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EXECUTION VERSION Deal CUSIP 745309AF1 Term Loan CUSIP 745309AG9 TERM LOAN
AGREEMENT dated as of September 26, 2019 among PUGET ENERGY, INC. The Lenders
Party Hereto MIZUHO BANK, LTD., as Administrative Agent and COBANK, ACB, as
Syndication Agent MIZUHO BANK, LTD., as Lead Arranger and Bookrunner ACTIVE
248691463v.6

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Table of Contents (continued) ARTICLE I Definitions
................................................................................................................................
1 SECTION 1.01. Defined Terms
....................................................................................................................
1 SECTION 1.02. Classification of Loans and Borrowings
.......................................................................... 23
SECTION 1.03. Terms Generally
...............................................................................................................
23 SECTION 1.04. Accounting Terms; GAAP; Pro Forma Calculations
....................................................... 23 SECTION 1.05. Status
of Obligations
........................................................................................................
24 ARTICLE II The Credits
............................................................................................................................
25 SECTION 2.01. Loans
................................................................................................................................
25 SECTION 2.02. Loans and Borrowings
.....................................................................................................
25 SECTION 2.03. Method of Borrowing
.......................................................................................................
25 SECTION 2.04. [Reserved]
........................................................................................................................
26 SECTION 2.05. [Reserved]
........................................................................................................................
26 SECTION 2.06. [Reserved]
........................................................................................................................
26 SECTION 2.07. Funding of Borrowings
....................................................................................................
26 SECTION 2.08. Interest Elections
..............................................................................................................
26 SECTION 2.09. [Reserved]
........................................................................................................................
27 SECTION 2.10. Repayment of Loans; Evidence of Debt
.......................................................................... 27
SECTION 2.11. Prepayment of
Loans........................................................................................................
28 SECTION 2.12. Fees
..................................................................................................................................
28 SECTION 2.13. Interest
..............................................................................................................................
29 SECTION 2.14. Alternate Rate of Interest
.................................................................................................
29 SECTION 2.15. Increased Costs; Illegality
................................................................................................
30 SECTION 2.16. Break Funding Payments
.................................................................................................
31 SECTION 2.17. Taxes
................................................................................................................................
32 SECTION 2.18. Payments Generally; Allocations of Proceeds; Pro Rata
Treatment; Sharing of Set- offs
....................................................................................................................................
35 SECTION 2.19. Mitigation Obligations; Replacement of Lenders
............................................................ 36 SECTION 2.20.
Expansion Option
.............................................................................................................
37 SECTION 2.21. Defaulting Lenders
...........................................................................................................
38 SECTION 2.22. [Reserved]
........................................................................................................................
38 SECTION 2.23. MIRE Events
....................................................................................................................
38 ARTICLE III Representations and Warranties
...........................................................................................
38 SECTION 3.01. Existence, Qualification and Power; Compliance with Laws
.......................................... 39 SECTION 3.02. Binding Effect
..................................................................................................................
39 SECTION 3.03. Authorization; No Contravention
.....................................................................................
39 SECTION 3.04. Governmental Authorization; Other Consents
................................................................. 39 SECTION
3.05. Taxes
................................................................................................................................
39 SECTION 3.06. No Default
........................................................................................................................
40 SECTION 3.07. Financial Statements; No Material Adverse Effect
.......................................................... 40 SECTION 3.08.
Ranking
............................................................................................................................
40 SECTION 3.09. Ownership of Assets
........................................................................................................
40 SECTION 3.10. No Other
Business............................................................................................................
41 ii

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Table of Contents (continued) SECTION 3.11. Insurance
..........................................................................................................................
41 SECTION 3.12. Disclosure
.........................................................................................................................
41 SECTION 3.13. Subsidiaries; Equity Interests
...........................................................................................
41 SECTION 3.14. No Dividend Restrictions
.................................................................................................
41 SECTION 3.15. Litigation
..........................................................................................................................
42 SECTION 3.16. Solvency
...........................................................................................................................
42 SECTION 3.17. Margin Regulations; Investment Company Act; USA PATRIOT Act
............................ 42 SECTION 3.18. ERISA Compliance
..........................................................................................................
42 SECTION 3.19. Environmental Compliance
..............................................................................................
43 SECTION 3.20. Labor Disputes
.................................................................................................................
43 SECTION 3.21. Affiliate Transactions
.......................................................................................................
43 SECTION 3.22. Collateral
..........................................................................................................................
43 SECTION 3.23. Anti-Corruption Laws and Sanctions
...............................................................................
44 SECTION 3.24. EEA Financial Institutions
...............................................................................................
44 ARTICLE IV Conditions
............................................................................................................................
44 SECTION 4.01. Effective
Date...................................................................................................................
44 SECTION 4.02. Each Credit Event
............................................................................................................
45 ARTICLE V Affirmative Covenants
..........................................................................................................
45 SECTION 5.01. Financial Statements
........................................................................................................
45 SECTION 5.02. Compliance Certificate
.....................................................................................................
46 SECTION 5.03. Notices
.............................................................................................................................
47 SECTION 5.04. Compliance with Laws
.....................................................................................................
47 SECTION 5.05. Preservation of Existence, Etc.
.........................................................................................
48 SECTION 5.06. Compliance with Environmental Laws
............................................................................ 48
SECTION 5.07. Maintenance of Properties; Ownership of Subsidiaries
................................................... 48 SECTION 5.08. Maintenance
of Insurance
................................................................................................
48 SECTION 5.09. Use of Proceeds
................................................................................................................
48 SECTION 5.10. Payment of Obligations
....................................................................................................
49 SECTION 5.11. Cooperation
......................................................................................................................
49 SECTION 5.12. Books and Records
...........................................................................................................
49 SECTION 5.13. Financing Documents; Material Documents
.................................................................... 49 SECTION
5.14. Maintenance of Ratings
....................................................................................................
50 SECTION 5.15. Inspection Rights
..............................................................................................................
50 SECTION 5.16. Additional Collateral
........................................................................................................
50 SECTION 5.17. Flood Insurance
................................................................................................................
50 ARTICLE VI Negative Covenants
.............................................................................................................
51 SECTION 6.01. Liens
.................................................................................................................................
51 SECTION 6.02. Dispositions
......................................................................................................................
54 SECTION 6.03. Investments
......................................................................................................................
55 SECTION 6.04. Fundamental Changes
......................................................................................................
56 SECTION 6.05. Nature of Business
...........................................................................................................
56 SECTION 6.06. Transactions with Affiliates; Management Fees
.............................................................. 56 iii

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Table of Contents (continued) SECTION 6.07. Accounting Changes
........................................................................................................
56 SECTION 6.08. Restrictive Agreements
....................................................................................................
57 SECTION 6.09. Financial Covenant
...........................................................................................................
57 SECTION 6.10. Preservation of Rights
......................................................................................................
57 ARTICLE VII Events of Default
................................................................................................................
58 ARTICLE VIII The Administrative Agent
.................................................................................................
60 ARTICLE IX Miscellaneous
......................................................................................................................
64 SECTION 9.01. Notices
.............................................................................................................................
64 SECTION 9.02. Waivers; Amendments
.....................................................................................................
65 SECTION 9.03. Expenses; Indemnity; Damage Waiver
............................................................................ 67
SECTION 9.04. Successors and Assigns
....................................................................................................
68 SECTION 9.05. Survival
............................................................................................................................
71 SECTION 9.06. Counterparts; Integration; Effectiveness; Electronic Execution
...................................... 71 SECTION 9.07. Severability
......................................................................................................................
72 SECTION 9.08. Right of Setoff
..................................................................................................................
72 SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process
.......................................... 72 SECTION 9.10. WAIVER OF JURY TRIAL
............................................................................................
72 SECTION 9.11. Headings
...........................................................................................................................
73 SECTION 9.12.
Confidentiality..................................................................................................................
73 SECTION 9.13. USA PATRIOT Act
.........................................................................................................
74 SECTION 9.14. Appointment for Perfection
..............................................................................................
74 SECTION 9.15. Interest Rate Limitation
....................................................................................................
74 SECTION 9.16. No Advisory or Fiduciary Responsibility
........................................................................ 74
SECTION 9.17. Acknowledgment and Consent to Bail-In of EEA Financial
Institutions ........................ 75 SCHEDULES: Schedule 1.01(a) – Existing
Indebtedness Schedule 1.01(b) – Permitted Holders Schedule 2.01 – Commitments
Schedule 3.04 – Regulatory Approvals Schedule 3.13(a) – Subsidiaries Schedule
3.13(b) – Subsidiaries’ Jurisdictions of Organization Schedule 3.14 – Existing
Dividend Restrictions Schedule 3.15 – Litigation Schedule 3.19 – Environmental
Matters Schedule 3.21 – Affiliate Transactions Schedule 5.07 – Properties and
Assets Schedule 6.01(b) – Existing Liens Schedule 6.03(l) – Investments
EXHIBITS: iv

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Table of Contents (continued) Exhibit A – Form of Assignment and Assumption
Exhibit B – Form of Borrowing Request Exhibit C – Form of Increasing Lender
Supplement Exhibit D – Form of Augmenting Lender Supplement Exhibit E – List of
Closing Documents Exhibit F – Form of Term Note Exhibit G-1 – Form of U.S. Tax
Certificate (Non-U.S. Lenders That Are Not Partnerships) Exhibit G-2 – Form of
U.S. Tax Certificate (Non-U.S. Lenders That Are Partnerships) Exhibit G-3 – Form
of U.S. Tax Certificate (Non-U.S. Participants That Are Not Partnerships)
Exhibit G-4 – Form of U.S. Tax Certificate (Non-U.S. Participants That Are
Partnerships) Exhibit H – Collateral Agency Agreement Exhibit I – Form of
Interest Election Request Exhibit J – Form of Solvency Certificate Exhibit K –
Pledge Agreement Exhibit L – Security Agreement Exhibit M – Terms of
Subordination Exhibit N – Form of Prepayment Notice v

