: (i) any limitations on the aggregate principal amount of such issue of
Series B Notes, (ii) the Original Issue Date or Dates for such issue of Series B
Notes, (iii) the stated maturity of such issue of Series B Notes (provided that
no Senior Note shall mature on a date less than nine months from its Original
Issue Date), (iv) the interest rate or rates, or method of calculation of such
rate or rates, for such issue of Series B Notes, (v) the terms, if any,
regarding the optional or mandatory redemption of such issue of Series B 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
issue of Series B 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 issue of
Series B Notes shall be issued in whole or in part in the form of a Global Note
-3-
<PAGE>
and, if so, the Depository for such Global Note, (viii) the designation of such
issue of Series B Notes, (ix) if the form of such issue of Series B Notes is not
as described in Exhibit A, Exhibit B, Exhibit C or Exhibit D to the Indenture,
the form of such Series B Notes, (x) the maximum annual interest rate, if any,
of the Series B Notes permitted for such issue, (xi) any other information
necessary to complete the Series B 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 Series B Notes, (xiii) if on or after the Substitution Date, 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 of the
Indenture and (xv) any other terms of such series not inconsistent with the
Indenture or this Supplemental Indenture.
ARTICLE THREE
MISCELLANEOUS
Section 3.1
The Trustee has accepted the amendment of the Indenture effected by this
Supplemental Indenture and agrees to execute the trust created by the Indenture
as hereby amended, but only upon the terms and conditions set forth in the
Indenture, including the terms and provisions defining and limiting the
liabilities and responsibilities of the Trustee, and without limiting the
generality of the foregoing, the Trustee shall not be responsible in any manner
whatsoever for or with respect of any of the recitals or statements contained
herein, all of which recitals or statements are made solely by the Company, or
for or with respect to (a) the validity or sufficiency of this Supplemental
Indenture or any of the terms or provisions hereof, (b) the proper authorization
hereof by the Company by corporate action or otherwise, and (c) the due
execution hereof by the Company.
Section 3.2
This Supplemental Indenture shall be construed in connection with and as a
part of the Indenture.
Section 3.3
(a) If any provision of this Supplemental Indenture conflicts with another
provision of the Indenture required to be included in indentures qualified under
the Trust Indenture Act of 1939 (as enacted prior to the date of this
Supplemental Indenture) by any of the provisions of Section 310 to 317,
inclusive, of said act, such required provision shall control.
(b) In case any one or more of the provisions contained in this
Supplemental Indenture or in the Series B Notes issued hereunder should be
invalid, illegal, or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected, impaired, prejudiced or disturbed thereby.
-4-
<PAGE>
Section 3.4
Whenever in this Supplemental Indenture either of the parties hereto is
named or referred to, this shall be deemed to include the successors or assigns
of such party, and all the covenants and agreements contained in this
Supplemental Indenture by or on behalf of the Company or by or on behalf of the
Trustee shall bind and inure to the benefit of the respective successors and
assigns of such parties, whether so expressed or not.
Section 3.5
(a) This Supplemental Indenture may be simultaneously executed in several
counterparts, and all such counterparts executed and delivered, each as an
original, shall constitute but one and the same instrument.
(b) The descriptive headings of the several Articles of this Supplemental
Indenture were formulated, used and inserted in this Supplemental Indenture for
convenience only and shall not be deemed to affect the meaning or construction
of any of the provisions hereof.
[The remainder of this page intentionally left blank]
-5-
<PAGE>
IN WITNESS WHEREOF, PUGET SOUND ENERGY, INC. has caused this Supplemental
Indenture to be signed by its President, a Vice President or its Treasurer or
Assistant Treasurer, and attested by its Secretary or an Assistant Secretary and
STATE STREET BANK AND TRUST COMPANY, has caused this Supplemental Indenture to
be signed by its President or a Vice President, and attested by a Vice
President, as of March 1, 1999.
PUGET SOUND ENERGY, INC.
By: /s/ Donald E. Gaines
------------------------------
Donald E. Gaines
Treasurer
ATTEST:
/s/ James W. Eldredge
- ---------------------------
Secretary
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ James E. Mogavero
------------------------------
James E. Mogavero
Vice President
ATTEST:
/s/ unintelligible
- ---------------------------
Authorized Officer
-6-
<PAGE>
Exhibit 4.27
- -------------------------------------------------------------------------------
(Real Estate Mortgage)
PUGET SOUND ENERGY, INC.
TO
STATE STREET BANK AND
TRUST COMPANY,
Trustee
_______________
Seventy-Seventh Supplemental Indenture
Dated as of March 1, 1999
_______________
Relating to First Mortgage Bonds,
Pledged Series B due Nine Months or More From Date of Issue
_______________
Supplemental to Indenture dated as of
June 2, 1924, as supplemented and modified
_______________
- -------------------------------------------------------------------------------
(NOT PART OF INDENTURE)
<PAGE>
ANY WRITING, TEXT, INTIALS, REVISIONS OR NOTARY SEAL APPEARING OUTSIDE THESE
MARGINS MAY DISQUALIFY THIS DOCUMENT FOR RECORDING
THIS SEVENTY-SEVENTH SUPPLEMENTAL INDENTURE, made as of the 1st day of
March, 1999, by and between Puget Sound Energy, Inc., formerly Puget Sound
Power & Light Company, a corporation duly organized and existing under and by
virtue of the laws of the State of Washington (hereinafter sometimes called the
"Company"), party of the first part, and State Street Bank and Trust Company, a
Massachusetts bank and trust company with its principal corporate trust office
at Two International Place, in the city of Boston and Commonwealth of
Massachusetts 02110 (successor to Old Colony Trust Company) (hereinafter
sometimes called the "Trustee"), as Trustee under the First Mortgage
(originally, and before modification thereof by certain supplemental
indentures, called "First and Refunding Mortgage") from Puget Sound Power &
Light Company, a Massachusetts corporation (hereinafter sometimes called the
"Predecessor Company"), dated as of June 2, 1924 (said Mortgage being
hereinafter sometimes called the "Original Mortgage"), as supplemented and
modified by all indentures supplemental thereto heretofore executed and
delivered, party of the second part;
WITNESSETH: that
WHEREAS, the Predecessor Company did by the Original Mortgage, filed for
record in the offices of the Auditors of the Counties of Chelan, Clallam,
Cowlitz, Douglas, Grant, Grays Harbor, Island, Jefferson, King, Kitsap,
Kittitas, Lewis, Mason, Pacific, Pierce, Skagit, Snohomish, Thurston and
Whatcom, all in the State of Washington, and left on file as a chattel mortgage
in each of said counties, convey and pledge certain property therein described
to Old Colony Trust Company, as Trustee, to be held upon the trusts expressed
in the Original Mortgage to equally secure an unlimited authorized amount of
mortgage bonds (therein and herein called the "Bonds") issued or to be issued
in one or more series, all as more fully provided in the Original Mortgage; and
WHEREAS, the Predecessor Company, prior to September 1, 1954, had executed
and delivered to the Trustee thirty-nine supplemental indentures, supplementing
and in certain respects modifying the Original Mortgage and providing for the
execution, certification and delivery of Bonds of various series from time to
time pursuant thereto (which Original Mortgage, as so supplemented and
modified, is therein and herein sometimes called the "First Mortgage"); and
