Exhibit 4.4
_____________________________________________________________
FIRST SUPPLEMENTAL INDENTURE
between
PUGET SOUND ENERGY, INC.
and
BANK ONE TRUST COMPANY, N. A.
Dated as of May 18, 2001
_____________________________________________________________
CONTENTS
ARTICLE I DEFINITIONS............................................................................ 2
SECTION 1.1 Definition of Terms.................................................................. 2
ARTICLE II GENERAL TERMS AND CONDITIONS OF THE DEBENTURES......................................... 3
SECTION 2.1 Designation and Principal Amount..................................................... 3
SECTION 2.2 Maturity............................................................................. 3
SECTION 2.3 Form and Payment..................................................................... 4
SECTION 2.4 Global Debenture..................................................................... 4
SECTION 2.5 Interest............................................................................. 6
ARTICLE III REDEMPTION OF THE DEBENTURES........................................................... 7
SECTION 3.1 Special Event Redemption............................................................. 7
SECTION 3.2 Optional Redemption by Issuer........................................................ 7
SECTION 3.3 No Sinking Fund...................................................................... 8
ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD................................................... 8
SECTION 4.1 Extension of Interest Payment Period................................................. 8
SECTION 4.2 Notice of Extension.................................................................. 9
ARTICLE V EXPENSES............................................................................... 10
SECTION 5.1 Payment of Expenses.................................................................. 10
SECTION 5.2 Payment Upon Resignation or Removal.................................................. 10
ARTICLE VI SUBORDINATION.......................................................................... 11
SECTION 6.1 Agreement to Subordinate............................................................. 11
ARTICLE VII COVENANT TO LIST ON EXCHANGE........................................................... 11
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SECTION 7.1 Listing on an Exchange............................................................... 11
ARTICLE VIII FORM OF DEBENTURES..................................................................... 11
SECTION 8.1 Form of Debenture.................................................................... 11
ARTICLE IX. ORIGINAL ISSUE OF DEBENTURES........................................................... 18
SECTION 9.1 Original Issue of Debentures......................................................... 18
ARTICLE X. MISCELLANEOUS.......................................................................... 18
SECTION 10.1 Provisions of Indenture for the Sole Benefit of Parties and Holders of Trust
Securities.................................................................................... 18
SECTION 10.2 Ratification of Indenture............................................................ 18
SECTION 10.3 Trustee Not Responsible for Recitals................................................. 18
SECTION 10.4 Governing Law........................................................................ 18
SECTION 10.5 Separability......................................................................... 19
SECTION 10.6 Counterparts......................................................................... 19
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FIRST SUPPLEMENTAL INDENTURE, dated as of May 18, 2001, (the "First
Supplemental Indenture"), between Puget Sound Energy, Inc., a Washington
Corporation (the "Issuer"), and Bank One Trust Company, N.A., as trustee (the
"Trustee") under the Indenture dated as of May 18, 2001 between the Issuer and
the Trustee (the "Indenture").