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TERM LOAN AGREEMENT (this “Agreement”) dated as of September 26, 2019 among
PUGET ENERGY, INC., the LENDERS from time to time party hereto, MIZUHO BANK,
LTD., as Administrative Agent, and COBANK, ACB, as Syndication Agent. In
consideration of the mutual covenants herein, as well as other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows: ARTICLE I Definitions SECTION 1.01. Defined
Terms. As used in this Agreement, the following terms have the meanings
specified below: “ABR” when used in reference to any Loan or Borrowing, refers
to a Loan, or the Loans comprising such Borrowing, bearing interest at a rate
determined by reference to the Alternate Base Rate. “Adjusted LIBO Rate” means,
with respect to any Eurodollar Borrowing for any Interest Period, an interest
rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to
(a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory
Reserve Rate. “Administrative Agent” means Mizuho Bank, Ltd. (including its
branches and affiliates), in its capacity as administrative agent for the
Lenders hereunder. “Administrative Questionnaire” means an Administrative
Questionnaire in a form supplied by the Administrative Agent. “Affiliate” means,
with respect to a specified Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified. “Affiliate Service Agreements” means
any contract or agreement between the Borrower or any Subsidiary and an
Affiliate thereof providing for accounting, tax, treasury, intercompany services
or other professional services to the Borrower or any Subsidiary. “Agent Party”
has the meaning assigned to such term in Section 9.01(d). “Agents” means,
collectively, the Administrative Agent and the Collateral Agent. “Aggregate
Commitment” means the aggregate of the Commitments of all of the Lenders, as
reduced or increased from time to time pursuant to the terms and conditions
hereof. As of the Effective Date, the Aggregate Commitment is $210,000,000.
“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on
such day plus ½ of 1% and (c) the Adjusted LIBO Rate for a one month Interest
Period on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1%, provided that, for the purpose of this
definition, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen
Rate (or if the LIBO Screen Rate is not available for such one month Interest
Period, the Interpolated Rate) at approximately 11:00 a.m. London time on such
day. Any change in the Alternate Base Rate due to a change in the Prime Rate,
the NYFRB Rate or the Adjusted LIBO Rate shall be effective from and including
the effective date of such change in the Prime Rate, the NYFRB Rate or the
Adjusted LIBO Rate, respectively. If the Alternate Base Rate is being used as an
alternate rate of interest pursuant to Section 2.14 hereof, then the Alternate
Base Rate shall be the greater of clause (a) and (b) above and shall be
determined without reference to

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clause (c) above. For the avoidance of doubt, if the Alternate Base Rate shall
be less than zero, such rate shall be deemed to be zero for purposes of this
Agreement. “Annual Report” means the audited consolidated financial statements
of the Borrower and its Subsidiaries for the fiscal year ending December 31,
2018. “Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or its Subsidiaries from time to time
concerning or relating to bribery or corruption. “Applicable Percentage” means,
with respect to any Lender, with respect to Loans, the percentage equal to a
fraction the numerator of which is such Lender’s Commitment and the denominator
of which is the Aggregate Commitment of all Lenders (or, if the Commitments have
terminated or expired, the Applicable Percentages shall be determined based upon
the percentage equal to a fraction the numerator of which is such Lender’s Loans
and the denominator of which is the aggregate outstanding principal amount of
all Loans); provided that in the case of Section 2.21 when a Defaulting Lender
shall exist, any such Defaulting Lender’s Commitment or Loans, as applicable,
shall be disregarded in the calculation. “Applicable Rate” means, for any day,
with respect to (a) any Eurodollar Loan, 0.875% per annum and (b) any ABR Loan,
0.000% per annum. “Approved Bank” has the meaning specified in clause (c) of the
definition of “Cash Equivalents”. “Approved Fund” has the meaning assigned to
such term in Section 9.04(b). “Assignment and Assumption” means an assignment
and assumption agreement entered into by a Lender and an assignee (with the
consent of any party whose consent is required by Section 9.04), and accepted by
the Administrative Agent, in the form of Exhibit A or any other form approved by
the Administrative Agent. “Attributable Receivables Indebtedness” at any time
shall mean the principal amount of Indebtedness which (a) if a Receivables
Facility is structured as a secured lending agreement, constitutes the principal
amount of such Indebtedness or (b) if a Receivables Facility is structured as a
purchase agreement, would be outstanding at such time under the Receivables
Facility if the same were structured as a secured lending agreement rather than
a purchase agreement. For purposes of this definition, “Receivables Facility”
shall mean any receivables or securitization facility or facilities made
available to the Borrower or any of its Subsidiaries pursuant to which assets
and related security are sold, pledged or otherwise transferred to certain
investors or creditors, either directly or indirectly through one or more
special purpose entities. “Augmenting Lender” has the meaning assigned to such
term in Section 2.20. “Authorized Officer” means the chief executive officer,
president, chief financial officer, chief accounting officer, vice president
finance, treasurer or assistant treasurer or other similar officer of the
Borrower or any Subsidiary and, as to any document delivered on the Effective
Date, any secretary or assistant secretary of the Borrower or any Subsidiary.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution. “Bail-In Legislation” means, with respect to any EEA
Member Country implementing Article 55 of Directive 2014/59/EU of the European
Parliament and of the Council of the European Union, the implementing law for
such EEA Member Country from time to time which is described in the EU Bail-In
Legislation Schedule. 2

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“Banking Services” means each and any of the following bank services provided to
the Borrower by any Lender or any of its Affiliates: (a) credit cards for
commercial customers (including, without limitation, commercial credit cards and
purchasing cards), (b) stored value cards, (c) merchant processing services and
(d) treasury management services (including, without limitation, controlled
disbursement, automated clearinghouse transactions, return items, any direct
debit scheme or arrangement, overdrafts and interstate depository network
services). “Banking Services Agreement” means any agreement entered into by the
Borrower or any Subsidiary in connection with Banking Services. “Banking
Services Obligations” means any and all obligations of the Borrower or any
Subsidiary, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services. “Bankruptcy Event” means, with respect to any Person, such Person
becomes the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee, administrator, custodian, assignee for the
benefit of creditors or similar Person charged with the reorganization or
liquidation of its business appointed for it, or, in the good faith
determination of the Administrative Agent, has taken any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any such
proceeding or appointment, provided that a Bankruptcy Event shall not result
solely by virtue of any direct or indirect ownership interest, or the
acquisition of any direct or indirect ownership interest, in such Person by a
Governmental Authority or instrumentality thereof, provided, further, that such
ownership interest does not result in or provide such Person with immunity from
the jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Person (or such
Governmental Authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person. “Beneficial Ownership
Certification” means a certification regarding beneficial ownership as required
by the Beneficial Ownership Regulation. “Beneficial Ownership Regulation” means
31 C.F.R. § 1010.230. “Board” means the Board of Governors of the Federal
Reserve System of the United States of America. “Borrower” means Puget Energy,
Inc., a Washington corporation. “Borrower Group” means the Borrower and the
Operating Companies and “Borrower Group Member” means any of the Borrower or any
Operating Company. “Borrowing” means Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect. “Borrowing Request” means the initial
request by the Borrower for a Borrowing on the Effective Date in accordance with
Section 2.03. “Business Day” means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in Dollars in the London interbank market.
“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) property, or a combination thereof, which obligations are
required to be classified and accounted for as capital leases on a balance sheet
of such Person under GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP; provided,
however, that with respect to any 3

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changes in GAAP occurring after October 1, 2018, the effect of which is to cause
leases of the type in effect as of December 31, 2017 and treated as operating
leases under GAAP as of December 31, 2017 to be reclassified as capital leases
under GAAP, the definition of Capital Lease Obligation shall exclude any such
reclassified leases. “Cash Equivalents” means any of the following types of
Investments, to the extent owned by the Borrower or any Subsidiary: (a) Dollars
held by it from time to time in the ordinary course of business; (b) readily
marketable obligations issued or directly and fully guaranteed or insured by the
government or any agency or instrumentality of the United States and having
maximum maturities of not more than one (1) year from the date of acquisition
thereof; (c) investments in certificates of deposit, banker’s acceptances and
time deposits maturing within one hundred eighty (180) days from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of not
less than $1,000,000,000 (such bank, an “Approved Bank”); (d) commercial paper
and variable or fixed rate notes issued by an Approved Bank or commercial paper
and variable or fixed rate notes issued by, or guaranteed by, a corporation
rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent
thereof) or better by Moody’s, in each case with maximum maturities of not more
than two hundred seventy (270) days from the date of acquisition thereof;
provided that, no more than $50,000,000 in the aggregate of such commercial
paper per issuer shall be held at any time; (e) repurchase agreements fully
secured by obligations described in clause (b) above with any Approved Bank; and
(f) Investments with maximum maturities of twelve (12) months or less from the
date of acquisition in (i) money market funds rated AAA (or the equivalent
thereof) or better by S&P or Aaa (or the equivalent thereof) or better by
Moody’s that are registered under the Investment Company Act of 1940, as
amended, and the portfolios of which are limited solely to Investments of the
character, quality and maturity described in the foregoing clauses (b), (c), (d)
and (e) or (ii) the Federal Municipal Obligations Fund (or its successors) so
long as such fund is rated AA (or the equivalent thereof) or better by S&P or
Fitch Ratings Ltd. at the time of such Investment. “Change in Control” means the
Permitted Holders shall fail to (i) own and control directly or indirectly, in
the aggregate more than 50.1% of the issued and outstanding common Equity
Interests in Puget Holdings, the Parent or the Borrower and (ii) control the
board of directors (or comparable governing body) of Puget Holdings, the Parent
or the Borrower, as the case may be. “Change in Law” means the occurrence, after
the date of this Agreement (or with respect to any Lender, if later, the date on
which such Lender becomes a Lender), of any of the following: (a) the adoption
or taking effect of any law, rule, regulation or treaty after the date of this
Agreement, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority after the date of this Agreement or (c) compliance by 4

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any Lender (or, for purposes of Section 2.15(b), by any lending office of such
Lender or by such Lender’s holding company, if any) with, the making of or
issuance of any request, rules, guideline, requirement or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the date of this Agreement; provided, however, that notwithstanding anything
herein to the contrary, the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines, requirements and directives
thereunder, issued in connection therewith or in implementation thereof, and
(ii) all requests, rules, guidelines, requirements and directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted, issued or implemented. “Code” means the Internal Revenue Code of 1986,
as amended. “Collateral” means all the “Collateral”, as defined in the Security
Agreement and the Pledge Agreement. “Collateral Agency Agreement” means the
Amended and Restated Collateral Agency Agreement, dated as of February 6, 2009
and amended and restated as of March 31, 2010 and further amended as of February
10, 2012, among the Collateral Agent, JPMorgan Chase Bank, N.A., certain
authorized representatives, Puget Equico LLC and the Borrower, a copy of which
is attached hereto as Exhibit H. “Collateral Agent” means JPMorgan Chase Bank,
National Association or one of its affiliates, as successor to Barclays Bank
PLC, in its capacity as collateral agent under the Collateral Agency Agreement
and the other Security Documents, or any successor thereto in accordance with
the terms of the Collateral Agency Agreement. “Commitment” means, with respect
to each Lender, the commitment of such Lender, to make a Loan to the Borrower on
the Effective Date pursuant to Section 2.01. The initial amount of each Lender’s
Commitment with respect to the Loans is set forth on Schedule 2.01.
“Communication” has the meaning assigned to such form in Section 9.01(d).
“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes. “Consolidated Current Liabilities” means, at any date, all
amounts (without duplication that would, in conformity with GAAP, be set forth
opposite the caption “total current liabilities” (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such date
(other than (i) the current portion of any funded Indebtedness, (ii) without
duplication of clause (i) above, all Indebtedness consisting of revolving loans
to the extent otherwise included therein, (iii) unrealized losses on derivative
instruments, (iv) any current portion of deferred taxes, (v) accrued expenses
related to taxes and interest, (vi) purchased gas adjustment payables and (vii)
all amounts set forth opposite the caption “other current liabilities” on the
consolidated balance sheet of the Borrower and its Subsidiaries for the relevant
period). “Consolidated Tangible Net Assets” means at any date, the total of all
assets of the Borrower Group (including revaluations thereof as a result of
commercial appraisals, price level restatement or otherwise) as set forth on the
balance sheet most recently delivered to the Lenders pursuant to Section 5.01
net of applicable reserves and deductions but excluding goodwill, trade names,
trademarks, unamortized debt discount and all other like intangible assets
(which term shall not be construed to include such revaluations) less the
aggregate of the Consolidated Current Liabilities of the Borrower Group
appearing on such balance sheet. 5