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WHEREAS, the Predecessor Company executed and delivered to the Trustee a
Fortieth Supplemental Indenture, dated as of September 1, 1954, which
Supplemental Indenture is divided into two parts, designated as Part I and Part
II, and Part I thereof provided for the establishment and the execution,
certification and delivery initially of Twenty-Five Million Dollars
($25,000,000) principal amount of a series of Bonds, designated as First
Mortgage Bonds, 3-1/2% Series due 1984, and contained certain covenants,
restrictions, conditions and provisions affecting, and provided for certain
modifications of, the First Mortgage (the First Mortgage, as so supplemented
and modified by said Part I, being sometimes in said Fortieth Supplemental
Indenture and herein called the "Revised First Mortgage") and Part II thereof
provided for modifications of the Revised First Mortgage as therein set forth,
which modifications became effective on October 20, 1955 (the Revised First
Mortgage as so modified by Part II of the Fortieth Supplemental Indenture as
heretofore, hereby, and hereafter supplemented and modified being sometimes in
said Part II and herein called the "Indenture" and references herein to
Sections, Articles or other provisions of the Indenture being to the revised or
modified provisions thereof as set forth in Part II of the Fortieth
Supplemental Indenture); and
WHEREAS, the Predecessor Company has heretofore executed and delivered to
the Trustee a Forty-First Supplemental Indenture dated as of December 1, 1954,
a Forty-Second Supplemental Indenture dated as of July 1, 1957, a Forty-Third
Supplemental Indenture dated as of May 1, 1958, a Forty-Fourth Supplemental
Indenture dated as of November l, 1959, and a Forty-Fifth Supplemental
Indenture dated as of April 1, 1960, all of which mortgaged, pledged, assigned,
conveyed and transferred to the Trustee and subjected to the lien of the
Indenture additional property acquired or constructed, and betterments,
improvements and additions made to the mortgaged property, since the execution
and delivery of the Fortieth Supplemental Indenture; and
WHEREAS, the Company has executed and delivered to the Trustee a Forty-
Sixth Supplemental Indenture dated as of November 10, 1960, whereby the Company
has succeeded to the Predecessor Company with the same effect as if the Company
had been named in the Indenture as the mortgagor company and in the Bonds and
coupons as the obligor thereon or maker thereof, and the Predecessor Company
merged into the Company on November 16, 1960, whereupon the Company acquired
all the property, real, personal or mixed, including all rights,
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privileges, easements, licenses and franchises, described in the Indenture and
thereby conveyed and mortgaged or intended so to be, including also all such
property acquired by the Predecessor Company since the execution and delivery
of the Original Mortgage, which by the terms of the Indenture is subjected or
intended to be subjected to the lien thereof; and
WHEREAS, the Company has executed and delivered to the Trustee the
supplemental indentures set forth herein:
<TABLE>
<CAPTION>
Supplemental Indenture Dated as of
------------------------------------- -------------------
<S> <C>
Forty-Seventh Supplemental Indenture February 1, 1961
Forty-Eighth Supplemental Indenture November 1, 1963
Forty-Ninth Supplemental Indenture May 1, 1964
Fiftieth Supplemental Indenture January 1, 1966
Fifty-First Supplemental Indenture June 1, 1967
Fifty-Second Supplemental Indenture February 1, 1969
Fifty-Third Supplemental Indenture July 1, 1970
Fifty-Fourth Supplemental Indenture October 1, 1972
Fifty-Fifth Supplemental Indenture March 1, 1974
Fifty-Sixth Supplemental Indenture November 1, 1974
Fifty-Seventh Supplemental Indenture August 1, 1975
Fifty-Eighth Supplemental Indenture October 1, 1976
Fifty-Ninth Supplemental Indenture July 1, 1978
Sixtieth Supplemental Indenture December 1, 1979
Sixty-First Supplemental Indenture December 1, 1981
Sixty-Second Supplemental Indenture July 1, 1984
Sixty-Third Supplemental Indenture January 1, 1986
Sixty-Fourth Supplemental Indenture April 1, 1986
Sixty-Fifth Supplemental Indenture April 1, 1986
Sixty-Sixth Supplemental Indenture August 1, 1986
Sixty-Seventh Supplemental Indenture November 1, 1986
Sixty-Eighth Supplemental Indenture September 1, 1987
Sixty-Ninth Supplemental Indenture February 1, 1990
Seventieth Supplemental Indenture October 1, 1990
Seventy-First Supplemental Indenture May 1, 1991
</TABLE>
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MARGINS MAY DISQUALIFY THIS DOCUMENT FOR RECORDING
<TABLE>
<CAPTION>
<S> <C>
Seventy-Second Supplemental Indenture August 1, 1991
Seventy-Third Supplemental Indenture March 1, 1992
Seventy-Fourth Supplemental Indenture October 1, 1992
Seventy-Fifth Supplemental Indenture April 1, 1993
Seventy-Sixth Supplemental Indenture December 1, 1997
</TABLE>
all of which mortgaged, pledged, assigned, conveyed and transferred to the
Trustee and subjected to the lien of the Indenture additional property acquired
or constructed, and betterments, improvements and additions made to the
mortgaged property since the execution and delivery of the Fortieth
Supplemental Indenture; and
WHEREAS, all Bonds of any series heretofore executed, authenticated and
delivered pursuant to the Original Mortgage, as from time to time supplemented
and modified, have been retired and canceled or payment duly and irrevocably
provided for, except for the series set forth herein:
<TABLE>
<CAPTION>
Principal Amount of Bonds Series
- ---------------------------------------- -----------------------------------
<C> <S>
Twenty-Seven Million 7.05% Series due August 1, 2021
Five Hundred Thousand Dollars
($27,500,000)
Twenty-Three Million 7.25% Series due August 1, 2021
Four-Hundred Thousand Dollars
($23,400,000)
Twenty-Five Million Dollars Secured Medium-Term Notes, Series
($25,000,000) A due November 30, 2006
One Hundred Million Dollars Secured Medium-Term Notes, Series
($100,000,000) A due February 1, 2007
Eighty-Seven Million 6.80% Series due March 1, 2022
Five Hundred Thousand Dollars
($87,500,000)
</TABLE>
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<TABLE>
<CAPTION>
Principal Amount of Bonds Series
- ------------------------- ------
<S> <C>
Five Million Dollars Secured Medium-Term Notes, Series
($5,000,000) A due April 9, 2012
Ten Million Dollars Secured Medium-Term Notes, Series
($10,000,000) A due May 7, 2007
Thirty Million Dollars Secured Medium-Term Notes, Series
($30,000,000) A due May 29, 2002
Forty-Six Million Dollars Secured Medium-Term Notes, Series
($46,000,000) A due June 19, 2006
Twenty-Seven Million Dollars Secured Medium-Term Notes, Series
($27,000,000) A due August 28, 2002
Five Million Dollars Secured Medium-Term Notes, Series
($5,000,000) A due September 11, 2002
Ten Million Dollars Secured Medium-Term Notes, Series
($10,000,000) A due September 15, 1999
Sixteen Million Secured Medium-Term Notes, Series
Five Hundred Thousand Dollars A due September 14, 1999
($16,500,000)
Twenty Million Secured Medium-Term Notes, Series
Five Hundred Thousand Dollars A due September 16, 1999
($20,500,000)
Fifty Million Dollars Secured Medium-Term Notes, Series
($50,000,000) B due December 10, 1999
</TABLE>
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<TABLE>
<CAPTION>
Principal Amount of Bonds Series
- ------------------------- ------
<S> <C>
Twenty-Five Million Dollars Secured Medium-Term Notes, Series
($25,000,000) B due December 10, 2002
Fifty Million Dollars Secured Medium-Term Notes, Series
($50,000,000) B due December 10, 2004
Thirty Million Dollars Secured Medium-Term Notes, Series
($30,000,000) B due December 21, 2012
Ten Million Dollars Secured Medium-Term Notes, Series
($10,000,000) B due February 9, 2000
Thirty Million Dollars Secured Medium-Term Notes, Series
($30,000,000) B due February 10, 2003
Three Million Dollars Secured Medium-Term Notes,
($3,000,000) Series B due December 1, 2003