WHEREAS, the Issuer executed and delivered the Indenture to the Trustee to
provide for the future issuance of the Issuer's Securities to be issued from
time to time in one or more series as might be determined by the Issuer under
the Indenture, in an unlimited aggregate principal amount which may be
authenticated and delivered as provided in the Indenture; and
WHEREAS, Section 2.3 of the Indenture permits the terms of any series of
Securities to be established in an indenture supplemental to the Indenture; and
WHEREAS, Section 8.1(d) of the Indenture provided that a supplemental
indenture may be entered into without the consent of any Holders of Securities
to supplement certain provisions of the Indenture; and
WHEREAS, Section 8.1(e) of the Indenture provides that a supplemental
indenture may be entered into by the Issuer and the Trustee without the consent
of any Holders of the Securities to establish the form and terms of the
Securities of any series; and
WHEREAS, pursuant to the terms of the Indenture, the Issuer desires to
provide for the establishment of a new series of its Securities to be known as
its 8.40% Subordinated Deferrable Interest Debentures due June 30, 2041 (the
"Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in the Indenture
and this First Supplemental Indenture; and
WHEREAS, Puget Sound Energy Capital Trust II, a Delaware statutory business
trust (the "Trust"), has offered to the public $206,186,000 million aggregate
liquidation amount of its 8.40% Trust Originated Preferred Securities (the
"Preferred Securities"), representing undivided beneficial interests in the
assets of the Trust and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by the Trust to the Issuer
of $6,186,000 aggregate liquidation amount of its 8.40% Trust Originated Common
Securities (together with the Preferred Securities, the "Trust Securities"), in
$206,186,000 aggregate principal amount of the Debentures; and
WHEREAS, the Issuer wishes to supplement Section 13.2 of the Indenture with
respect to the Debentures and the Preferred Securities; and
WHEREAS, the Issuer has requested that the Trustee execute and deliver this
First Supplemental Indenture and all requirements necessary to make this First
Supplemental Indenture a valid instrument in accordance with its terms, and to
make the Debentures, when executed by the Issuer and authenticated and delivered
by the Trustee, the valid obligations of the Issuer, have been performed, and
the execution and delivery of this First Supplemental Indenture has been duly
authorized in all respects.
NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Issuer covenants and agrees with
the Trustee as follows:
ARTICLE I DEFINITIONS
SECTION 1.1 Definition of Terms
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used in this
First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental Indenture has the
same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or Article of this
First Supplemental Indenture;
(e) headings are for convenience of reference only and do not affect
interpretation;
(f) the following terms have the meanings given to them in the Declaration:
(i) Clearing Agency; (ii) Delaware Trustee; (iii) Redemption Tax Opinion; (iv)
No Recognition Opinion; (v) Preferred Security Certificate; (vi) Property
Trustee; (vii) Regular Trustees; (viii) Special Event; (ix) Tax Event; (x)
Underwriting Agreement; (xi) Investment Company Event; and (xii) Distribution;
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(g) the following terms have the meanings given to them in this Section
1.1(g):
"Additional Interest" shall have the meaning set forth in Section 2.5.
"Compounded Interest" shall have the meaning set forth in Section 4.1.
"Coupon Rate" shall have the meaning set forth in Section 2.5.
"Declaration" means the Amended and Restated Declaration of Trust of Puget
Sound Energy Capital Trust II, a Delaware statutory business trust, dated as of
May 18, 2001.
"Deferred Interest" shall have the meaning set forth in Section 4.1.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Declaration, and the Debentures held by the Property Trustee are to be
distributed to the holders of the Trust Securities issued by the Trust pro rata
in accordance with the Declaration.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.
"Global Debenture" shall have the meaning set forth in Section 2.4.
"Non Book-Entry Preferred Securities" shall have the meaning set forth in
Section 2.4.
"Optional Redemption Price" shall have the meaning set forth in Section
3.2.
ARTICLE II GENERAL TERMS AND CONDITIONS
OF THE DEBENTURES
SECTION 2.1 Designation and Principal Amount
There is hereby authorized and established a series of unsecured Securities
designated the "8.40% Subordinated Deferrable Interest Debentures due June 30,
2041", limited in aggregate principal amount to $206,186,000, (except as
contemplated in Section 2(f)(2) of the Indenture).
SECTION 2.2 Maturity
The Maturity Date of the Debentures is June 30, 2041.
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SECTION 2.3 Form and Payment
The Debentures shall be issued in fully registered form without interest
coupons. Principal and interest on the Debentures issued in certificated form
will be payable, the transfer of such Debentures will be registrable and such
Debentures will be exchangeable for Debentures bearing identical terms and
provisions, at the office or agency of the Trustee in the Borough of Manhattan,
the City of New York; provided, however, that payment of interest may be made at
the option of the Issuer by check mailed to the Holder at such address as shall
appear in the Security Register or by wire transfer to an account maintained by
the Holder. Notwithstanding the foregoing, so long as the Holder of any
Debentures is the Property Trustee, the payment of the principal of and interest
(including Compounded Interest and Additional Interest, if any) on such
Debentures held by the Property Trustee will be made at such place and to such
account as may be designated by the Property Trustee.