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“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. The
terms “Controlling” and “Controlled” have meanings correlative thereto. “Credit
Event” means a Borrowing. “Credit Party” means the Administrative Agent or any
other Lender. “Debtor Relief Laws” means the Bankruptcy Code of the United
States, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally. “Default” means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default. “Defaulting Lender” means any Lender that
(a) has failed, within two (2) Business Days of the date required to be funded
or paid, to (i) fund any portion of its Loans or (ii) pay over to any Credit
Party any other amount required to be paid by it hereunder, unless, in the case
of clause (i) above, such Lender notifies the Administrative Agent in writing
that such failure is the result of such Lender’s good faith determination that a
condition precedent to funding (specifically identified and including the
particular default, if any) has not been satisfied, (b) has notified the
Borrower or any Credit Party in writing, or has made a public statement to the
effect, that it does not intend or expect to comply with any of its funding
obligations under this Agreement (unless such writing or public statement
indicates that such position is based on such Lender’s good faith determination
that a condition precedent (specifically identified and including the particular
default, if any) to funding a Loan under this Agreement cannot be satisfied) or
generally under other agreements in which it commits to extend credit, (c) has
failed, within three (3) Business Days after request by a Credit Party, acting
in good faith, to provide a certification in writing from an authorized officer
of such Lender that it will comply with its obligations to fund prospective
Loans under this Agreement, provided that such Lender shall cease to be a
Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt
of such certification in form and substance reasonably satisfactory to it and
the Administrative Agent, or (d) has become the subject of (i) a Bankruptcy
Event or (ii) a Bail-In Action. “Disposition” or “Dispose” means the sale,
assignment, transfer or other disposition (including any Sale and Leaseback
Transaction and any termination of business lines) of any property by the
Borrower or any of its Subsidiaries to any Person, including any sale,
assignment, transfer or other disposal, with or without recourse, of any notes
or accounts receivable or any rights and claims associated therewith. “Dollars”
or “$” refers to lawful money of the United States of America. “EEA Financial
Institution” means (a) any institution established in any EEA Member Country
which is subject to the supervision of an EEA Resolution Authority, (b) any
entity established in an EEA Member Country which is a parent of an institution
described in clause (a) of this definition, or (c) any institution established
in an EEA Member Country which is a subsidiary of an institution described in
clauses (a) or (b) of this definition and is subject to consolidated supervision
with its parent. “EEA Member Country” means any of the member states of the
European Union, Iceland, Liechtenstein, and Norway. 6

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“EEA Resolution Authority” means any public administrative authority or any
Person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution. “Effective Date” means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
9.02). “Electronic Signature” means an electronic sound, symbol, or process
attached to, or associated with, a contract or other record and adopted by a
Person with the intent to sign, authenticate or accept such contract or record.
“Electronic System” means any electronic system, including e-mail, e-fax,
Intralinks®, ClearPar®, Debt Domain, Syndtrak and any other Internet or
extranet-based site, whether such electronic system is owned, operated or hosted
by the Administrative Agent and any of its respective Related Parties or any
other Person, providing for access to data protected by passcodes or other
security system. “Environmental Laws” means any and all federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
initiatives, decrees, permits, concessions, grants, franchises, licenses,
agreements or governmental restrictions relating to pollution, the protection of
the environment, natural resources, or, to the extent relating to exposure to
Hazardous Materials, human health or safety or to the release of any Hazardous
Materials into the environment, including air emissions and discharges to waste
or public systems. “Environmental Liability” means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing. “Environmental Permit” means any permit, approval, identification
number, license or other authorization required from any Governmental Authority
under any Environmental Law. “Equity Interests” means, with respect to any
Person, all of the shares, membership interests, rights, participations or other
equivalents (however designated) of capital stock of (or other ownership or
profit interests or units in) such Person and all of the warrants, options or
other rights for the purchase, acquisition or exchange from such Person of any
of the foregoing (including through convertible securities). “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, under Section 414(m) or (o) of the Code. “ERISA Event”
means (a) any reportable event, as defined in Section 4043 of ERISA, or the
regulations issued thereunder, with respect to a Plan (other than an event for
which the 30-day notice period is waived); (b) the existence with respect to any
Plan of an “unpaid minimum required contribution” which means, with respect to
any plan year, any minimum required contribution under Section 430 of the Code
for the plan year which is not paid on or before the due date (as determined
under Section 430(j)(1) of the Code) for the plan year; (c) the filing pursuant
to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by the Borrower or any of its ERISA Affiliates of any liability under
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of ERISA with respect to the termination of any Plan; (e) the receipt by the
Borrower or any ERISA Affiliate from the PBGC or a plan administrator of notice
of the intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
of the Borrower or any of its ERISA Affiliates from any Plan or Multiemployer
Plan; or (g) the receipt by the Borrower or any ERISA Affiliate from any
Multiemployer Plan of notice of (i) the imposition upon the Borrower or any of
its ERISA Affiliates of Withdrawal Liability or (ii) a determination that such
Multiemployer Plan is, or is expected to be, insolvent, within the meaning of
Title IV of ERISA. “EU Bail-In Legislation Schedule” means the EU Bail-In
Legislation Schedule published by the Loan Market Association (or any successor
Person), as in effect from time to time. “Eurodollar”, when used in reference to
any Loan or Borrowing, means that such Loan, or the Loans comprising such
Borrowing, bears interest at a rate determined by reference to the Adjusted LIBO
Rate. “Event of Default” has the meaning assigned to such term in Article VII.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. Federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Borrower under Section 2.19(b)) or (ii) such Lender changes its lending office,
except in each case to the extent that, pursuant to Section 2.17, amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender acquired the applicable interest in a Loan or Commitment or
to such Lender immediately before it changed its lending office, (c) Taxes
attributable to such Recipient’s failure to comply with Section 2.17(f), (d) any
U.S. Federal withholding Taxes imposed under FATCA and (e) any Business and
Occupation Taxes imposed by the State of Washington. “Existing Indebtedness”
means (a) Indebtedness under this Agreement, (b) Indebtedness of the Borrower or
any Subsidiary that is outstanding on the Effective Date and listed on Schedule
1.01(a) and (c) any Permitted Refinancing Indebtedness thereof. “FATCA” means
Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any
amended or successor version that is substantively comparable and not materially
more onerous to comply with), any current or future regulations or official
interpretations thereof and any agreement entered into pursuant to Section
1471(b)(1) of the Code. “Federal Funds Effective Rate” means, for any day, the
rate calculated by the NYFRB based on such day’s federal funds transactions by
depository institutions (as determined in such manner as the NYFRB shall set
forth on its public website from time to time) and published on the next
succeeding Business Day by the NYFRB as the federal funds effective rate. For
the avoidance of doubt, if the Federal Funds Effective Rate shall be less than
zero, such rate shall be deemed to be zero for purposes of this Agreement.
“Financial Officer” means the chief financial officer, principal accounting
officer, vice president finance, treasurer or assistant treasurer of the
Borrower. 8

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“Financing Documents” means (i) this Agreement, (ii) any promissory notes issued
pursuant to Section 2.10(e) of this Agreement, (iii) any Interest Hedging
Agreements with any Interest Rate Hedge Bank, (iv) the Security Documents, (v)
the Collateral Agency Agreement and (vi) all other agreements, instruments,
documents and certificates identified in Section 4.01 executed and delivered to,
or in favor of, the Administrative Agent or any Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, letter
of credit agreements and all other written matter whether heretofore, now or
hereafter executed by or on behalf of the Borrower, or any employee of the
Borrower, and delivered to the Administrative Agent or any Lender in connection
with this Agreement or the transactions contemplated hereby. Any reference in
this Agreement or any other Financing Document to a Financing Document shall
include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to
this Agreement or such Financing Document as the same may be in effect at any
and all times such reference becomes operative. “Fitch” means Fitch Inc., or any
successor thereto. “Flood Insurance Laws” means, collectively, (i) the National
Flood Insurance Reform Act of 1994 (which comprehensively revised the National
Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973) or
any successor statute thereto, as in effect from time to time, (ii) the Flood
Insurance Reform Act of 2004 or any successor statute thereto, as in effect from
time to time and (iii) the Biggert-Waters Flood Insurance Reform Act of 2012 or
any successor statute thereto, as in effect from time to time. “GAAP” means
generally accepted accounting principles in the United States of America.
“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra national bodies such as the European Union or the European Central
Bank) and any group or body charged with setting regulatory capital rules or
standards (including the Bank for International Settlements or the Basel
Committee on Banking Supervision or any successor or similar authority to any of
the foregoing). “Guarantee” means, as to any Person, without duplication, (a)
any obligation, contingent or otherwise, of such Person guaranteeing or having
the economic effect of guaranteeing any Indebtedness or other monetary
obligation payable or performable by another Person (the “Primary Obligor”) in
any manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or other monetary obligation
or to purchase (or to advance or supply funds for the purchase of) any security
for the payment thereof, (ii) to purchase or lease property, securities or
services for the purpose of assuring the obligee in respect of such Indebtedness
or other monetary obligation of the payment or performance of such Indebtedness
or other monetary obligation, (iii) to maintain working capital, equity capital
or any other financial statement condition or liquidity or level of income or
cash flow of the Primary Obligor so as to enable the Primary Obligor to pay such
Indebtedness or other monetary obligation, (iv) as an account party in respect
of any letter of credit or letter of guaranty issued to support such
Indebtedness or monetary obligation or (v) entered into for the purpose of
assuring in any other manner the obligee in respect of such Indebtedness or
other monetary obligation of the payment or performance thereof or to protect
such obligee against loss in respect thereof (in whole or in part), or (b) any
Lien on any assets of such Person securing any Indebtedness or other monetary
obligation of any other Person, whether or not such Indebtedness or other
monetary obligation is assumed by such Person (or any right, contingent or
otherwise, of any holder of such Indebtedness to obtain any such Lien); provided
that the term “Guarantee” shall not include endorsement for a collection or
deposit in the 9