Eleven Million Dollars Secured Medium-Term Notes,
($11,000,000) Series B due December 2, 2003
Thirty Million Dollars Secured Medium-Term Notes,
($30,000,000) Series B due May 27, 2004
Twenty-Three Million Four 5.875% Series due March 1, 2020
Hundred sixty Thousand Dollars
($23,460,000)
</TABLE>
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<TABLE>
<CAPTION>
Principal Amount of Bonds Series
- ------------------------- ------
<S> <C>
Fifty-Five Million Dollars Secured Medium-Term Notes,
($55,000,000) Series B due February 1, 2024
Three Hundred Million Dollars First Mortgage Bonds,
($300,000,000) Pledged Series A due December 1,
2027
Two Hundred Million Dollars First Mortgage Bonds,
($200,000,000) Pledged Series A due June 15, 2018
</TABLE>
which Bonds are now outstanding and constitute the only Bonds of the Company
outstanding under the Indenture; and
WHEREAS, effective as of the opening of business on January 4, 1971, The
First National Bank of Boston succeeded Old Colony Trust Company as Trustee
under the Indenture by reason of the merger of Old Colony Trust Company into
The First National Bank of Boston; and
WHEREAS, effective as of October 2, 1995, State Street Bank and Trust
Company succeeded The First National Bank of Boston as Trustee under the
Indenture; and
WHEREAS, the Company has entered into an Indenture (the "Debenture
Indenture") dated as of December 1, 1997 with State Street Bank and Trust
Company as trustee (in such capacity, the "Debenture Indenture Trustee")
pursuant to which the Company proposes to issue from time to time its Senior
Notes (the "Senior Notes") and the Company has agreed to make certain payments
to the Debenture Indenture Trustee in respect of the principal of, premium, if
any, and interest on such Senior Notes; and
WHEREAS, in order to secure the payment and performance of its obligations
under such Debenture Indenture, the Company has agreed to create new Bonds from
time to time with substantially the same terms as the Senior Notes; to
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issue and deliver such Bonds to the Debenture Indenture Trustee in trust for
the benefit of the owners from time to time of the Senior Notes; and
WHEREAS, the Board of Directors of the Company has established a new
series of Bonds to be designated as "First Mortgage Bonds, Pledged Series B,"
due Nine Months or More From Date of Issue (hereinafter sometimes called "Bonds
of the New Series"), and has authorized an issue of Five Hundred Million
Dollars ($500,000,000) principal amount thereof, and the Company has complied
or will comply with all provisions required to issue additional Bonds provided
for in the Indenture; and
WHEREAS, the Company desires to execute and deliver this Seventy-Seventh
Supplemental Indenture, in accordance with the provisions of the Indenture, for
the purpose of providing for the creation of the Bonds of the New Series,
designating such series to be created and specifying the form and provisions of
the Bonds of the New Series; and
WHEREAS, all things necessary have been done to authorize the execution,
delivery and recording of these presents validly to secure the payment of the
principal of and interest on the issue of Five Hundred Million Dollars
($500,000,000) principal amount of Bonds of the New Series, and to make such
Bonds, when executed by the Company, authenticated and delivered by the Trustee
and duly issued, the valid and binding legal obligations of the Company, and to
constitute the Indenture a valid and binding mortgage for the security of all
the Bonds in accordance with its and their terms;
NOW, THEREFORE, this Seventy-Seventh Supplemental Indenture
WITNESSETH, that, pursuant to and in execution of the powers, authorities
and obligations conferred, imposed and reserved in the Indenture, and pursuant
to and in execution of every other power, authority and obligation thereto
appertaining and/or enabling, in order to secure the payment of the principal
of, and the premium, if any, and interest on, the Bonds of the New Series
issued and to be issued under this Seventy-Seventh Supplemental Indenture, and
secured thereby and hereby at any time outstanding according to their tenor and
effect, and the performance of all the covenants and conditions therein and
herein and in said Bonds of the New Series contained, and for the purpose of
confirming the lien of the Indenture, said Puget
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Sound Energy, Inc., organized and existing under the laws of the State of
Washington, in consideration of the premises and of One Dollar ($1.00) and
other good and valuable consideration to it duly paid by the Trustee, at or
before the execution and delivery of these presents, the receipt whereof is
hereby acknowledged, has granted, bargained, sold, conveyed, transferred,
assigned, remised, released, mortgaged, set over and confirmed and by these
presents does grant, bargain, sell, convey, transfer, assign, remise, release,
mortgage, set over and confirm unto State Street Bank and Trust Company, as
Trustee, and to its successor or successors in the trust created by the
Indenture, and to said Trustee and its assigns, for the uses and purposes
created by the Indenture, all property, real, personal or mixed, including all
rights, privileges, easements, licenses and franchises, described in the
Indenture (including all property described in the documents attached to the
Company's financing statement filed on June 3, 1997, pursuant to the Uniform
Commercial Code of the State of Washington, file number 97-154-0077) and
thereby conveyed and mortgaged or intended so to be, including also all such
property acquired by the Company since the execution and delivery of the
Original Mortgage, which by the terms of the Indenture is subjected or intended
to be subjected to the lien thereof, and including also all such property as
the Company may hereafter acquire which by the terms of the Indenture is
subjected or intended to be subjected to the lien thereof, excepting from the
foregoing, however, all property included within the foregoing general
description, whether now owned or hereafter acquired, which by the provisions
of the Indenture is excepted or to be excepted from the conveyance and lien of
the Indenture, or which has heretofore been released from the lien of the
Indenture or otherwise disposed of by the Company free from the lien of the
Indenture in accordance with the provisions thereof;
TO HAVE AND TO HOLD all and singular the said property, and also all other
property and interest of any kind and of every nature that, by virtue of any
provision hereof or of the Indenture or otherwise, has or shall hereafter
become subject to the Indenture, to the Trustee, its successor or successors
and assigns;
BUT IN TRUST NEVERTHELESS, for the equal and proportionate benefit and
security (except as otherwise expressly provided) of all present and future
holders of the Bonds of the New Series issued and to be issued under and
secured by this Seventy-Seventh Supplemental Indenture, and to secure the
payment of such Bonds of the New Series and the interest thereon, prior to the
Substitution Date (as defined
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herein), in accordance with the provisions of said Bonds of the New Series and
of this Seventy-Seventh Supplemental Indenture, without priority or distinction
as to lien or otherwise of any Bonds of the New Series over any other Bonds of
the New Series so that, except as otherwise expressly provided, the principal
of, and the premium, if any, and interest on, every such Bond shall be equally
and proportionately secured by this Seventy-Seventh Supplemental Indenture, and
to secure the performance of and compliance with the covenants and conditions
of this Seventy-Seventh Supplemental Indenture, pursuant to and under and
subject to the provisions and conditions and for the uses hereinafter and in
this Seventy-Seventh Supplemental Indenture set forth; provided, however, that