SECTION 2.4 Global Debenture
(a) In connection with a Dissolution Event,
(i) the Debentures may be presented to the Trustee by the Property
Trustee in exchange for a global Debenture in an aggregate
principal amount equal to the aggregate principal amount of all
outstanding Debentures (a "Global Debenture"), to be registered
in the name of the Clearing Agency, or its nominee, and
delivered by the Trustee to the Clearing Agency for crediting
to the accounts of its participants pursuant to the
instructions of the Regular Trustees and the Clearing Agency
will act as Depository for the Debentures. The Issuer upon any
such presentation, shall execute a Global Debenture in such
aggregate principal amount and deliver the same to the Trustee
for authentication and delivery in accordance with the
Indenture and this First Supplemental Indenture. Payments on
the Debentures issued as a Global Debenture will be made to the
Depositary; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, the Debentures may be presented to the
Trustee by the Property Trustee and any Preferred Security
Certificate which represents Preferred Securities other than
Preferred Securities held by the Clearing Agency or its nominee
("Non Book-Entry Preferred Securities") will be deemed to
represent beneficial interests in Debentures presented to the
Trustee by the Property
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Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Preferred
Securities until such Preferred Security Certificates are
presented to the Security Registrar for transfer or reissuance
at which time such Preferred Security Certificates will be
canceled and a Debenture, registered in the name of the holder
of the Preferred Security Certificate or the transferee of the
holder of such Preferred Security Certificate, as the case may
be, with an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Security Certificate
canceled, will be executed by the Issuer and delivered to the
Trustee for authentication and delivery in accordance with the
Indenture and this First Supplemental Indenture.
(b) Except as provided in (c) below, a Global Debenture may be transferred,
in whole but not in part, only to another nominee of the Depositary, or to a
successor Depositary selected or approved by the Issuer or to a nominee of such
successor Depositary.
(c) If at any time the Depositary notifies the Issuer that it is unwilling
or unable to continue as Depositary or if at any time the Depositary for such
series shall no longer be registered or in good standing under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation, and
a successor Depositary for such series is not appointed by the Issuer within 90
days after the Issuer receives such notice or becomes aware of such condition,
as the case may be, the Issuer will execute, and, subject to Section 2.8 of the
Indenture, the Trustee, upon written notice from the Issuer, will authenticate
and deliver the Debentures in definitive registered form, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Debenture in exchange for such Global Debenture. In
addition, the Issuer may at any time determine that the Debentures shall no
longer be represented by a Global Debenture. In such event the Issuer will
execute, and subject to Section 2.8 of the Indenture, the Trustee, upon receipt
of an Officers' Certificate evidencing such determination by the Issuer, will
authenticate and deliver the Debentures in definitive registered form, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debenture in exchange for such Global Debenture.
Upon the exchange of the Global Debenture for such Debentures in definitive
registered form, in authorized denominations, the Global Debenture shall be
canceled by the Trustee. Such Debentures in definitive registered form issued
in exchange for the Global Debenture shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or
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otherwise, shall instruct the Trustee. The Trustee shall deliver such Debentures
to the Depositary for delivery to the Persons in whose names such Debentures are
so registered.
SECTION 2.5 Interest
(a) Each Debenture will bear interest at the rate of 8.40% per annum (the
"Coupon Rate") from the original date of issuance until the principal thereof
becomes due and payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest, at the Coupon Rate, compounded quarterly, payable
(subject to the provisions of Article IV) quarterly in arrears on March 30, June
30, September 30, and December 30 of each year (each, an "Interest Payment
Date," commencing on September 30, 2001, to the Person in whose name such
Debenture or any predecessor Debenture is registered, at the close of business
on the regular record date for such interest installment, which, in respect of
any Debentures of which the Property Trustee is the Holder or a Global
Debenture, shall be the close of business on the Business Day next preceding
that Interest Payment Date. Notwithstanding the foregoing sentence, if the
Preferred Securities are no longer in book-entry only form or, except if the
Debentures are held by the Property Trustee, the Debentures are not represented
by a Global Debenture, the regular record date for such interest installment
shall be the fifteenth day of the month in which the applicable Interest Payment
Date occurs.