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ordinary course of business. The amount of any Guarantee shall be deemed to be
an amount equal to the stated or determinable amount of the related primary
obligation, or portion thereof, in respect of which such Guarantee is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the guaranteeing Person in good faith. The term
“Guarantee” as a verb has a corresponding meaning. “Hazardous Materials” means
all explosive or radioactive substances or wastes and all hazardous or toxic
substances, wastes or pollutants, including petroleum or petroleum distillates,
asbestos or asbestos-containing materials, toxic mold, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other such substances
or wastes defined in or otherwise regulated as “hazardous” or “toxic” wastes or
substances under applicable Environmental Law. “Hostile Acquisition” means (a)
the acquisition of the Equity Interests of a Person through a tender offer or
similar solicitation of the owners of such Equity Interests which has not been
approved (prior to such acquisition) by the board of directors (or any other
applicable governing body) of such Person or by similar action if such Person is
not a corporation and (b) any such acquisition as to which such approval has
been withdrawn. “Hybrid Debt Securities” means (a) any securities, trust
preferred securities, or deferrable interest subordinated debt, which, in each
such case, provides for the optional or mandatory deferral of interest or
distributions, issued by any Borrower Group Member, or (b) Equity Interests of
any business trusts, limited liability companies, limited partnerships or
similar entities (i) substantially all of the Equity Interests of which are
owned (either directly or indirectly through one or more Subsidiaries) at all
times by any Borrower Group Member, (ii) that have been formed for the purpose
of issuing securities, trust preferred securities or deferrable interest
subordinated debt of the type described in clause (a) above, and (iii)
substantially all the assets of which consist of (x) subordinated debt issued by
any Borrower Group Member, and (y) payments made from time to time on such
subordinated debt. “Immaterial Subsidiary” means any Subsidiary (a) designated
on the Effective Date on Schedule 3.13 or designated as such by the Borrower
after the Effective Date in a notice delivered to the Administrative Agent and
(b) whose total assets (excluding intercompany receivables) at the relevant time
of determination have a gross asset value of less than 1% of total assets
(excluding intercompany receivables) of the Borrower and its Subsidiaries on a
consolidated basis as set forth on the most recent financial statements
delivered pursuant to Sections 4.01(c) or 5.01(a) and whose total consolidated
revenues for the twelve (12) months ending at the relevant time of determination
are less than 1% of total consolidated revenue of the Borrower and its
Subsidiaries as set forth on the most recent financial statements delivered
pursuant to Sections 4.01(c) or 5.01(a); provided that at no time shall all
Immaterial Subsidiaries so designated pursuant to this definition have in the
aggregate (x) total assets (excluding intercompany receivables) at the relevant
time of determination having a gross asset value in excess of 5% of total assets
(excluding intercompany receivables) of the Borrower and its Subsidiaries on a
consolidated basis as set forth on the most recent financial statements
delivered pursuant to Section 4.01(c) or 5.01(a) or (y) total consolidated
revenues for the twelve (12) months ending at the relevant time of determination
in excess of 5% of total consolidated revenue of the Borrower and its
Subsidiaries on a consolidated basis as set forth on the most recent financial
statements delivered pursuant to Sections 4.01(c) and 5.01(a); provided,
further, that (1) in the event that a Subsidiary no longer qualifies as an
Immaterial Subsidiary pursuant to clause (b) above, the Borrower shall advise
the Administrative Agent thereof in a notice delivered to the Administrative
Agent and (2) in the event that the Subsidiaries designated as Immaterial
Subsidiaries pursuant to this definition at the relevant time of determination
in the aggregate do not comply with the first proviso in this definition, the
Borrower shall designate one of more of such Subsidiaries as a Subsidiary which
is not an Immaterial Subsidiary in a notice delivered to the Administrative
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“Impacted Interest Period” has the meaning assigned to such term in the
definition of “LIBO Rate”. “Increasing Lender” has the meaning assigned to such
term in Section 2.20. “Incremental Term Loan” has the meaning assigned to such
term in Section 2.20. “Incremental Term Loan Amendment” has the meaning assigned
to such term in Section 2.20. “Indebtedness” of any Person means, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, including, without limitation, Hybrid Debt Securities, (c) all
obligations of such Person upon which interest charges are customarily paid, (d)
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person
of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (j) all obligations,
contingent or otherwise, of such Person in respect of bankers’ acceptances, (k)
net obligations of such Person under any Interest Hedging Agreement (the amount
of any such net obligation to be the amount that is or would be payable upon
settlement, liquidation, termination or acceleration thereof at the time of
calculation), (l) all Attributable Receivables Indebtedness of such Person, (m)
all obligations of such Person under Sale and Leaseback Transactions and (n) all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Redeemable Equity Interests in such Person or
any other Person or any warrants, rights or options to acquire such Equity
Interests, valued, in the case of Redeemable Preferred Interests, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor. For greater certainty, “Indebtedness” shall not include Indebtedness
in an amount equal to the aggregate amount of cash held by the Borrower and its
Subsidiaries and included in the cash accounts listed on the consolidated
balance sheet of the Borrower and its Subsidiaries and deposited with the
Administrative Agent for the repayment or refinancing of outstanding
Indebtedness of the Borrower and its Subsidiaries (other than equity securities
that are mandatorily redeemable 91 or more days after the Maturity Date and that
are Hybrid Debt Securities or otherwise classified as hybrid securities by
Moody’s, S&P and Fitch) within 90 days of the date of determination; provided
that the use thereof is not prohibited by law or any contract to which the
Borrower or any of its Subsidiaries is a party. “Indemnified Taxes” means (a)
Taxes, other than Excluded Taxes, imposed on or with respect to any payment made
by the Borrower under any Financing Document and (b) Other Taxes. “Intercompany
Loans” means loans, advances or other extensions of credit by any member of the
Borrower Group to any other member of the Borrower Group. “Interest Election
Request” means a request by the Borrower to convert or continue a Borrowing in
accordance with Section 2.08. “Interest Hedging Agreements” means any rate swap,
cap or collar agreement or similar arrangement between the Borrower and one or
more interest rate hedge providers designed to protect such Person against
fluctuations in interest rates. For purposes of this Agreement and the other
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Documents, the Indebtedness at any time of the Borrower under an Interest
Hedging Agreement shall be determined at such time in accordance with the
methodology set forth in such Interest Hedging Agreement. “Interest Payment
Date” means (a) with respect to any ABR Loan, the last Business Day of each
March, June, September and December and the Maturity Date and (b) with respect
to any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months’ duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months’ duration after the first day of such Interest Period and the Maturity
Date. “Interest Period” means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending one week thereafter
or on the numerically corresponding day in the calendar month that is one, two,
three or six months thereafter, as the Borrower may elect; provided that (a) if
any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a period that is one, two, three or six months, such next succeeding Business
Day would fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day and (b) in the case of a period
that is one, two, three or six months, any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and,
in the case of a Borrowing, thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing. “Interest Rate Hedge Bank”
means (a) any Person that is a Lender or an Affiliate of a Lender at the time it
enters into an Interest Hedging Agreement or (b) Macquarie Bank Limited to the
extent it enters into an Interest Hedging Agreement, in each case in its
capacity as a party thereto. “Interpolated Rate” means, at any time, for any
Interest Period, the rate per annum determined by the Administrative Agent
(which determination shall be conclusive and binding absent manifest error) to
be equal to the rate that results from interpolating on a linear basis between:
(a) the LIBO Screen Rate for the longest period (for which the LIBO Screen Rate
is available) that is shorter than the Impacted Interest Period and (b) the LIBO
Screen Rate for the shortest period (for which the LIBO Screen Rate is
available) that exceeds the Impacted Interest Period, in each case, at such
time. When determining the rate for a period which is less than the shortest
period for which the LIBO Screen Rate is available, the LIBO Screen Rate for
purposes of paragraph (a) above shall be deemed to be the overnight screen rate
where “overnight screen rate” means the overnight rate determined by the
Administrative Agent from such service as the Administrative Agent may select.
“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests, Indebtedness or other securities of another
Person, (b) a loan, advance or capital contribution to, Guarantee or assumption
of Indebtedness of, or purchase or other acquisition of any other debt or Equity
Interest in, another Person, including any partnership or joint venture interest
in such other Person or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of all or substantially all of the
property and assets or business of another Person or assets constituting a
business unit, line of business or division of such Person. For purposes of
covenant compliance, the amount of any Investment shall be the amount actually
invested, without adjustment for subsequent increases or decreases in the value
of such Investment. “IRS” means the United States Internal Revenue Service. 12

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“Laws” means, collectively, all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law. “Lender Parent” means, with
respect to any Lender, any Person as to which such Lender is, directly or
indirectly, a subsidiary. “Lenders” means the Persons listed on Schedule 2.01
and any other Person that shall have become a Lender hereunder pursuant to
Section 2.20 or pursuant to an Assignment and Assumption or other documentation
contemplated hereby, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Assumption or other documentation contemplated
hereby. “Leverage Ratio” means, as of any date of determination, the ratio of
(a) Total Funded Indebtedness at such date, to (b) Total Capitalization at such
date. “LIBO Rate” means, with respect to any Eurodollar Borrowing and for any
applicable Interest Period, the LIBO Screen Rate at approximately 11:00 a.m.,
London time, two (2) Business Days prior to the commencement of such Interest
Period; provided that, if the LIBO Screen Rate shall not be available at such
time for such Interest Period (the “Impacted Interest Period”), then the LIBO
Rate for such Interest Period shall be the Interpolated Rate. “LIBO Screen Rate”
means, for any day and time, with respect to any Eurodollar Borrowing and for
any Interest Period, the London interbank offered rate as administered by ICE
Benchmark Administration (or any other Person that takes over the administration
of such rate) for Dollars for a period equal in length to such Interest Period
as displayed on such day and time on pages LIBOR01 or LIBOR02 of the Reuters
screen that displays such rate (or, in the event such rate does not appear on a
Reuters page or screen, on any successor or substitute page on such screen that
displays such rate, or on the appropriate page of such other information service
that publishes such rate from time to time as selected by the Administrative
Agent in its reasonable discretion); provided that if the LIBO Screen Rate shall
be less than zero, such rate shall be deemed to be zero for the purposes of this
Agreement. “Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement, of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any easement, right of way or other encumbrance on title to real
property, and any Capital Lease Obligation having substantially the same
economic effect as any of the foregoing). “LNG Co.” means a wholly owned
Subsidiary of the Borrower. “Loans” means the loans made by the Lenders to the
Borrower pursuant to this Agreement. “Macquarie” means The Macquarie Capital
Group, which includes Macquarie Capital Group Limited, its direct or indirect
subsidiaries, and the funds (or similar vehicles) they manage. “Management Fees”
means, for any period, the aggregate amount of all payments (including all fees,
salaries and other compensation, but excluding amounts payable under Affiliate
Service Agreements) paid or incurred by the Borrower and its Subsidiaries during
such period to any of their Affiliates (including Macquarie) and not otherwise a
Restricted Payment; provided that Management Fees shall not include amounts
payable to an Affiliate (i) in its capacity as a Lender pursuant to this
Agreement or any Financing Document, (ii) in its capacity as an interest rate
hedge provider pursuant to an Interest Hedging Agreement to the extent such
Interest Hedging Agreement complies with Section 13