on the Substitution Date, the Bonds of the New Series will cease to secure the
Senior Notes, and, at the option of the Company, the Senior Notes either (i)
will become unsecured general obligations of the Company or (ii) will be
secured by first mortgage bonds issued under another mortgage indenture; it
being hereby agreed as follows, to wit:
ARTICLE ONE
BONDS OF THE NEW SERIES AND CERTAIN
PROVISIONS RELATING THERETO
SECTION 1.01
A. Terms of Bonds of the New Series
There shall be hereby established a series of bonds, known as and entitled
"First Mortgage Bonds, Pledged Series B" (herein referred to as the "Bonds of
the New Series"). The aggregate principal amount of the Bonds of the New
Series shall be limited to Five Hundred Million Dollars ($500,000,000) to be
initially authenticated and delivered from time to time upon delivery to the
Trustee of the documents required by the Indenture, including a resolution of
the Board of Directors, or the Securities Pricing Committee of such Board of
Directors, of the Company specifying the following with respect to each issue
of the Bonds of the New Series: (i) any limitations (in addition to the
limitation with respect to the aggregate principal amount of all Bonds of the
New Series) on the aggregate principal amount of such issue of Bonds of the New
Series, (ii) the Original Issue Date (as defined below) or Dates for such issue
of Bonds of the New Series, (iii) the stated maturity of such issue of Bonds of
the New Series (provided that no Bond of the New Series shall mature on
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a date less than nine months from its Original Issue Date), (iv) the interest
rate or rates, or method of calculation of such rate or rates, for such issue
of Bonds of the New Series, (v) the terms, if any, regarding the optional or
mandatory redemption of such issue of Bonds of the New Series, 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 issue of Bonds of
the New Series shall be entitled to the benefit of any sinking fund, and the
terms, if any, of such sinking fund, (vii) the designation of such issue of
Bonds of the New Series, (viii) if the form of such Bonds of the New Series is
not as described herein, the form of such Bonds of the New Series, (ix) the
maximum annual interest rate, if any, of the Bonds of the New Series permitted
for such issue, (x) any other information necessary to complete the Bonds of
the New Series of such issue and (xi) any other terms of such issue not
inconsistent with the Indenture or this Seventy-Seventh Supplemental Indenture.
The definitive Bonds of the New Series 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 a resolution of the
Board of Directors or the Securities Pricing Committee of the Board of
Directors.
Both principal of and interest on the Bonds of the New Series (and
premium, if any) are to be paid in any coin or currency of the United States of
America which at the time of payment is legal tender for the payment of public
and private debts at the principal corporate trust office, in the City of
Boston, Massachusetts, of the Trustee.
The definitive Bonds of the New Series may, at the option of the Company,
be fully engraved or printed or lithographed on steel engraved borders.
Notwithstanding any provision in the Indenture to the contrary, each Bond
of the New Series shall be dated and issued as of the date of its
authentication by the Trustee (the "Original Issue Date"). Each Bond of the
New Series shall bear interest from the later of its Original Issue Date or the
most recent date to which interest has been paid or duly provided for with
respect to such Bond of the New Series until the principal of such Bond of the
New Series is paid or made available for payment, and interest on each Bond of
the New Series shall be payable on each interest payment date after the
Original Issue Date.
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Notwithstanding any provision in the Indenture to the contrary, the person
in whose name any Bond of the New Series is registered at the close of business
on any record date (as determined by the Board of Directors or the Securities
Pricing Committee of the Board of Directors) with respect to any interest
payment date for such Bond of the New Series shall be entitled to receive the
interest payable on such interest payment date notwithstanding the cancellation
of such Bond of the New Series upon any registration of transfer, exchange or
substitution thereof subsequent to such record date and prior to such interest
payment date, except that, if and to the extent that the Company shall default
in the payment of the interest due on such interest payment date, then the
registered holders of Bonds of the New Series on such record date shall have no
further right to or claim in respect of such defaulted interest as such
registered holders on such record date, and the persons entitled to receive
payment of any defaulted interest thereafter payable or paid on any Bonds of
the New Series shall be the registered holders of such Bonds of the New Series
on the record date for payment of such defaulted interest. Unless otherwise
determined by the Board of Directors or the Securities Pricing Committee of the
Board of Directors, the term "record date" as used in this Section 1.01, and in
the form of the Bonds of the New Series, with respect to any interest payment
date applicable to any Bond of the New Series, shall mean 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 Bond of the New Series, in which
event the record date shall be the date of maturity of such Bond of the New
Series.
In case of failure by the Company to pay any interest when due, the claim
for such interest shall be deemed to have been transferred by transfer of any
Bond of the New Series registered on the books of the Company, and the Company,
by not less than 10 days' written notice to the bondholders, may fix a
subsequent record date, not more than 15 days or less than 10 days prior to the
date fixed for the payment of such interest, for determination of the holders
entitled to payment of such interest. Such provision for establishment of a
subsequent record date, however, shall in no way affect the rights of the
bondholders or of the Trustee consequent on any default.
The Trustee hereunder shall, by virtue of its office as such Trustee, be
the registrar and transfer agent of the Company for the purpose of registering
and transferring Bonds of the New Series; however, the Company may also act as
the registrar and transfer agent in lieu of the Trustee. Notwithstanding any
provision in the Indenture to the contrary, neither the Company nor the Trustee
shall be required to
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make transfers or exchanges of Bonds of the New Series for a period of 15 days
next preceding any designation of Bonds of the New Series to be redeemed, and
neither the Company nor the Trustee shall be required to make transfers or
exchanges of any Bonds designated in whole for redemption or that part of any
Bond designated in part for redemption.
Notwithstanding any other provision of the Indenture to the contrary, the
Company shall receive a credit against its obligations to make any payment in
respect of the principal of, or premium, if any, or interest on, any Bond of
the New Series (whether at maturity, upon redemption or otherwise), and such
obligations shall 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, or premium, if any, or interest on, the Senior Notes
initially issued contemporaneously with such Bond of the New Series shall have
been fully or partially paid or there shall have been deposited with the
Debenture Indenture Trustee pursuant to the Debenture Indenture sufficient
available funds to fully or partially pay the then due principal of, or
premium, if any, or interest on, such Senior Notes. The obligations of the
Company hereunder to make such payment of principal of, premium, if any, or
interest on, such Bond of the New Series shall be deemed to have been reduced
by the amount of such credit.
