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EXHIBIT 4.2
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(Real Estate Mortgage)
PUGET SOUND ENERGY, INC.
TO
STATE STREET BANK AND
TRUST COMPANY,
Trustee
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Seventy-Eighth Supplemental Indenture
Dated as of October 1, 2000
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Relating to First Mortgage Bonds,
Pledged Series C due Nine Months or More From Date of Issue
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Supplemental to Indenture dated as of
June 2, 1924, as supplemented and modified
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(NOT PART OF INDENTURE)
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THIS SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE, made as of the 1st day of
October, 2000, 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
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 1
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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, privileges,
easements,
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 2
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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:
Supplemental Indenture Dated as of
------------------------------------------- --------------------
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
Seventy-Second Supplemental Indenture August 1, 1991
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 3
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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
Seventy-Seventh Supplemental Indenture March 1, 1999
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:
Principal Amount of Bonds Series
------------------------- ------
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
Eighty-Seven Million 6.80% Series due March 1, 2022
Five Hundred Thousand Dollars
($87,500,000)
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 4
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Principal Amount of Bonds Series
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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
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
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
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 5
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Principal Amount of Bonds Series
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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 Hundred 5.875% Series due March 1, 2020
Sixty Thousand Dollars
($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
One Hundred Million Dollars First Mortgage Bonds,
($100,000,000) Pledged Series B due
March 9, 2029
One Hundred Fifty Million Dollars First Mortgage Bonds,
($150,000,000) Pledged Series B due
March 9, 2009
Two Hundred Twenty-Five Million First Mortgage Bonds,
Dollars Pledged Series B due
($225,000,000) February 22, 2010
Twenty-Five Million Dollars First Mortgage Bonds,
($25,000,000) Pledged Series B due
September 8, 2008
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 6
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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 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 C," 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-Eighth
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
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 7
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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-Eighth 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-Eighth 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 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,
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 8
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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-Eighth 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 herein), in accordance with the provisions of said Bonds of the New
Series and of this Seventy-Eighth 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-Eighth Supplemental
Indenture, and to secure the performance of and compliance with the covenants
and conditions of this Seventy-Eighth Supplemental Indenture, pursuant to and
under and subject to the provisions and conditions and for the uses hereinafter
and in this Seventy-Eighth 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:
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 9
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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 C" (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 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-Eighth Supplemental Indenture.
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 10
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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.
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
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 11
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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 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
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 12
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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 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._________________
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 13
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PUGET SOUND ENERGY, INC.
FIRST MORTGAGE BOND, PLEDGED SERIES C
Original Issue Date: Interest Rate: Maturity Date:
__________________ ______________% _________________
Initial Redemption Initial Redemption Annual Redemption
Date: Percentage: Percentage Reduction:
__________________ _______________ _________________
PUGET SOUND ENERGY, INC., a corporation of the state of Washington (the
"Company"), for value received hereby promises to pay to
DOLLARS
or registered assigns, the principal sum of
on the Maturity Date set forth above, and to pay interest thereon from the
Original Issue Date set forth above or from the most recent date to which
interest has been paid or duly provided for, semiannually in arrears on
__________ and __________ in each year (each, an "Interest Payment Date"),
commencing on the first such Interest Payment Date succeeding the Original Issue
Date set forth above, at the per annum Interest Rate set forth above, until the
principal hereof is paid or made available for payment. No interest shall accrue
on the Maturity Date, so long as the principal amount of this Note is paid in
full on the Maturity Date. The interest so payable and punctually paid or duly
provided for on any such Interest Payment Date will 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
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 14
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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.
"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
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 15
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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
------------------------------
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 16
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[FORM OF REVERSE OF BOND OF THE NEW SERIES]
PUGET SOUND ENERGY, INC.
First Mortgage Bond, Pledged Series C
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-Eighth Supplemental Indenture dated as of October 1, 2000, 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 maturity,
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 17
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MARGINS MAY DISQUALIFY THIS DOCUMENT FOR RECORDING
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-Eighth 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
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 18
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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
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 19
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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-Eighth 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 TRUST COMPANY, as Trustee
By
--------------------------------------------
Authorized Officer
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 20
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MARGINS MAY DISQUALIFY THIS DOCUMENT FOR RECORDING
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.
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 21
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MARGINS MAY DISQUALIFY THIS DOCUMENT FOR RECORDING
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-Eighth 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).