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6.06(a)(i) or (iii) in its capacity as a lender pursuant to other Indebtedness
permitted under this Agreement to the extent such arrangements comply with
Section 6.06(a)(i) and such Affiliate is not an arranger, agent or underwriter
of such Indebtedness. “Material Adverse Effect” means a material adverse effect
on (a) the business, assets, operations, condition (financial or otherwise) of
the Borrower and the Subsidiaries taken as a whole, (b) the validity or
enforceability of this Agreement or any and all other Financing Documents or the
rights or remedies of the Administrative Agent and the Lenders thereunder, (c)
the ability of the Borrower to perform any of its obligations under this
Agreement or any Financing Document, or (d) the material rights or remedies of
the Administrative Agent and the Lenders under this Agreement or any Financing
Document. “Material Communications” means, with respect to any Contractual
Obligation, any communication by the Borrower or any of its Subsidiaries with
any Governmental Authority or any party to such Contractual Obligation regarding
an event or circumstance that could reasonably be expected to result in a
Material Adverse Effect. “Material Indebtedness/Material Swap Obligations” means
(a) Indebtedness (other than the Loans), or (b) obligations in respect of one or
more Swap Agreements, of any one or more of the Borrower and its Subsidiaries,
in the case of (a) or (b), in an aggregate principal amount exceeding
$50,000,000. For purposes of determining Material Indebtedness/Material Swap
Obligation, the “principal amount” of the obligations of the Borrower or any
Subsidiary in respect of any Swap Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower or
such Subsidiary would be required to pay if such Swap Agreement were terminated
at such time. “Material Notices” means, with respect to any material Contractual
Obligation, any notice sent or received by the Borrower or any of its
Subsidiaries regarding a material event or circumstance, including the
occurrence of any default under such Contractual Obligation or termination of
such Contractual Obligation or any other development that could reasonably be
expected to result in a Material Adverse Effect. “Maturity Date” means September
26, 2022. “MIRE Event” means, if there are any Mortgaged Real Properties at such
time, any increase, extension or renewal of any of the Commitments or Loans
(including Incremental Term Loans or any other incremental credit facilities
pursuant to Section 2.20 or otherwise, but excluding (i) any continuation or
conversion of Borrowings or (ii) the making of any Loan). “Mizuho” means Mizuho
Bank, Ltd. “Moody’s” means Moody’s Investors Service, Inc. “Mortgage” means each
mortgage, deed of trust or other agreement which conveys or evidences a Lien in
favor of the Collateral Agent, for the benefit of the Secured Parties, on real
property of the Borrower or any Subsidiary, including any amendment,
restatement, modification or supplement thereto. “Mortgaged Real Property” means
each parcel of real property subject to, or required to be subject to, pursuant
to any Financing Document, a Mortgage. “Multiemployer Plan” means a
multiemployer plan as defined in Section 4001(a)(3) of ERISA. “Net Cash
Proceeds” means with respect to any Disposition by any member of the Borrower
Group or any issuance of Indebtedness by any member of the Borrower Group, the
gross proceeds of all cash actually received by such Borrower Group Member in
connection with such 14

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Disposition or issuance; provided that (i) Net Cash Proceeds shall be net of:
(a) the amount of any legal, advisory, title, transfer and recording tax
expenses, commissions and other fees and expenses paid by the Borrower or the
applicable Subsidiary in connection with such transaction and (b) any federal,
state and local income or other taxes estimated to be payable by Puget Holdings,
the Borrower or the applicable Subsidiary as a result of such transaction (but
only to the extent that such estimated taxes are in fact paid to the relevant
federal, state or local Governmental Authority when due; provided that at the
time such taxes are paid, an amount equal to the amount, if any, by which such
estimated taxes exceed the amount of taxes actually paid shall constitute “Net
Cash Proceeds” for all purposes hereunder), (ii) with respect to any
Disposition, Net Cash Proceeds shall be net of any repayments by the Borrower or
the applicable Subsidiary of Indebtedness to the extent that (x) such
Indebtedness is secured by a Lien permitted by Section 6.01 on the Property that
is the subject of such Disposition and (y) the transferee of (or holder of a
Lien on) such Property requires that such Indebtedness be repaid, (iii) for all
Dispositions, Net Cash Proceeds shall be net of any earn out or other similar
obligation owed by the Borrower or applicable Subsidiary in connection with the
acquisition thereof, (iv) Net Cash Proceeds shall be net of any reserve for
adjustment in respect of (x) the sale price of such asset or assets established
in accordance with GAAP and (y) any liabilities (other than taxes deducted
pursuant to clause (b) above) associated with such asset or assets and retained
by any Borrower Group Member after such sale or other disposition thereof,
including pension and other postemployment benefit liabilities and liabilities
related to environmental matters or with respect to any indemnification
obligations associated with such transaction, and it being understood that “Net
Cash Proceeds” shall include (A) any cash or Cash Equivalents received upon the
Disposition of any non-cash consideration by any Borrower Group Member in any
such Disposition and (B) upon the reversal (without the satisfaction of any
applicable liabilities in cash in a corresponding amount) of any reserve
described in this clause (iv) or if such liabilities have not been satisfied in
cash and the remaining amount of such reserve is not reversed within 365 days
after such Disposition, the remaining amount of such reserve and (v) if the
applicable cash payments are in the first instance received by a Subsidiary that
is not a wholly-owned Subsidiary, the related Net Cash Proceeds shall be net of
the proportionate share of the common Equity Interests of such Subsidiary (and
of any intermediate Subsidiary) owned by Persons that are not wholly-owned
Subsidiaries of the Borrower. “Non-U.S. Lender” means a Lender that is not a
U.S. Person. “NYFRB” means the Federal Reserve Bank of New York. “NYFRB Rate”
means, for any day, the greater of (a) the Federal Funds Effective Rate in
effect on such day and (b) the Overnight Bank Funding Rate in effect on such day
(or for any day that is not a Business Day, for the immediately preceding
Business Day); provided that if none of such rates are published for any day
that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds
transaction quoted at 11:00 a.m. on such day received by the Administrative
Agent from a Federal funds broker of recognized standing selected by it;
provided, further, that if any of the aforesaid rates shall be less than zero,
such rate shall be deemed to be zero for purposes of this Agreement.
“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations and indebtedness (including interest and fees
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding), obligations and liabilities of the Borrower to any of the Lenders,
the Administrative Agent or any indemnified party, individually or collectively,
existing on the Effective Date or arising thereafter, direct or indirect, joint
or several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise, arising or incurred under this Agreement or any of the other
Financing Documents or to the Lenders or any of their Affiliates under any Swap
Agreement or any Banking Services Agreement or in respect of any of the Loans
made or reimbursement or other obligations incurred or any other instruments at
any time evidencing any thereof. 15

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“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the
Treasury. “Operating Company” means PSE and each other Subsidiary of the
Borrower other than any Immaterial Subsidiary and, for the avoidance of doubt,
the term Operating Company shall include Puget Western, Inc. “Operating Company
Credit Agreement” means any credit agreement, loan agreement, reimbursement
agreement, indenture, supplemental indenture or other agreement evidencing
Indebtedness that is entered into by PSE or any other Operating Company.
“Organizational Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement or limited liability
company agreement; and (c) with respect to any partnership, joint venture, trust
or other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or
organization with the applicable Governmental Authority in the jurisdiction of
its formation or organization and, if applicable, any certificate or articles of
formation or organization of such entity. “Other Connection Taxes” means, with
respect to any Recipient, Taxes imposed as a result of a present or former
connection between such Recipient and the jurisdiction imposing such Tax (other
than connections arising from such Recipient having executed, delivered, become
a party to, performed its obligations under, received payments under, received
or perfected a security interest under, engaged in any other transaction
pursuant to or enforced any Financing Document, or sold or assigned an interest
in any Loan or Financing Document). “Other Hedging Agreements” means any swap,
cap or collar agreement or similar arrangement entered into by any Borrower
Group Member designed to protect any Borrower Group Member against fluctuations
in currency exchange rates or commodity prices. “Other Taxes” means any present
or future stamp, court, documentary, intangible, recording, filing or similar
excise or property Taxes that arise from any payment made under, from the
execution, delivery, performance, enforcement or registration of, or from the
registration, receipt or perfection of a security interest under, or otherwise
with respect to, any Financing Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
under Section 2.19(b)). “Overnight Bank Funding Rate” means, for any day, the
rate comprised of both overnight federal funds and overnight Eurodollar
borrowings by U.S.–managed banking offices of depository institutions (as such
composite rate shall be determined by the NYFRB as set forth on its public
website from time to time) and published on the next succeeding Business Day by
the NYFRB as an overnight bank funding rate (from and after such date as the
NYFRB shall commence to publish such composite rate). “Parent” means the Person
that is the direct owner of 100% of the Equity Interests of the Borrower, which
as of the Effective Date, is Puget Equico LLC, a Washington limited liability
company; provided that the Parent shall be a direct or indirect wholly-owned
Subsidiary of Puget Holdings. “Parent Holdco” means the Person that is the
direct owner of 100% of the Equity Interests of the Parent. “Participant” has
the meaning assigned to such term in Section 9.04. “Participant Register” has
the meaning assigned to such term in Section 9.04(c). 16