(b) The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed in such a 90-day period. In the
event that any date on which interest is payable on the Debentures is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
(c) If, at any time while the Property Trustee is the Holder of any
Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any case, the Issuer will pay as additional interest ("Additional
Interest") on the Debentures held by the Property Trustee, such additional
amounts as shall be required so that the net
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amounts received and retained by the Trust and the Property Trustee after paying
such taxes, duties, assessments or other governmental charges will be equal to
the amounts the Trust and the Property Trustee would have received had no such
taxes, duties, assessments or other governmental charges been imposed.
ARTICLE III REDEMPTION OF THE DEBENTURES
SECTION 3.1 Special Event Redemption
If (a) a Tax Event has occurred and is continuing and (i) the Issuer has
received a Redemption Tax Opinion, or (ii) the Regular Trustees shall have been
informed by tax counsel that a No Recognition Opinion cannot be delivered to the
Trust, or (b) an Investment Company Event has occurred and is continuing, then,
notwithstanding Section 3.2(a) but subject to Section 3.2(b) and Article Eleven
of the Indenture, the Issuer shall have the right upon not less than 30 days'
nor more than 60 days' notice to the Holders of the Debentures to redeem the
Debentures, in whole or in part, for cash within 90 days following the
occurrence of such Special Event (the "90 Day Period") at a redemption price
equal to 100% of the principal amount to be redeemed plus any accrued and unpaid
interest thereon to the date of such redemption (the "Redemption Price"),
provided that if at the time there is available to the Issuer or the Trust the
opportunity to eliminate, within the 90 Day Period, the Special Event by taking
some ministerial action ("Ministerial Action"), such as filing a form or making
an election, or pursuing some other similar reasonable measure which has no
adverse effect on the Issuer, the Trust or the Holders of the Trust Securities
issued by the Trust, the Issuer shall pursue such Ministerial Action in lieu of
redemption, and, provided, further, that the Issuer shall have no right to
redeem the Debentures while the Trust is pursuing any Ministerial Action
pursuant to its obligations under the Declaration. The Redemption Price shall
be paid prior to 12:00 noon, New York time, on the date of such redemption or
such earlier time as the Issuer determines, and the Issuer shall deposit with
the Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m., New
York time, on the date such Redemption Price is to be paid.
SECTION 3.2 Optional Redemption by Issuer
(a) Subject to the provisions of Section 3.2(b) and to the provisions of
Article Eleven of the Indenture, the Issuer shall have the right to redeem the
Debentures, in whole or in part, from time to time, on or after June 30, 2006,
at a redemption price equal to 100% of the principal amount to be redeemed plus
any accrued and unpaid interest thereon to the date of such redemption (the
"Optional Redemption Price"). Any redemption pursuant to this paragraph will be
made upon not less than 30 days' nor more than 60 days' notice to the Holder of
the Debentures, at
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the Optional Redemption Price. If the Debentures are only partially redeemed
pursuant to this Section 3.2, the Debentures will be redeemed on a pro rata
basis provided that if at the time of redemption the Debentures are registered
as a Global Debenture, the Depository shall determine, in accordance with its
procedures, the principal amount of such Debentures held by each Holder of
Debentures to be redeemed. The Optional Redemption Price shall be paid prior to
12:00 noon, New York time, on the date of such redemption or at such earlier
time as the Issuer determines and the Issuer shall deposit with the Trustee an
amount sufficient to pay the Optional Redemption Price by 10:00 a.m., New York
time, on the date such Optional Redemption Price is to be paid.
(b) If a partial redemption of the Debentures would result in the delisting
of the Preferred Securities from any national securities exchange or other
organization on which the Preferred Securities are then listed, the Issuer shall
not be permitted to effect such partial redemption and may only redeem the
Debentures in whole.