The Debenture Indenture requires that if any Senior Note in respect of
which this Bond was delivered to the Debenture Indenture Trustee pursuant to
the Debenture Indenture is deemed paid and discharged pursuant to Section 5.01
of the Debenture Indenture, the obligation of the Company to make payment with
respect to the principal of and premium, if any, and interest on this Bond
shall be satisfied and discharged and this Bond shall cease to secure such
Senior Note in any manner and, the Debenture Indenture Trustee shall surrender
this Bond, subject to the limitations of the Debenture Indenture, to the
Company for cancellation.
The Bonds of the New Series shall be issued and delivered pursuant to the
Debenture Indenture to, registered in the name of and held by the Debenture
Indenture Trustee in trust for the benefit of the owners from time to time of
the Senior Notes. The Debenture Indenture Trustee shall not sell, assign or
transfer any of the Bonds of the New Series except to a successor trustee under
the Debenture Indenture. The Company may take such actions as it shall deem
desirable to effect
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compliance with such restrictions on transfer, including the placing of an
appropriate legend on the Bonds of the New Series.
B. Form of Bonds of the New Series
The Bonds of the New Series, and the Trustee's authentication certificate
to be executed on the Bonds of the New Series, shall be in substantially the
following forms respectively:
[FORM OF FACE OF BOND OF THE NEW SERIES]
REGISTERED
$___________
No.-----------------------
PUGET SOUND ENERGY, INC.
FIRST MORTGAGE BOND, PLEDGED SERIES B
<TABLE>
<CAPTION>
<S> <C> <C>
Original Issue Date: Interest Rate: Maturity Date:
__________________ ______________% _________________
Initial Redemption Initial Redemption Annual Redemption
Date: Percentage: Percentage Reduction:
__________________ _______________ _________________
</TABLE>
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
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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 be paid to the person in whose name this Bond
is registered (the "Holder") 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 Bond, 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. 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 Bond 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 the Holder not more than 15 days nor fewer than 10
days prior to such Special Record Date.
Both principal of and interest on this Bond (and premium, if any) are to
be paid in any coin or currency of the United States of America which at the
time of payment is legal tender for the payment of public and private debts at
the principal corporate trust office, in the City of Boston, Massachusetts, of
the Trustee.
If any Interest Payment Date or the date on which the principal of this
Bond 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 Bond 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 Bond is required to be paid.
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"Business Day" means 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 Debenture Indenture Trustee (as defined on the reverse
hereof) is located, are obligated or authorized by law or executive order to
close.
This Bond shall not become obligatory for any purpose or be entitled to
any security or benefit under said Indenture until the authentication
certificate hereon shall have been signed by the Trustee.
The provisions of this Bond are continued on the reverse hereof and such
continued provisions shall for all purposes have the same effect as though
fully set forth at this place.
IN WITNESS WHEREOF, PUGET SOUND ENERGY, INC. has caused these presents to
be executed in its corporate name and behalf by the facsimile of the signature
of its President or one of its Vice Presidents and by the facsimile of the
signature of its Treasurer or an Assistant Treasurer or its Secretary,
thereunto duly authorized, and its corporate seal or a facsimile thereof to be
hereto affixed.
PUGET SOUND ENERGY, INC.
Dated:____________________
By _________________________
Its _________________________
And by ______________________
Its _________________________
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[FORM OF REVERSE OF BOND OF THE NEW SERIES]
PUGET SOUND ENERGY, INC.
First Mortgage Bond, Pledged Series B
This Bond is one of the Bonds of the above-designated series, of an
unlimited authorized amount of Bonds of the Company known as First Mortgage
Bonds, all issued or to be issued in one or more series under and secured by a
First Mortgage dated as of June 2, 1924, executed and delivered by the Company
to Old Colony Trust Company (State Street Bank and Trust Company, successor) as
Trustee, as supplemented and/or modified by indentures supplemental thereto,
including particularly the Fortieth Supplemental Indenture, dated as of
September 1, 1954, in Part II of which are set forth the revised provisions of
said First Mortgage as theretofore and then supplemented and modified, and the
Seventy-Seventh Supplemental Indenture dated as of March 1, 1999, relating,
among other things, to the Bonds of the above-designated series, and by all
other instruments supplemental thereto (herein sometimes called the
"Indenture"), reference to each and all of which is hereby made for a
description of the property mortgaged and pledged as security for said Bonds,
the rights and remedies of the Holder of this Bond in regard thereto, and the
terms and conditions upon which Bonds may be issued.
The Bonds of this series 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 a resolution of the Board of
Directors or the Securities Pricing Committee of the Board of Directors.
This Bond is issued to secure the payment and performance of the Company's
obligations under the Indenture, dated as of December 1, 1997 (the "Debenture
Indenture"), with State Street Bank and Trust Company, as Trustee (the
"Debenture Indenture Trustee") to make payments in respect of the principal of,
premium, if any, and interest on Senior Notes of the Company (the "Senior
Notes") initially issued contemporaneously with this Bond.
Notwithstanding any other provision of the Indenture to the contrary, the
Company shall receive a credit against its obligations to make any payment in
respect of the principal of, or premium, if any, or interest on, this Bond
(whether at
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maturity, upon redemption or otherwise), and such obligations shall
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, or premium, if any, or interest on, the Senior Notes of the
Company initially issued contemporaneously with this Bond shall have been fully
or partially paid or there shall have been deposited with the Debenture
Indenture Trustee pursuant to the Debenture Indenture sufficient available
funds to fully or partially pay the then due principal of, or premium, if any,
or interest on, such Senior Notes. The obligations of the Company to make such
payment of principal of, premium, if any, or interest on, this Bond shall be
deemed to have been reduced by the amount of such credit.
This Bond is not transferable except as required to effect transfer to any
successor trustee under the Debenture Indenture.
As provided in the Seventy-Seventh Supplemental Indenture, the Holder of
this Bond, by his acceptance hereof, hereby consents, and all other holders of
the Bonds of the above designated series, by their acceptance thereof, shall
thereby consent, for the purpose and within the meaning of Section 18.02 of the
Indenture, to a modification of the Indenture to redefine the term "minimum
provision for depreciation" by deducting from operating revenues the cost of
fuel used in the generation of electricity. This modification shall become
effective without any further approval or consent of the holder of this Bond
when a further supplemental indenture has been executed with the requisite
consents of the holders of the Bonds of each other series then outstanding or
when Bonds of all series issued prior to the First Mortgage Bonds, 12-5/8%
Series due 1999 have ceased to be outstanding.
This Bond is subject to redemption at the option of the Company on any
date on and after the Initial Redemption Date, if any, specified on the face
hereof (any date fixed for redemption shall hereafter be referred to as a
"Redemption Date"). If no Initial Redemption Date is set forth on the face
hereof, this Bond may not be redeemed at the option of the Company prior to the
Maturity Date specified on the face hereof. On and after the Initial
Redemption Date, if any, this Bond may be redeemed at any time in whole or from
time to time in part at the option of the Company at the applicable Redemption
Price (as defined below) together with interest thereon payable to the
Redemption Date, on notice given not less than 30 days nor more than 60 days
prior to the Redemption Date. In the event of redemption of this
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Bond in part only, a new Bond of like tenor and series for the unredeemed
portion hereof shall be issued in the name of the Holder hereof upon the
surrender hereof.