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“Patriot Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)). “PBGC” means the Pension Benefit Guaranty
Corporation referred to and defined in ERISA and any successor entity performing
similar functions. “Permitted Acquisition” means an acquisition consummated by
the Borrower directly or through a wholly-owned direct or indirect Subsidiary of
the Borrower (including any newly formed wholly-owned direct or indirect
Subsidiary of the Borrower (a “Newco”)), of all or substantially all, of the
assets of or shares or other Equity Interests in a Person, or division or line
of business of a Person (other than inventory, leases, materials and equipment
in the ordinary course of business), in each case that is engaged in
substantially the same general line of business or businesses as those in which
the Borrower (not including any of its Subsidiaries for this purpose) is engaged
or businesses reasonably related, complementary or ancillary thereto; provided
that: (i) such acquisition shall be consensual and shall have been approved by
the board of directors (or similar governing body) of the Person whose Equity
Interests or assets are proposed to be acquired and shall not have been preceded
by an unsolicited tender offer for such Equity Interests by, or proxy contest
initiated by, Borrower or any of its Subsidiaries; (ii) in the event that such
acquisition results in a merger, amalgamation or consolidation of the Borrower,
the Borrower shall be the surviving corporation; (iii) an Authorized Officer of
the Borrower shall have delivered a certificate substantially in the form of
Exhibit J, attesting to the Solvency of the Borrower and its Subsidiaries (taken
as a whole, including the acquired Person or assets, after giving effect to such
acquisition); (iv) any Liens assumed in connection with such acquisition are
otherwise permitted under Section 6.01; (v) [reserved]; (vi) [reserved]; (vii)
no Default or Event of Default shall exist immediately prior to such acquisition
or, after giving effect to such acquisition, shall have occurred and be
continuing, or would result from the consummation of the proposed acquisition;
and (viii) the Borrower and the Subsidiaries are in compliance, on a pro forma
basis reasonably acceptable to the Administrative Agent after giving effect to
such acquisition (but without giving effect to any synergies or cost savings),
with the covenant contained in Section 6.09 recomputed as of the last day of the
most recently ended fiscal quarter of the Borrower for which financial
statements are available, as if such acquisition (and any related incurrence or
repayment of Indebtedness, with any new Indebtedness being deemed to be
amortized over the applicable testing period in accordance with its terms) had
occurred on the first day of each relevant period for testing such compliance
and, if the aggregate consideration paid in respect of such acquisition exceeds
$500,000,000, the Borrower shall have delivered to the Administrative Agent a
certificate of a Financial Officer of the Borrower to such effect, together with
all relevant financial information, statements and projections requested by the
Administrative Agent. “Permitted Collateral Liens” means Liens of the type
specified in Section 6.01(e), (m), (n), (p), and (u). “Permitted Holders” means
the Persons listed on Schedule 1.01(b) hereto. “Permitted Refinancing
Indebtedness” means any Indebtedness of any Borrower Group Member, as
applicable, issued in exchange for, or the Net Cash Proceeds of which are used
to refund, 17

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refinance, replace, defease or discharge Existing Indebtedness; provided, that
such Indebtedness shall not be required to reduce any commitment with respect to
such Existing Indebtedness; and provided further, that: (i) The principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount (or accreted value, if applicable) of and
any unfunded commitment under the Indebtedness extended, refinanced, renewed,
replaced, defeased or refunded (plus (x) all refinancing fees and expenses
incurred in connection therewith including, without limitation, underwriting
fees, closing fees, agency fees, premiums, make- whole amounts or original issue
discount and LIBO breakage costs due in accordance with Section 2.16 of this
Agreement and other reasonable out-of-pocket expenses incurred by the Borrower
and (y) an amount equal to any termination payment paid pursuant to an Interest
Hedging Agreement which has been terminated by the Borrower in connection with
the incurrence of any Permitted Refinancing Indebtedness); (ii) Such Permitted
Refinancing Indebtedness has weighted average life to maturity equal to or
greater than the weighted average life to maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (iii) If the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is subordinated in right of payment to this Agreement, such Permitted
Refinancing Indebtedness is subordinated in right of payment to this Agreement
on terms, taken as whole, at least as favorable to the Lenders as the
subordination terms contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; provided
that a certificate of an Authorized Officer of the Borrower is delivered to the
Administrative Agent at least five (5) Business Days (or such shorter period as
the Administrative Agent may reasonably agree) prior to the incurrence of such
Indebtedness, together with a reasonably detailed description of the material
terms and conditions of such subordination terms or drafts of the documentation
relating thereto, stating that the Borrower has determined in good faith that
such terms and conditions satisfy the foregoing requirement, and such
certificate shall be conclusive evidence that such terms and conditions satisfy
the foregoing requirement unless the Administrative Agent notifies the Borrower
within such period that it disagrees with such determination (including a
reasonable description of the basis upon which it disagrees); (iv) Such
Indebtedness is incurred by the Person who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; (v) The
Permitted Refinancing Indebtedness is not secured by any Collateral not granted
to the holders of the Indebtedness being financed, renewed, replaced, defeased
or refunded; and (vi) Such Permitted Refinancing Indebtedness shall have terms
which shall be no more restrictive taken as a whole, and shall not, taken as a
whole, be materially less favorable, in any respect on the Borrower or the
Operating Companies than the provisions of the Indebtedness being refinanced,
renewed, replaced, defeased or refunded; provided, however, that the foregoing
requirements shall not apply to pricing terms in respect of any Indebtedness
being so refinanced so long as such pricing is consistent with then-prevailing
market pricing. “Person” means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity. “Plan” means any employee pension
benefit plan (other than a Multiemployer Plan) subject to the provisions of
Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in
respect of which the Borrower or any ERISA Affiliate is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as
defined in Section 3(5) of ERISA. 18

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“Platform” means Debt Domain, Intralinks, Syndtrak or a substantially similar
electronic transmission system. “Pledge Agreement” means the Amended and
Restated Pledge Agreement, dated as of February 6, 2009 and amended and restated
as of March 31, 2010, from Puget Equico LLC, as pledgor to Collateral Agent (as
amended, restated, supplemented or otherwise modified from time to time), a copy
of which is attached hereto as Exhibit K. “Preferred Interests” means, with
respect to any Person, Equity Interests issued by such Person that are entitled
to a preference or priority over any other Equity Interests issued by such
Person upon any distribution of such Person’s property and assets, whether by
dividend or upon liquidation. “Prime Rate” means the interest rate most recently
published in the Money Rates section of The Wall Street Journal from time to
time as the Prime Rate in the U.S. or, if The Wall Street Journal ceases to
quote such rate, the most current per annum interest rate published by the Board
of Governors of the Federal Reserve System in Federal Reserve Statistical
Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or,
if such rate is no longer quoted therein, any similar rate quoted therein (as
reasonably determined by the Administrative Agent) or any similar release by the
Board of Governors of the Federal Reserve System (as reasonably determined by
the Administrative Agent). Any change in such prime rate shall take effect at
the opening of business on the day specified in the public announcement of such
change. “Pro Forma Basis” means, with respect to any event, that the Borrower is
in compliance on a pro forma basis with the applicable covenant, calculation or
requirement herein recomputed as if the event with respect to which compliance
on a Pro Forma Basis is being tested had occurred on the first day of the four
fiscal quarter period most recently ended on or prior to such date for which
financial statements have been delivered pursuant to Section 5.01. “Property”
means any right or interest in or to property of any kind whatsoever, whether
real or personal, or mixed and whether tangible or intangible, and including,
for the avoidance of doubt, revenues and contractual rights. “PSE” means Puget
Sound Energy, Inc., a Washington corporation. “Puget Holdings” means Puget
Holdings LLC, a Delaware limited liability company. “Receivables Facility” means
any receivables or securitization facility or facilities made available to the
Borrower or any of its Subsidiaries pursuant to which assets and related
security are sold, pledged or otherwise transferred to certain investors or
creditors either directly, or indirectly through one or more special purpose
entities. “Recipient” means (a) the Administrative Agent and (b) any Lender, as
applicable. “Redeemable” means, with respect to any Equity Interest, any such
Equity Interest that (a) the issuer has undertaken to redeem at a fixed or
determinable date or dates, whether by operation of a sinking fund or otherwise,
or upon the occurrence of a condition not solely within the control of the
issuer or (b) is redeemable at the option of the holder. “Register” has the
meaning assigned to such term in Section 9.04(b). “Regulatory Approval” means
(a) any authorization, consent, approval, license, ruling, permit, tariff,
certification, waiver, exemption, filing required by chapter 80.08 or 80.12 RCW,
variance, order, judgment or decree of, by, or by any Borrower Group Member, the
Parent, Parent Holdco (to the extent such Person is not Puget Holdings) or Puget
Holdings with, (b) any required notice by any Borrower Group Member, (c) any
declaration containing material obligations of any Borrower Group Member made by
or filed with, or (d) any Borrower Group Member registration by or with, any
Governmental Authority. 19

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“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents, advisors
and representatives of such Person and such Person’s Affiliates. “Required
Lenders” means (a) Lenders holding more than 50% of the Aggregate Commitments or
(b) if all Commitments have been terminated or reduced to zero, Lenders holding
more than 50% of the principal amount of the aggregate outstanding Loans.
“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property, other than common Equity Interests in the
Borrower) on account of any Equity Interest of any Borrower Group Member, or any
payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
defeasance, acquisition, cancellation or termination of any such Equity
Interest, or on account of any return of capital to the Borrower’s stockholders,
partners or members (or the equivalent Persons thereof); provided that payments
made to Affiliates pursuant to transactions permitted by Section 6.06(a) shall
not constitute Restricted Payments. “S&P” means Standard & Poor’s Ratings
Services, a Standard & Poor’s Financial Services LLC business. “Sale and
Leaseback Transaction” means any sale or other transfer of any property or asset
by any Person with the intent to lease such property or asset as lessee.
“Sanctioned Country” means, at any time, a country, region or territory which is
itself the subject or target of any Sanctions (at the time of this Agreement,
Crimea, Cuba, Iran, North Korea and Syria). “Sanctioned Person” means, at any
time, (a) any Person listed in any Sanctions-related list of designated Persons
maintained by OFAC, the U.S. Department of State, the United Nations Security
Council, the European Union, any European Union member state, Her Majesty’s
Treasury of the United Kingdom, Global Affairs Canada or other relevant
sanctions authority, (b) any Person operating, organized or resident in a
Sanctioned Country or (c) any Person owned or controlled by any such Person or
Persons described in the foregoing clauses (a) or (b). “Sanctions” means all
economic or financial sanctions or trade embargoes imposed, administered or
enforced from time to time by (a) the U.S. government, including those
administered by OFAC or the U.S. Department of State or (b) the United Nations
Security Council, the European Union, any European Union member state, Her
Majesty’s Treasury of the United Kingdom, Global Affairs Canada or other
relevant sanctions authority. “SEC” means the United States Securities and
Exchange Commission. “Secured Obligations” has the meaning assigned thereto in
the Collateral Agency Agreement. “Secured Parties” means, collectively, the
Agents, the Lenders, the Interest Rate Hedge Banks and each co-agent or
sub-agent appointed by the Administrative Agent from time to time pursuant to
this Agreement. “Security Agreement” means the Amended and Restated Borrower
Security Agreement, dated as of February 6, 2009 and as amended and restated as
of March 31, 2010 and as further amended as of February 10, 2012, between the
Borrower and the Collateral Agent (as amended, restated, supplemented or
otherwise modified from time to time), a copy of which is attached hereto as
Exhibit L. “Security Documents” means, collectively, the Security Agreement, the
Pledge Agreement and any other security agreements, pledge agreements or other
similar agreements delivered to the Agents, the Lenders and the Interest Rate
Hedge Banks, and any other agreements, instruments or 20