SECTION 3.3 No Sinking Fund
The Debentures are not entitled to the benefit of any sinking fund.
ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Extension of Interest Payment Period
The Issuer shall have the right, at any time and from time to time during
the term of the Debentures, to defer payments of interest by extending the
interest payment period of such Debentures for a period not exceeding 20
consecutive quarters (the "Extended Interest Payment Period"), during which
Extended Interest Payment Period no interest shall be due and payable; provided
that no Extended Interest Payment Period may extend beyond the Maturity Date.
To the extent permitted by applicable law, interest, the payment of which has
been deferred because of the extension of the interest payment period pursuant
to this Section 4.1, will bear interest thereon at the Coupon Rate compounded
quarterly for each quarter of the Extended Interest Payment Period ("Compounded
Interest"). At the end of the Extended Interest Payment Period, the Issuer
shall pay all interest accrued and unpaid on the Debentures, including any
Additional Interest and Compounded Interest (together, "Deferred Interest") that
shall be payable to the Holders of the Debentures in whose names the Debentures
are registered in the Security Register on the first record date after the end
of the Extended Interest Payment Period. Prior to the termination of any
Extended Interest Payment Period, the Issuer may further extend such period,
provided that such period together with all such further extensions thereof
shall not exceed 20 consecutive quarters. Upon the termination of any Extended
Interest
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Payment Period and upon the payment of all Deferred Interest then due, the
Issuer may commence a new Extended Interest Payment Period, subject to the
foregoing requirements. No interest shall be due and payable during an Extended
Interest Payment Period, except at the end thereof, but the Issuer may prepay at
any time all or any portion of the interest accrued during an Extended Interest
Payment Period.
The limitations set forth in Section 3.5 of the Indenture shall apply
during any Extended Interest Payment Period.
SECTION 4.2 Notice of Extension
(a) If the Property Trustee is the only registered Holder of the Debentures
at the time the Issuer elects an Extended Interest Payment Period, the Issuer
shall give written notice to the Regular Trustees, the Property Trustee and the
Trustee of its election of such Extended Interest Payment Period one Business
Day before the earlier of (i) the next succeeding date on which Distributions on
the Trust Securities issued by the Trust are payable, or (ii) the date the Trust
is required to give notice of the record date, or the date such Distributions
are payable, to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Preferred Securities, but in any event at
least one Business Day before such record date.
(b) If the Property Trustee is not the only Holder of the Debentures at the
time the Issuer elects an Extended Interest Payment Period, the Issuer shall
give the Holders of the Debentures and the Trustee written notice of its
election of such Extended Interest Payment Period ten Business Days before the
earlier of (i) the next succeeding Interest Payment Date, or (ii) the date the
Issuer is required to give notice of the record or payment date of such interest
payment to the New York Stock Exchange or other applicable self-regulatory
organization or to Holders of the Debentures, but in any event at least 2
Business Days before such record date.
(c) The quarter in which any notice is given pursuant to paragraph (a) or
(b) of this Section 4.2 shall be counted as one of the 20 quarters permitted in
the maximum Extended Interest Payment Period permitted under Section 4.1.
ARTICLE V EXPENSES
SECTION 5.1 Payment of Expenses
In connection with the offering, sale and issuance of the Debentures to the
Property Trustee and in connection with the sale of the Trust Securities by the
Trust, the Issuer, in its capacity as borrower with respect to the Debentures,
shall:
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(a) pay all costs and expenses relating to the offering, sale and issuance
of the Debentures, including commissions to the underwriters payable pursuant to
the Underwriting Agreement and the Pricing Agreements, and compensation of the
Trustee under the Indenture in accordance with the provisions of Section 6.6 of
the Indenture;
(b) pay all costs and expenses of the Trust (including, but not limited to,
costs and expenses relating to the organization of the Trust, the offering, sale
and issuance of the Trust Securities (including commissions to the underwriters
in connection therewith), the fees and expenses of the Property Trustee and the
Delaware Trustee, the costs and expenses relating to the operation of the Trust,
including without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving and
computing or accounting equipment, paying agent(s), registrar(s), transfer
agent(s), duplicating, travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets);
(c) be primarily liable for any indemnification obligations arising with
respect to the Declaration; and
(d) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.