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 22
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MARGINS MAY DISQUALIFY THIS DOCUMENT FOR RECORDING
SECTION 1.08 Definitions
All other terms used but not otherwise defined in this Seventy-Eighth
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 Six Hundred Forty-Three Million
Eight Hundred Sixty Thousand Dollars ($1,643,860,000); 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>
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 23
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MARGINS MAY DISQUALIFY THIS DOCUMENT FOR RECORDING
<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
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
</TABLE>
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 24
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MARGINS MAY DISQUALIFY THIS DOCUMENT FOR RECORDING
<TABLE>
<CAPTION>
Principal Amount of Bonds Series
------------------------- ------
<C> <S>
Thirty Million Dollars Secured Medium-Term Notes,
($30,000,000) Series B due December 21, 2012
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
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 March 1, 2020
Thousand Dollars
($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>
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 25
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<TABLE>
<CAPTION>
Principal Amount of Bonds Series
------------------------- ------
<C> <S>
One Hundred Million Dollars First Mortgage Bonds,
($100,000,000) Pledged Series B due March 9, 2029
One Hundred Fifty Million Dollars First Mortgage Bonds,
($150,000,000) Pledged Series B due March 9, 2009
Two Hundred Twenty-Five Million Dollars First Mortgage Bonds,
($225,000,000) Pledged Series B due February 22,
2010
Twenty-Five Million Dollars First Mortgage Bonds,
($25,000,000) Pledged Series B due September 8,
2008
</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-Eighth Supplemental
Indenture. Additional Bonds of the New Series and of any other series
established after the execution and delivery of this Seventy- Eighth
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- Eighth 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.
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 26
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ARTICLE THREE
MISCELLANEOUS
SECTION 3.01
This Seventy- Eighth 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-Eighth 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-Eighth
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-Eighth 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 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
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 27
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MARGINS MAY DISQUALIFY THIS DOCUMENT FOR RECORDING
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-Eighth 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 Seventy-Eighth Supplemental Indenture is dated for
convenience and for the purpose of reference as of October 1, 2000, 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 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
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 28
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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]
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 29
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MARGINS MAY DISQUALIFY THIS DOCUMENT FOR RECORDING
IN WITNESS WHEREOF, Puget Sound Energy, Inc. has caused this Seventy-Eighth
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-
Eighth 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 October
31, 2000, but as of the day and year first above written.
PUGET SOUND ENERGY, INC.
By /s/ Tommy G. Leong
-------------------
Tommy G. Leong, Assistant Treasurer
Attest:
/s/ James W. Eldredge
---------------------
James W. Eldredge, Secretary
[corporate seal]
STATE STREET BANK AND TRUST COMPANY
By James Mogavero
--------------
Attest:
Laura S. Cawley
---------------
[corporate seal]
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 30
<PAGE>
ANY WRITING, TEXT INITIALS, REVISIONS OR NOTARY SEAL APPEARING OUTSIDE THESE
MARGINS MAY DISQUALIFY THIS DOCUMENT FOR RECORDING
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
Tommy G. Leong and James W. Eldredge being duly sworn each for himself on
oath deposes and says that he, the said Tommy G. Leong, is and at the time of
the execution of the foregoing Supplemental Indenture was the Assistant
Treasurer of PUGET SOUND ENERGY, INC., a corporation and the mortgagor herein
named, and the same person who as Assistant 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 31st day of October, 2000.
/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.
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 31
<PAGE>
ANY WRITING, TEXT INITIALS, REVISIONS OR NOTARY SEAL APPEARING OUTSIDE THESE
MARGINS MAY DISQUALIFY THIS DOCUMENT FOR RECORDING
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 31st day of October, 2000, before me, a Notary Public in and for
the State of Washington, duly commissioned and sworn, personally appeared Tommy
G. Leong and James W. Eldredge, to me known to be the Assistant 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.
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 32
<PAGE>
ANY WRITING, TEXT INITIALS, REVISIONS OR NOTARY SEAL APPEARING OUTSIDE THESE
MARGINS MAY DISQUALIFY THIS DOCUMENT FOR RECORDING
COMMONWEALTH OF MASSACHUSETTS )
) ss.
COUNTY OF SUFFOLK )
On this 31st day of October, 2000, before me personally appeared James E.
Mogavero and Laura S. Cawley, 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/ Dorothy M. Clark
-----------------------------------------
(Signature of Notary)
Dorothy M. Clarke
-----------------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the Commonwealth
of Massachusetts.
My Appointment Expires: October 27, 2006.
SEVENTY-EIGHTH SUPPLEMENTAL INDENTURE PAGE 33