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documents that create or purport to create a Lien in favor of the Collateral
Agent for the benefit of the Secured Parties. “Senior Debt Rating” means at any
date, the credit rating identified by S&P, Moody’s or Fitch as the credit rating
which (a) it has assigned to long term secured senior debt of the Borrower or
(b) it would assign to long term secured senior debt of the Borrower were the
Borrower to issue or have outstanding any long term secured senior debt on such
date. “Solvent” means, in reference to the Borrower, (a) the fair value of the
assets of the Borrower, at a fair valuation, will exceed its debts and
liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of the Borrower will be greater than the amount
that will be required to pay the probable liability of its debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) the Borrower will be able to pay
its debts and liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured; and (d) the Borrower will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted after
the Effective Date. “Statutory Reserve Rate” means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D of the Board. Eurodollar
Loans shall be deemed to constitute eurocurrency funding and to be subject to
such reserve requirements without benefit of or credit for proration, exemptions
or offsets that may be available from time to time to any Lender under such
Regulation D of the Board or any comparable regulation. The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage. “Subordinated Indebtedness” means any
Indebtedness of the Borrower or any Subsidiary the payment of which is
subordinated to payment of the obligations under the Financing Documents.
“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, Controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent. “Subsidiary” means any
subsidiary of the Borrower. “Swap Agreement” means any agreement with respect to
any swap, forward, future or derivative transaction or option or similar
agreement involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.
“Syndication Agent” means CoBank, ACB, in its capacity as syndication agent for
the term loan facility evidenced by this Agreement. 21

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“Tax-Free Debt” means Indebtedness of PSE to a state, territory or possession of
the United States or any political subdivision thereof issued in a transaction
in which such state, territory, possession or political subdivision issued
obligations the interest on which is excludable from gross income pursuant to
the provisions of Section 103 of the Code (or similar provisions), as in effect
at the time of issuance of such obligations, and debt to a bank issuing a letter
of credit with respect to the principal of or interest on such obligations.
“Taxes” or “Tax” means any present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto. “Term Loan” has the meaning assigned to such term in Section
2.01(a). “Total Capitalization” means, at any time, the sum, without
duplication, of (a) Total Shareholders’ Equity at such time and (b) Total Funded
Indebtedness at such time. “Total Funded Indebtedness” means, for the Borrower
and its Subsidiaries, without duplication, on a consolidated basis, the sum of
(a) all Indebtedness of such Person for borrowed money, except to the extent
such Indebtedness is “non-recourse” to such Person or recourse for payment of
such Indebtedness is limited to specific assets of such Person (whether or not
included on a consolidated balance sheet of such Person), (b) the principal
portion of all obligations of such Person under Capital Lease Obligations, (c)
all unreimbursed obligations relative to the face amount of all letters of
credit issued to support Indebtedness of the kinds referred to in clauses (a)
and (b) above, (d) all Guarantees of such Person with respect to Indebtedness
and obligations of the type described in clauses (a) through (c) hereof of
another Person; provided that such Guarantees are required to be reported as
liabilities on a balance sheet of such Person prepared in accordance with GAAP
(and without duplication of any liability already appearing as a liability on
such balance sheet); and provided, further that, in the event a Guarantee is
limited as to dollar amount, such Guarantee shall not exceed such limitation and
(e) all Indebtedness and obligations of the type described in clauses (a), (b),
and (c) hereof of another Person, secured by a Lien on any property of such
Person whether or not such Indebtedness or obligations has been assumed by such
Person. Notwithstanding the foregoing, Total Funded Indebtedness (i) shall not
include (x) trust preferred securities, if any, (y) interest on Indebtedness
that is accrued in the ordinary course of business and (z) any intercompany
Indebtedness between the Borrower and any of its Subsidiaries or among any of
its Subsidiaries and (ii) shall include intercompany Indebtedness (or Equity
Interests having the characteristics of Indebtedness) owing to any direct or
indirect parent of the Borrower. “Total Shareholders’ Equity” means, at any
time, the amount of total common shareholders’ equity of the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP) plus (a) the cumulative non-cash mark-to-market charges
(net of taxes) recognized by the Borrower and its Subsidiaries in all periods;
minus (b) the cumulative non-cash mark-to-market gains (net of taxes) recognized
by the Borrower and its Subsidiaries in all periods in each case calculated
exclusive of the effect on the Borrower’s accumulated other comprehensive
income/loss of the ongoing application of Accounting Standards Codification
Topic 815. “Transactions” means the execution, delivery and performance by the
Borrower of this Agreement and the other Financing Documents, the borrowing of
Loans and other credit extensions and the use of the proceeds thereof. “Type”,
when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined
by reference to the Adjusted LIBO Rate or the Alternate Base Rate. “UCC” means
the Uniform Commercial Code as in effect from time to time in the State of New
York or any other state the laws of which are required to be applied in
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“Unliquidated Obligations” means, at any time, any Secured Obligations (or
portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (a) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (b) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (c) an obligation to provide collateral to secure any of the foregoing types
of obligations. “U.S. Person” means a “United States person” within the meaning
of Section 7701(a)(30) of the Code. “U.S. Tax Certificate” has the meaning
assigned to such term in Section 2.17(f)(ii)(D)(2). “Withdrawal Liability” means
liability to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are defined in Part 1 of
Subtitle E of Title IV of ERISA. “Withholding Agent” means the Borrower and the
Administrative Agent. “Write-Down and Conversion Powers” means, with respect to
any EEA Resolution Authority, the write-down and conversion powers of such EEA
Resolution Authority from time to time under the Bail-In Legislation for the
applicable EEA Member Country, which write-down and conversion powers are
described in the EU Bail-In Legislation Schedule. SECTION 1.02. Classification
of Loans and Borrowings. For purposes of this Agreement, Loans may be classified
and referred to by Type (e.g., a “Eurodollar Loan”). Borrowings also may be
classified by Type (e.g., a “Eurodollar Borrowing”). SECTION 1.03. Terms
Generally. The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words “include”, “includes” and “including” shall be deemed to be followed
by the phrase “without limitation”. The word “will” shall be construed to have
the same meaning and effect as the word “shall”. The word “law” shall be
construed as referring to all statutes, rules, regulations, codes and other laws
(including official rulings and interpretations thereunder having the force of
law or with which affected Persons customarily comply), and all judgments,
orders and decrees, of all Governmental Authorities. Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, restated,
supplemented or otherwise modified (subject to any restrictions on such
amendments, restatements, supplements or modifications set forth herein), (b)
any definition of or reference to any statute, rule or regulation shall be
construed as referring thereto as from time to time amended, supplemented or
otherwise modified (including by succession of comparable successor laws), (c)
any reference herein to any Person shall be construed to include such Person’s
successors and assigns (subject to any restrictions on assignment set forth
herein) and, in the case of any Governmental Authority, any other Governmental
Authority that shall have succeeded to any or all functions thereof, (d) the
words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (e) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement, (f) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights, and (g) all actions by specified officers of a
Person shall be deemed to be taken by such specified officer solely in such
specified officer’s capacity as such officer. SECTION 1.04. Accounting Terms;
GAAP; Pro Forma Calculations. (a) Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time; provided that, if the Borrower
notifies the 23

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Administrative Agent that the Borrower requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof in
GAAP or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose) (including, without
limitation, any change in GAAP resulting in any operating lease being
reclassified as a capital lease), regardless of whether any such notice is given
before or after such change in GAAP or in the application thereof, then such
provision shall be interpreted on the basis of GAAP as in effect and applied
immediately before such change shall have become effective until such notice
shall have been withdrawn or such provision amended in accordance herewith.
Notwithstanding any other provision contained herein, all terms of an accounting
or financial nature used herein shall be construed, and all computations of
amounts and ratios referred to herein shall be made (i) except with respect to
the revaluation of Indebtedness or liabilities to the extent reflected on the
Borrower’s audited consolidated balance sheet for the fiscal year ending
December 31, 2016, without giving effect to any election under Accounting
Standards Codification 825- 10-25 (or any other Accounting Standards
Codification or Financial Accounting Standard having a similar result or effect)
to value any Indebtedness or other liabilities of the Borrower or any Subsidiary
at “fair value”, as defined therein and (ii) without giving effect to any
treatment of Indebtedness in respect of convertible debt instruments under
Accounting Standards Codification 470-20 (or any other Accounting Standards
Codification or Financial Accounting Standard having a similar result or effect)
to value any such Indebtedness in a reduced or bifurcated manner as described
therein, and such Indebtedness shall at all times be valued at the full stated
principal amount thereof. (b) All pro forma computations required to be made
hereunder giving effect to any acquisition or disposition, or issuance,
incurrence or assumption of Indebtedness, or other transaction shall in each
case be calculated giving pro forma effect thereto (and, in the case of any pro
forma computation made hereunder to determine whether such acquisition or
disposition, or issuance, incurrence or assumption of Indebtedness, or other
transaction is permitted to be consummated hereunder, to any other such
transaction consummated since the first day of the period covered by any
component of such pro forma computation and on or prior to the date of such
computation) as if such transaction had occurred on the first day of the period
of four consecutive fiscal quarters ending with the most recent fiscal quarter
for which financial statements shall have been delivered pursuant to Section
5.01(a) or 5.01(b) (or, prior to the delivery of any such financial statements,
ending with the last fiscal quarter included in the financial statements
referred to in Section 3.07(a)), and, to the extent applicable, to the
historical earnings and cash flows associated with the assets acquired or
disposed of (but without giving effect to any synergies or cost savings) and any
related incurrence or reduction of Indebtedness, all in accordance with Article
11 of Regulation S-X under the Securities Act. If any Indebtedness bears a
floating rate of interest and is being given pro forma effect, the interest on
such Indebtedness shall be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period (taking into
account any Swap Agreement applicable to such Indebtedness). SECTION 1.05.
Status of Obligations. In the event that the Borrower shall at any time issue or
have outstanding any Subordinated Indebtedness, the Borrower shall take all such
actions as shall be necessary to cause the Secured Obligations to constitute
senior indebtedness (however denominated) in respect of such Subordinated
Indebtedness and to enable the Administrative Agent and the Lenders to have and
exercise any payment blockage or other remedies available or potentially
available to holders of senior indebtedness under the terms of such Subordinated
Indebtedness. Without limiting the foregoing, the Obligations are hereby
designated as “senior indebtedness” and as “designated senior indebtedness” and
words of similar import under and in respect of any indenture or other agreement
or instrument under which such Subordinated Indebtedness is outstanding and are
further given all such other designations as shall be required under the terms
of any such Subordinated Indebtedness in order that the Lenders may have and
exercise any payment blockage or other remedies available or potentially
available to holders of senior indebtedness under the terms of such Subordinated
Indebtedness. 24