SECTION 5.2 Payment Upon Resignation or Removal
Upon termination of this First Supplemental Indenture or the Indenture or
the removal or resignation of the Trustee pursuant to Section 6.10 of the
Indenture, the Issuer shall pay to the Trustee all amounts accrued to the date
of such termination, removal or resignation. Upon termination of the
Declaration or the removal or resignation of the Delaware Trustee or the
Property Trustee, as the case may be, pursuant to Section 5.6 of the
Declaration, the Issuer shall pay to the Delaware Trustee or the Property
Trustee, as the case may be, all amounts accrued to the date of such
termination, removal or resignation.
ARTICLE VI SUBORDINATION
SECTION 6.1 Agreement to Subordinate
The Issuer covenants and agrees, and each Holder of Debentures issued
hereunder, by such Holder's acceptance thereof likewise covenants and agrees,
that pursuant to Section 2.3(f)(9) of the Indenture all Debentures shall be
issued as
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Subordinated Securities subject to the provisions of Article XII of the
Indenture and this Article VI; and each Holder of a Debenture by its acceptance
thereof accepts and agrees to be bound by such provisions.
ARTICLE VII COVENANT TO LIST ON EXCHANGE
SECTION 7.1 Listing on an Exchange
In connection with the distribution of the Debentures to the holders of the
Preferred Securities upon a Dissolution Event, the Issuer will use its best
efforts to list such Debentures on the New York Stock Exchange or on such other
exchange as the Preferred Securities are then listed.
ARTICLE VIII FORM OF DEBENTURES
SECTION 8.1 Form of Debenture
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms and the
Debentures shall have such additional terms as may be set forth in such form:
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT - This Debenture is a
Global Debenture within the meaning of the Indenture hereinafter referred to and
is registered in the name of a Depositary or a nominee of a Depositary. This
Debenture is exchangeable for Debentures registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Debenture (other than a
transfer of this Debenture as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in limited circumstances.
Unless this Debenture is presented by an authorized representative of The
Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) to the issuer or
its agent for registration of transfer, exchange or payment, and any Debenture
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.]
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No.
$
CUSIP NO.
PUGET SOUND ENERGY, INC.
8.40% SUBORDINATED DEFERRABLE INTEREST DEBENTURES DUE
Puget Sound Energy, Inc., a Washington corporation (the "Issuer", which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to Bank One Trust Company, N.A.,
not in its individual capacity, but solely as Property Trustee of Puget Sound
Energy Capital Trust II, or registered assigns, the principal sum of Two Hundred
Six Million One Hundred Eighty-six Thousand Dollars ($206,186,000) on June 30,
2041, and to pay interest on said principal sum from May 24, 2001 quarterly
(subject to deferral as set forth herein) on March 30, June 30, September 30 and
December 30 of each year (each such date, an "Interest Payment Date") commencing
September 30, 2001 at the rate of 8.40% per annum until the principal hereof
shall have become due and payable, and on any overdue principal and premium, if
any, and (without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
same rate per annum compounded quarterly. The amount of interest payable on any
Interest Payment Date shall be computed on the basis of a 360-day year of twelve
30-day months. In the event that any date on which interest is payable on this
Debenture is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the person in whose name this Debenture
(or one or more Predecessor Securities, as defined in said Indenture) is
registered at the close of business on the regular record date for such interest
installment, which shall be the close of business on the Business Day next
preceding such Interest Payment Date. [IF PURSUANT TO THE PROVISIONS OF THE
INDENTURE THE DEBENTURES ARE NO LONGER REPRESENTED BY A GLOBAL DEBENTURE --
which shall be the close of business on the 15th day of the month in which such
Interest Payment Date occurs.] If and to the extent the Issuer shall default in
the payment of the interest due on such Interest Payment Date, interest shall be
paid to the person in whose name this
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Debenture is registered at the close of business on a subsequent record date
(which shall not be less than five Business Days prior to the date of payment of
such defaulted interest) established by notice given by mail by or on behalf of
the Issuer to the Holder of this Debenture not less than 15 days preceding such
subsequent Record Date. The principal of (and premium, if any) and the interest
on this Debenture shall be payable at the office or agency of the Trustee in the
Borough of Manhattan, the City of New York maintained for that purpose in any
coin or currency of the United States of America that at the time is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Issuer by check mailed to the
registered Holder at such address as shall appear in the Security Register or by
wire transfer to an account maintained by the Holder. Notwithstanding the
foregoing, so long as the Holder of this Debenture is the Property Trustee, the
payment of the principal of (and premium, if any) and interest on this Debenture
will be made at such place and to such account as may be designated by the
Property Trustee.