If this Bond is redeemable in the foregoing manner at the option of the
Company, the "Redemption Price" shall initially be the Initial Redemption
Percentage, specified on the face hereof, of the principal amount of this Bond
to be redeemed and shall decline at each anniversary of the Initial Redemption
Date by the Annual Redemption Percentage Reduction, if any, specified on the
face hereof, of the principal amount to be redeemed until the Redemption Price
is 100% of such principal amount.
If this Bond or any portion hereof ($1,000 or any multiple thereof) is
duly designated for redemption, if payment of the principal hereof or of such
portion, together with accrued interest and premium, if any, is irrevocably
provided for, and if notice of such redemption shall have been duly given, this
Bond shall cease to be entitled to the lien of the Indenture from and after the
date such payment is irrevocably so provided for and shall cease to bear
interest from and after the date fixed for redemption.
The Indenture provides that (1) the Company and the Trustee, with the
consent of the holders of not less than 66-2/3% in principal amount of the
Bonds at the time outstanding (determined as provided in the Indenture)
including, if more than one series of Bonds shall be at the time outstanding,
not less than 66-2/3% in principal amount of the Bonds at the time outstanding
of each series affected, may effect, by an indenture supplemental to the
Indenture, further modifications or alterations of the Indenture and of the
rights and obligations of the Company and of the holders of the Bonds;
provided, however, that no such modification or alteration shall be made
without the consent of the registered owner hereof which will (a) extend the
maturity of this Bond or reduce the rate or extend the time of payment of
interest hereon or reduce the amount of the principal hereof or reduce any
premium payable on the redemption hereof, or (b) permit the creation of any
lien, not otherwise permitted, prior to or on a parity with the lien of the
Indenture, or alter the equal and proportionate security afforded by the lien
of the Indenture for the Bonds issued thereunder, or (c) reduce the number or
percentage of the principal amount of the Bonds upon the consent of the holders
of which modifications or alterations may be made as aforesaid or defaults may
be waived; and (2) the holders of like percentages
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of the principal amount of the Bonds outstanding and of each such series
thereof may waive certain uncured past defaults and the consequences thereof.
In certain events of default, the principal of this Bond may be declared
due and payable before maturity as provided in said Indenture.
The registered owner of this Bond is the Debenture Indenture Trustee. The
Debenture Indenture requires that if any Senior Note in respect of which this
Bond was delivered to the Debenture Indenture Trustee pursuant to the Debenture
Indenture is deemed paid and discharged pursuant to Section 5.01 of the
Debenture Indenture, the obligation of the Company to make payment with respect
to the principal of and premium, if any, and interest on this Bond shall be
satisfied and discharged and this Bond shall cease to secure such Senior Note
in any manner, and the Debenture Indenture Trustee shall surrender this Bond,
subject to the limitations of the Debenture Indenture, to the Company for
cancellation.
The Seventy-Seventh Supplemental Indenture provides that in the event of
any default of the interest due on any interest payment date, such interest
shall not be payable to the holder of the Bond on the original record date but
shall be paid to the registered holder of such Bond on the subsequent record
date established for payment of such defaulted interest.
It is part of the contract herein contained that each holder hereof waives
all right of recourse to any personal, statutory or other liability of any
promoter, shareholder, officer or director, past, present or future, of the
Company or of any predecessor or successor corporation for the collection of
any indebtedness hereunder as more fully provided in said Indenture.
[FORM OF TRUSTEE'S AUTHENTICATION CERTIFICATE]
This is one of the Bonds, of the series designated herein, described in the
within-mentioned Indenture.
STATE STREET BANK AND COMPANY
TRUST, as Trustee
By ____________________________
Authorized Officer
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SECTION 1.02 Redemption Provisions
As designated by resolution of the Board of Directors or the Securities Pricing
Committee of such Board of Directors, the Bonds of the New Series may be
subject to redemption prior to maturity, as a whole at any time or in part from
time to time, at the option of the Company, upon payment of the Redemption
Price designated by the Board of Directors or the Securities Pricing Committee
of the Board of Directors, together with interest accrued thereon to the date
fixed for redemption, upon not less than 30 days' nor more than 60 days' notice
given by first class mail, postage prepaid, to the holder of record at the date
of such notice of each Bond of the New Series affected, at his address as shown
on the Bond register. Such notice shall be sufficiently given if deposited in
the United States mail within such period. Neither the failure to mail such
notice, nor any defect in any notice so mailed to any holder, shall affect the
sufficiency of such notice. The foregoing provision with respect to notice
shall be subject to all other conditions and provisions of the Indenture not
inconsistent herewith.
SECTION 1.03 Depreciation Fund
Notwithstanding the provisions of Section Six of Article II Part I of the
Fortieth Supplemental Indenture, the Company hereby covenants that, so long as
any of the Bonds of the New Series shall remain outstanding, (a) the covenants
made by the Company in Section Four of Article II of Part I of the Fortieth
Supplemental Indenture shall continue in full force and effect and (b) Bonds
delivered, redeemed or purchased pursuant to said Section Four and any amount
of unfunded Bond credits used as a credit in Item 7 of any depreciation fund
certificate shall be deemed to be funded, unless and until the same shall have
been reinstated as provided in said Section Four or in Section 2.03 of the
Indenture. Cash deposited in the depreciation fund may not be applied to the
redemption of the Bonds of the New Series.
SECTION 1.04 Duration of Effectiveness of Article One
This Article shall be in force and effect only so long as any of the Bonds
of the New Series are outstanding.
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SECTION 1.05 Minimum Provision for Depreciation
The Company hereby covenants that the term "minimum provision for
depreciation" shall have the meaning specified in Section 1.32 of the Indenture
until the modification set forth in Article Four hereof shall have become
effective, whereupon the term "minimum provision for depreciation" shall have
the meaning specified in Section 4.01 hereof.
SECTION 1.06 Execution and Delivery
Bonds of the New Series in the aggregate principal amount of Five Hundred
Million Dollars ($500,000,000) may forthwith, upon execution and delivery of
the Seventy-Seventh Supplemental Indenture, or from time to time thereafter,
and upon compliance by the Company with the provisions of Article Five of the
Indenture, be executed by the Company and delivered to the Trustee and shall
thereupon be authenticated and delivered by the Trustee to or upon the written
order of the Company.
SECTION 1.07 Substitution
On the Substitution Date (as defined below), the Trustee will deliver to
the Company for cancellation all Bonds of the New Series. The Company will
cause the Trustee to provide notice to all holders of Bonds of the New Series
prior to the occurrence of the Substitution Date. "Substitution Date" shall
mean the date that all Bonds issued and outstanding under the Indenture
("Electric Bonds"), other than the Bonds of the New Series or any other Bonds
issued to secure the Company's obligations on its Senior Notes, and all first
mortgage bonds of the Company issued and outstanding under the Indenture of
First Mortgage, dated as of April 1, 1957 (the "Gas Utility Mortgage"), from
the Company, as successor to Washington Natural Gas Company, to Harris Trust
and Savings Bank, as trustee, as supplemented and amended ("Gas Bonds" and,
together with the Electric Bonds, the "First Mortgage Bonds"), other than Gas
Bonds issued to secure the Company's obligations on its Senior Notes, 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 Indenture and those Gas Bonds deemed to be paid within the
meaning of the Gas Utility Mortgage).