The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Indebtedness, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her attorney-in-
fact for any and all such purposes. Each Holder hereof, by his or her
acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued on the reverse side hereof
and such continued provisions shall for all purposes have the same effect as
though fully set forth at this place.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be executed.
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Dated: Puget Sound Energy, Inc.
[Seal] By ________________________________
Name:______________________________
Title:_____________________________
Attest:
By __________________________
Name:________________________
Title:_______________________
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series of Securities described in the
within-mentioned Indenture.
__________________________
as Trustee
By:
Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Securities of the
Issuer (herein sometimes referred to as the "Debentures"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of May 1, 2001, duly executed and delivered between the
Issuer and Bank One Trust Company, N.A., a national banking association, as
Trustee (the "Trustee"), as supplemented by the First Supplemental Indenture
dated as of May 1, 2001, between the Issuer and the Trustee (the Indenture as so
supplemented, the "Indenture"), to which Indenture reference is hereby made for
a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Issuer and the Holders of the
Debentures. By the terms of the Indenture, the Debentures are issuable in
series that may vary as to amount, date of maturity, rate of interest and in
other
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respects as provided in the Indenture. This series of Debentures is limited in
aggregate principal amount as specified in said First Supplemental Indenture.
The Issuer shall have the right to redeem this Debenture at the option of
the Issuer, without premium or penalty, in whole or in part at any time on or
after June 30, 2006, or at any time in certain circumstances upon the occurrence
of a Special Event, at a redemption price equal to 100% of the principal amount
plus any accrued but unpaid interest, to the date of such redemption. Any
redemption pursuant to this paragraph will be made upon not less than 30 days'
nor more than 60 days' notice. If the Debentures are only partially redeemed by
the Issuer pursuant to an Optional Redemption, the Debentures will be redeemed
pro rata.
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Debentures and other Indenture securities of each series
affected at the time Outstanding and affected (voting as one class), as defined
in the Indenture, to execute supplemental indentures for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Debentures; provided, however, that the Company
and the Trustee may not, without the consent of the Holder of each Debenture
then Outstanding and affected thereby: (a) change the time of payment of the
principal (or any installment) of any Debenture, or reduce the principal amount
thereof, or reduce the rate or change the time of payment of interest thereon,
or impair the right to institute suit for the enforcement of any payment on any
Debenture when due or (b) reduce the percentage in principal amount of the
Debentures, the consent of whose Holders is required for any such modification
or for any waiver provided for in the Indenture. The Indenture also contains
provisions providing that prior to the acceleration of the maturity of any
Debenture or other securities outstanding under the Indenture, the Holders of a
majority in aggregate principal amount of Debentures of and other Securities
Outstanding under the Indenture with respect to which a default or/an Event of
Default shall have occurred and be continuing (voting as one class) may on
behalf of
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the Holders of all such affected Securities (including the Debentures) waive any
past default and its consequences, except a default or an Event of Default in
respect of a covenant or provision of the Indenture or of any Debenture or other
Security which cannot be modified or amended without the consent of the Holder
of each Debenture or other Security affected. Any such consent or waiver by the
registered Holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Debenture and of any Debenture issued in exchange
herefor or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
The Issuer shall have the right at any time during the term of the
Debentures and from time to time to extend the interest payment period of such
Debentures for up to 20 consecutive quarters (an "Extended Interest Payment
Period"), at the end of which period the Issuer shall pay all interest then
accrued and unpaid (together with interest thereon at the rate specified for the
Debentures to the extent that payment of such interest is enforceable under
applicable law). Before the termination of any such Extended Interest Payment
Period, the Issuer may further extend such Extended Interest Payment Period,
provided that such Extended Interest Payment Period together with all such
further extensions thereof shall not exceed 20 consecutive quarters. At the
termination of any such Extended Interest Payment Period and upon the payment of
all accrued and unpaid interest and any additional amounts then due, the Issuer
may commence a new Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein set
forth, this Debenture is transferable by the registered Holder hereof on the
Security Register of the Issuer, upon surrender of this Debenture for
registration of transfer at the office or agency of the Trustee in the City and
State of New York accompanied by a written instrument or instruments of transfer
in form satisfactory to the Issuer or the Trustee duly executed by the
registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such
transfer, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in relation thereto.
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Prior to due presentment for registration of transfer of this Debenture,
the Issuer, the Trustee, any paying agent and the Security Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue and notwithstanding any notice of ownership
or writing hereon made by anyone other than the Security Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other purposes, and neither
the Issuer nor the Trustee nor any paying agent nor any Security Registrar shall
be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Issuer or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
Debentures of this series so issued are issuable only in registered form
without coupons in denominations of $25 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations herein and therein
set forth, Debentures of this series so issued are exchangeable for a like
aggregate principal amount of Debentures of this series in authorized
denominations, as requested by the Holder surrendering the same.
All terms used in this Debenture that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
[END OF FORM OF DEBENTURE]
ARTICLE IX.
ORIGINAL ISSUE OF DEBENTURES
SECTION 9.1 Original Issue of Debentures
Debentures in the aggregate principal amount of $206,186,000 may, upon
execution of this First Supplemental Indenture, be executed by the Issuer and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Debentures to or upon the written order of the
Issuer, in accordance with Section 2.4 of the Indenture.
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ARTICLE X.
MISCELLANEOUS
SECTION 10.1 Provisions of Indenture for the Sole Benefit of Parties and
Holders of Trust Securities
Notwithstanding Section 13.2 of the Indenture, for so long as any Trust
Securities remain outstanding, the Issuer's obligations under the Indenture and
this First Supplemental Indenture will also be for the benefit of the holders of
the Trust Securities, and the Issuer acknowledges and agrees that such holders
will be entitled to enforce certain payment obligations under the Debentures
directly against the Issuer to the extent provided in the Declaration.
SECTION 10.2 Ratification of Indenture
The Indenture, as supplemented by this First Supplemental Indenture, is in
all respects ratified and confirmed, and this First Supplemental Indenture shall
be deemed part of the Indenture in the manner and to the extent herein and
therein provided.
SECTION 10.3 Trustee Not Responsible for Recitals
The recitals herein contained are made by the Issuer and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
First Supplemental Indenture.
SECTION 10.4 Governing Law
This First Supplemental Indenture and each Debenture shall be deemed to be
a contract made under the internal laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State.
SECTION 10.5 Separability
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Debentures shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this First
Supplemental Indenture or of the Debentures, but this First Supplemental
Indenture and the Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
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SECTION 10.6 Counterparts
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
(The remainder of this page has intentionally been left blank)
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IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
PUGET SOUND ENERGY, INC., as Issuer
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx
Vice President and Treasurer
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Xxxxx X. Xxxxxxxx
Secretary
BANK ONE TRUST COMPANY, N.A., as Trustee
By: /s/ Xxxxxx Xxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxx Xxxxxxx
Title: Vice President
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: First Vice President
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