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SECTION 1.08 Definitions
All other terms used but not otherwise defined in this Seventy-Seventh
Supplemental Indenture shall be taken to have the same meaning as in the
Indenture, except in cases where the context herein clearly indicates
otherwise.
ARTICLE TWO
PRINCIPAL AMOUNT PRESENTLY TO BE OUTSTANDING
SECTION 2.01
The total aggregate principal amount of Bonds of the Company issued and
outstanding and presently to be issued and outstanding under the provisions of
and secured by the Indenture will be One Billion Two Hundred Fifty Million
Eight Hundred Sixty Thousand Dollars ($1,250,860,000); namely, the series of
Bonds set forth herein:
<TABLE>
<CAPTION>
Principal Amount of Bonds Series
- ----------------------------------------- --------------------------------
<C> <S>
Twenty-Seven Million 7.05% Series due August 1, 2021
Five Hundred Thousand Dollars
($27,500,000)
Twenty-Three Million 7.25% Series due August 1, 2021
Four-Hundred Thousand Dollars
($23,400,000)
Twenty-Five Million Dollars Secured Medium-Term Notes,
($25,000,000) Series A due
November 30, 2006
One Hundred Million Dollars Secured Medium-Term Notes,
($100,000,000) Series A due
February 1, 2007
</TABLE>
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<TABLE>
<CAPTION>
Principal Amount of Bonds Series
- ----------------------------------------- --------------------------------
<C> <S>
Eighty-Seven Million 6.80% Series due March 1, 2022
Five Hundred Thousand Dollars
($87,500,000)
Five Million Dollars Secured Medium-Term Notes,
($5,000,000) Series A due April 9, 2012
Ten Million Dollars Secured Medium-Term Notes,
($10,000,000) Series A due May 7, 2007
Thirty Million Dollars Secured Medium-Term Notes,
($30,000,000) Series A due May 29, 2002
Forty-Six Million Dollars Secured Medium-Term Notes,
($46,000,000) Series A due June 19, 2006
Twenty-Seven Million Dollars Secured Medium-Term Notes,
($27,000,000) Series A due August 28, 2002
Five Million Dollars Secured Medium-Term Notes,
($5,000,000) Series A due
September 11, 2002
Ten Million Dollars Secured Medium-Term Notes,
($10,000,000) Series A due
September 15, 1999
Sixteen Million Secured Medium-Term Notes,
Five Hundred Thousand Dollars Series A due
($16,500,000) September 14, 1999
</TABLE>
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<TABLE>
<CAPTION>
Principal Amount of Bonds Series
- ----------------------------------------- --------------------------------
<C> <S>
Twenty Million Secured Medium-Term Notes,
Five Hundred Thousand Dollars Series A due
($20,500,000) September 16, 1999
Fifty Million Dollars Secured Medium-Term Notes,
($50,000,000) Series B due
December 10, 1999
Twenty-Five Million Dollars Secured Medium-Term Notes,
($25,000,000) Series B due
December 10, 2002
Fifty Million Dollars Secured Medium-Term Notes,
($50,000,000) Series B due
December 10, 2004
Thirty Million Dollars Secured Medium-Term Notes,
($30,000,000) Series B due
December 21, 2012
Ten Million Dollars Secured Medium-Term Notes,
($10,000,000) Series B due
February 9, 2000
Thirty Million Dollars Secured Medium-Term Notes,
($30,000,000) Series B due
February 10, 2003
Three Million Dollars Secured Medium-Term Notes,
($3,000,000) Series B due
December 1, 2003
Eleven Million Dollars Secured Medium-Term Notes,
($11,000,000) Series B due
December 2, 2003
</TABLE>
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<TABLE>
<CAPTION>
Principal Amount of Bonds Series
- ----------------------------------------- --------------------------------
<C> <S>
Thirty Million Dollars Secured Medium-Term Notes,
($30,000,000) Series B due
May 27, 2004
Twenty-Three Million Four Hundred Sixty 5.875% Series due
Thousand Dollars March 1, 2020
($23,460,000)
Fifty-Five Million Dollars Secured Medium-Term Notes,
($55,000,000) Series B due
February 1, 2024
Three Hundred Million Dollars First Mortgage Bonds,
($300,000,000) Pledged Series A due
December 1, 2027
Two Hundred Million Dollars First Mortgage Bonds,
($200,000,000) Pledged Series A due
June 15, 2018
</TABLE>
now issued and outstanding, and Five Hundred Million Dollars ($500,000,000)
aggregate principal amount of the Bonds of the New Series to be authenticated
and delivered pursuant to Section 2.02 of this Seventy-Seventh Supplemental
Indenture. Additional Bonds of the New Series and of any other series
established after the execution and delivery of this Seventy-Seventh
Supplemental Indenture may from time to time be authenticated, delivered and
issued pursuant to the terms of the Indenture and indentures supplemental
thereto.
SECTION 2.02
Bonds of the New Series in the aggregate principal amount of Five Hundred
Million Dollars ($500,000,000) may forthwith, upon execution and delivery of
this Seventy-Seventh Supplemental Indenture, or from time to time thereafter,
and upon compliance by the Company with the provisions of Article Five of the
Indenture, be executed by the Company and delivered to the Trustee and shall
thereupon be
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authenticated and delivered by the Trustee to or upon the written
order of the Company.
ARTICLE THREE
MISCELLANEOUS
SECTION 3.01
This Seventy-Seventh Supplemental Indenture is executed and shall be
construed as an indenture supplemental to the Indenture, and shall form a part
thereof, and the Indenture, as hereby supplemented and modified, is hereby
confirmed. Except to the extent inconsistent with the express terms hereof,
all the provisions, terms, covenants, and conditions of the Indenture shall be
applicable to the Bonds of the New Series to the same extent as if specifically
set forth herein.
SECTION 3.02
The Trustee has accepted the amendment of the Indenture effected by this
Seventy-Seventh Supplemental Indenture and agrees to execute the trust created
by the Indenture as hereby amended, but only upon the terms and conditions set
forth in the Indenture, including the terms and provisions defining and
limiting the liabilities and responsibilities of the Trustee, and without
limiting the generality of the foregoing, the Trustee shall not be responsible
in any manner whatsoever for or with respect of any of the recitals or
statements contained herein, all of which recitals or statements are made
solely by the Company, or for or with respect to (a) the validity or
sufficiency of this Seventy-Seventh Supplemental Indenture or any of the terms
or provisions hereof, (b) the proper authorization hereof by the Company by
corporate action or otherwise, and (c) the due execution hereof by the Company.
SECTION 3.03
The Company covenants that it is lawfully seized and possessed of all the
trust estate at the date of the execution of the Seventy-Seventh Supplemental
Indenture except as in the Indenture otherwise stated or permitted; that on
said date the trust estate is free and clear from all liens and encumbrances
other than permitted encumbrances, except as in the Indenture otherwise stated
or permitted; that the Company will warrant and forever defend the trust estate
and the title thereto to the
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Trustee against the claims of all persons whomsoever except as in the Indenture
otherwise stated or permitted; that it will maintain and preserve the lien of
the Indenture, as a first mortgage lien, except as in the Indenture otherwise
stated or permitted so long as any of the Bonds issued under the Indenture are
outstanding; and that it has good right and lawful authority to subject said
property to the lien of the Indenture, as provided in and by the Indenture.
SECTION 3.04
This Seventy-Seventh Supplemental Indenture may be executed in several
counterparts, and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts, or as many of them as the Company
and the Trustee shall preserve undestroyed, shall together constitute but one
and the same instrument.
SECTION 3.05
Although this Seventh-Seventh Supplemental Indenture is dated for
convenience and for the purpose of reference as of March 1, 1999, the actual
date or dates of execution by the Company and by the Trustee are as indicated
by their respective acknowledgments hereto annexed.
ARTICLE FOUR
MODIFICATION OF THE INDENTURE
SECTION 4.01
Each holder of any of the Bonds of the New Series, by his or its
acceptance thereof, shall thereby consent, for the purpose and within the
meaning and intent of Section 18.02 of the Indenture, that Section 1.32 of the
Indenture shall be modified (effective at the time provided in Section 4.02
hereof) to read as follows:
"So long as there are outstanding any Bonds of the 1984 Series or any Bonds
of any other series subsequently authenticated and delivered hereunder as
to which it is so provided in the supplemental indenture establishing said
Bonds or modifying this Indenture, the term "minimum provision for
depreciation" for each calendar year (or monthly fractions
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thereof) in the period being computed shall mean an amount by which 15% of the
gross operating revenues of the Company derived from the operation of its
utility property subject to the lien of the Indenture (after deducting from
such operating revenues (a) an amount equal to the cost of electricity
purchased, including any standby or service charges or similar charges for
electricity and net cost of electricity interchanged, (b) all rentals and
lease payments, and (c) the cost of fuel used in the generation of
electricity during such period to the extent such cost is included or
reflected in operating expense accounts of the Company) exceeds the charges
for maintenance, repairs and renewals of such mortgaged utility property
included or which should be included in operating expense pursuant to sound
accounting practice."
SECTION 4.02
The modification of the Indenture set forth in Section 4.01 hereof shall
become effective without any further approval or consent of the holders of any
Bonds of the New Series (a) when a further supplemental indenture making it
effective shall have been executed with the consent of the holders of not less
than 66-2/3% in principal amount of the Bonds of each other series at the time
outstanding or (b) when all Bonds of all series issued prior to the First
Mortgage Bonds, 12-5/8% Series due 1999 have ceased to be outstanding.
[The remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, Puget Sound Energy, Inc. has caused this Seventy-
Seventh Supplemental Indenture to be signed in its corporate name and behalf by
its President or one of its Vice Presidents or its Treasurer or Assistant
Treasurer and its corporate seal to be hereunto affixed and attested by its
Secretary or one of its Assistant Secretaries, and State Street Bank and Trust
Company in token of its acceptance of the trust hereby created has caused this
Seventy-Seventh Supplemental Indenture to be signed in its corporate name and
behalf by its Vice President or one of its Assistant Vice Presidents, and its
corporate seal to be hereunto affixed and attested by one of its Vice
Presidents, Assistant Vice Presidents or one of its Assistant Secretaries, all
on February 25, 1999, but as of the day and year first above written.
PUGET SOUND ENERGY, INC.
By /s/ Donald E. Gaines
---------------------
Donald E. Gaines, Treasurer
Attest:
/s/ James W. Eldredge
---------------------
James W. Eldredge, Secretary
Corporate Seal
STATE STREET BANK AND TRUST COMPANY
By /s/ James E. Mogavero
-----------------------
Attest:
/s/ Sandy Lamarr Cody
---------------------
Corporate Seal
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STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
Donald E. Gaines and James W. Eldredge being duly sworn each for himself
on oath deposes and says that he, the said Donald E. Gaines, is and at the time
of the execution of the foregoing Supplemental Indenture was the Treasurer of
PUGET SOUND ENERGY, INC., a corporation and the mortgagor herein named, and the
same person who as Treasurer executed said Supplemental Indenture on behalf of
said corporation, and that he, the said James W. Eldredge, is and at the time
of the execution of said Supplemental Indenture was Secretary of said
corporation, the said mortgagor, and the same person who as such Secretary
attested such Supplemental Indenture on behalf of said corporation; and that
the said Supplemental Indenture is made in good faith and without any design to
hinder or delay or defraud creditors or any creditor of said corporation.
SUBSCRIBED AND SWORN to before me this 25th day of February, 1999.
/s/ Carol A Nelson
-------------------------------
(Signature of Notary)
Carol A. Nelson
-------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington, residing in King County.
My Appointment Expires: 7/20/01.
Page 31
<PAGE>
ANY WRITING, TEXT, INTIALS, REVISIONS OR NOTARY SEAL APPEARING OUTSIDE THESE
MARGINS MAY DISQUALIFY THIS DOCUMENT FOR RECORDING
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 25th day of February, 1999, before me, a Notary Public in and for
the State of Washington, duly commissioned and sworn, personally appeared
Donald E. Gaines and James W. Eldredge, to me known to be the Treasurer and the
Secretary, respectively, of PUGET SOUND ENERGY, INC., one of the corporations
that executed the within and foregoing instrument, and acknowledged the said
instrument to be the free and voluntary act and deed of said corporation for
the uses and purposes therein mentioned, and on oath stated that they were
authorized to execute and attest said instrument, and that the seal affixed is
the corporate seal of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official
seal the day and year first above written.
/s/ Carol A. Nelson
--------------------------------
(Signature of Notary)
Carol A. Nelson
--------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington, residing in King County.
My Appointment Expires: 7/20/01.
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<PAGE>
ANY WRITING, TEXT, INTIALS, REVISIONS OR NOTARY SEAL APPEARING OUTSIDE THESE
MARGINS MAY DISQUALIFY THIS DOCUMENT FOR RECORDING
COMMONWEALTH OF MASSACHUSETTS )
) ss.
COUNTY OF SUFFOLK )
On this 26th day of February, 1999, before me personally appeared James E.
Mogavero and Sandy Lamarr Cody, to me known to be an Vice President and an Vice
President, respectively, of STATE STREET BANK AND TRUST COMPANY, one of the
corporations that executed the within and foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of
said corporation for the uses and purposes therein mentioned, and on oath
stated that they were authorized to and did in the name and on behalf of said
corporation execute and attest said instrument, and that the seal affixed is
the corporate seal of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official
seal the day and year first above written.
/s/ Brian J. Curtis
--------------------------------
(Signature of Notary)
Brian J. Curtis
--------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the
Commonwealth of Massachusetts,
residing at Arlington, MA.
My Appointment Expires: April 6, 2001.
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