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ARTICLE II The Credits SECTION 2.01. Loans. Subject to the terms and conditions
set forth herein, each Lender agrees to make a term loan (a “Term Loan”, each a
“Loan” and collectively the “Loans”) to the Borrower in Dollars in a single
drawing on the Effective Date in an aggregate principal amount of its Commitment
with respect to the Loans. Amounts repaid or prepaid in respect of Loans may not
be reborrowed. The Commitment of each Lender shall immediately and automatically
terminate upon the earlier of (i) at 3:00 p.m., New York City time, on the
Effective Date and (ii) the making of the Loans pursuant to this Section.
SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be made as part of a
Borrowing consisting of Loans of the same Type made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender’s failure to make Loans
as required. (b) Subject to Section 2.14, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith; provided that, except to the extent the Administrative
Agent shall have received an indemnification substantially consistent with the
terms of Section 2.16 not less than three (3) Business Days prior to the
Effective Date, all Borrowings made on the Effective Date must be made as ABR
Borrowings but may be converted into Eurodollar Borrowings in accordance with
Section 2.08. Each Lender at its option may make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan
(and in the case of an Affiliate, the provisions of Sections 2.14, 2.15, 2.16
and 2.17 shall apply to such Affiliate to the same extent as to such Lender);
provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement. (c)
At the commencement of each Interest Period for any Eurodollar Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$100,000 and not less than $5,000,000. At the time that each ABR Borrowing is
made, such Borrowing shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than $1,000,000. Borrowings of more than one
Type may be outstanding at the same time; provided that there shall not at any
time be more than a total of eight (8) Eurodollar Borrowings outstanding. (d)
Notwithstanding any other provision of this Agreement, the Borrower shall not be
entitled to request, or to elect to convert or continue, any Borrowing if the
Interest Period requested with respect thereto would end after the Maturity
Date. SECTION 2.03. Method of Borrowing. To request the initial Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing subject to Section 2.02(b), not later than
1:00 p.m., New York City time, three (3) Business Days before the Effective Date
or (b) in the case of an ABR Borrowing, not later than 1:00 p.m., New York City
time, one (1) Business Day before the Effective Date. Any such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by
electronic transmission to the Administrative Agent of a written Borrowing
Request in the form attached hereto as Exhibit B and signed by the Borrower. Any
such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02: (i) the aggregate amount of the
requested Borrowing; 25

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(ii) the date of such Borrowing, which shall be a Business Day (which date
thereafter shall be the Effective Date); (iii) whether such Borrowing is to be
an ABR Borrowing or a Eurodollar Borrowing; (iv) in the case of a Eurodollar
Borrowing, the initial Interest Period to be applicable thereto, which shall be
a period contemplated by the definition of the term “Interest Period”; and (v)
the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.07. If no
election as to the Type of Borrowing is specified, then the requested Borrowing
shall be an ABR Borrowing. If no Interest Period is specified with respect to
any requested Eurodollar Borrowing, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration. Promptly following receipt
of a Borrowing Request in accordance with this Section, the Administrative Agent
shall advise each Lender of the details thereof and of the amount of such
Lender’s Commitment and Loan to be made as part of the requested Borrowing.
SECTION 2.04. [Reserved]. SECTION 2.05. [Reserved]. SECTION 2.06. [Reserved].
SECTION 2.07. Funding of Borrowings. (a) Each Lender shall make each Loan to be
made by it hereunder on the Effective Date by wire transfer of immediately
available funds by 12:00 noon, New York City time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders in an amount equal to such Lender’s Commitment. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
designated by the Borrower in the applicable Borrowing Request. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed Effective Date that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i) in the case of such Lender, the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of the Borrower, the interest rate applicable
to ABR Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender’s Loan included in such Borrowing.
SECTION 2.08. Interest Elections. (a) Each Borrowing initially shall be of the
Type specified in the initial Borrowing Request and, in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request. Thereafter, the Borrower may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar
Borrowing, may elect Interest Periods therefor, all as provided in this Section.
The Borrower may elect different options with respect to different portions of
the affected Borrowing, in which case each such 26

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portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing. To make an election pursuant to this Section,
the Borrower shall notify the Administrative Agent of such election by telephone
by the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by
electronic transmission to the Administrative Agent of a written Interest
Election Request in the form attached hereto as Exhibit I and signed by the
Borrower. Notwithstanding any contrary provision herein, this Section shall not
be construed to permit the Borrower to (i) elect an Interest Period for
Eurodollar Loans that does not comply with Section 2.02(d) or (ii) convert any
Borrowing to a Borrowing of a Type not available under the Commitments pursuant
to which such Borrowing was made. Each telephonic and written Interest Election
Request shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing); (ii) the effective date of the
election made pursuant to such Interest Election Request, which shall be a
Business Day; (iii) whether the resulting Borrowing is to be an ABR Borrowing or
a Eurodollar Borrowing; and (iv) if the resulting Borrowing is a Eurodollar
Borrowing, the Interest Period to be applicable thereto after giving effect to
such election, which Interest Period shall be a period contemplated by the
definition of the term “Interest Period”. If any such Interest Election Request
requests a Eurodollar Borrowing but does not specify an Interest Period, then
the Borrower shall be deemed to have selected an Interest Period of one month’s
duration. Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing. If the Borrower fails to deliver a
timely Interest Election Request with respect to a Eurodollar Borrowing prior to
the end of the Interest Period applicable thereto, then, unless such Borrowing
is repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing
at the end of the Interest Period applicable thereto. SECTION 2.09. [Reserved].
SECTION 2.10. Repayment of Loans; Evidence of Debt. The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Loan on the Maturity Date.
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Each Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder. The
Administrative Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender hereunder and
(iii) the amount of any sum received by the Administrative Agent hereunder for
the account of the Lenders and each Lender’s share thereof. The entries made in
the accounts maintained pursuant to paragraph (b) or (c) of this Section shall
be prima facie evidence of the existence and amounts of the obligations recorded
therein; provided that the failure of any Lender or the Administrative Agent to
maintain such accounts or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans in accordance with the terms of
this Agreement. Any Lender may request that Loans made by it be evidenced by a
promissory note in substantially the form of Exhibit F. In such event, the
Borrower shall prepare, execute and deliver to such Lender a promissory note
payable to such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Administrative Agent.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 9.04) be
represented by one or more promissory notes in such form payable to the payee
named therein. SECTION 2.11. Prepayment of Loans. The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to prior notice in accordance with the provisions of this Section.
The Borrower shall notify the Administrative Agent by telephone (confirmed by an
electronic transmission in the form of Exhibit N attached hereto) of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing,
not later than 1:00 p.m., New York City time, three (3) Business Days before the
date of prepayment or (ii) in the case of prepayment of an ABR Borrowing, not
later than 1:00 p.m., New York City time, one (1) Business Day before the date
of prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid; provided that a notice of prepayment delivered by the Borrower may
state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Promptly following receipt of any such notice
relating to a Borrowing, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing shall be in an
amount that would be permitted in the case of an advance of a Borrowing of the
same Type as provided in Section 2.02. Each prepayment of a Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be payable without penalty or premium and shall be accompanied by (i)
accrued interest to the extent required by Section 2.13 and (ii) break funding
payments pursuant to Section 2.16. SECTION 2.12. Fees. The Borrower agrees to
pay to the Administrative Agent, for its own account, fees payable in the
amounts and at the times separately agreed upon between the Borrower and the
Administrative Agent. All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent for distribution to
the applicable Lenders. Fees paid shall not be refundable under any
circumstances. 28

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SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing shall bear
interest at the Alternate Base Rate plus the Applicable Rate. The Loans
comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable
Rate. Notwithstanding the foregoing, if any principal of or interest on any Loan
or any fee or other amount payable by the Borrower hereunder is not paid when
due, whether at stated maturity, upon acceleration or otherwise, such overdue
amount shall bear interest, after as well as before judgment, at a rate per
annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section. Accrued
interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan; provided that (i) interest accrued pursuant to paragraph (c) of
this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan, accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion. All interest hereunder shall be
computed on the basis of a year of 360 days, except that interest computed by
reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or
366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). The
applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error. SECTION 2.14. Alternate Rate of Interest. (a)
If prior to the commencement of any Interest Period for a Eurodollar Borrowing:
(i) the Administrative Agent determines (which determination shall be conclusive
and binding absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable
(including, without limitation, because the LIBO Screen Rate is not available or
published on a current basis), for such Interest Period; or (ii) the
Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
Rate or the LIBO Rate, as applicable, for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (or Lender) of making or
maintaining their Loans (or its Loan) included in such Borrowing for such
Interest Period; then the Administrative Agent shall give notice thereof to the
Borrower and the Lenders by telephone or telecopy or electronic transmission as
promptly as practicable thereafter and, until the Administrative Agent notifies
the Borrower and the Lenders that the circumstances giving rise to such notice
no longer exist (and the Administrative Agent shall use commercially reasonable
efforts to provide such notice promptly following such circumstances no longer
existing as determined by the Administrative Agent in its sole discretion (or,
in the case of clause (ii) above, promptly following the Administrative Agent
being advised thereof by the Required Lenders)), (i) any Interest Election
Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective and any such
Eurodollar Borrowing shall be repaid on the last day of the then current
Interest Period applicable thereto and (ii) if any Borrowing Request requests a
Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing. 29

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(b) If at any time the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that (i) the circumstances set forth
in clause (a)(i) have arisen and such circumstances are unlikely to be temporary
or (ii) the circumstances set forth in clause (a)(i) have not arisen but the
supervisor for the administrator of the LIBO Screen Rate or a Governmental
Authority having jurisdiction over the Administrative Agent has made a public
statement identifying a specific date after which the LIBO Screen Rate shall no
longer be used for determining interest rates for loans, then the Administrative
Agent and the Borrower shall endeavor to establish an alternate rate of interest
to the LIBO Rate that gives due consideration to the then prevailing market
convention for determining a rate of interest for syndicated loans in the United
States at such time, and shall enter into an amendment to this Agreement to
reflect such alternate rate of interest and such other related changes to this
Agreement as may be applicable. Notwithstanding anything to the contrary in
Section 9.02, such amendment shall become effective without any further action
or consent of any other party to this Agreement so long as the Administrative
Agent shall not have received, within five Business Days of the date notice of
such alternate rate of interest is provided to the Lenders, a written notice
from the Required Lenders stating that such Required Lenders object to such
amendment. Until an alternate rate of interest shall be determined in accordance
with this clause (b) (but, in the case of the circumstances described in clause
(ii) of the first sentence of this Section 2.14(b), only to the extent the LIBO
Screen Rate for such Interest Period is not available or published at such time
on a current basis), (x) any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective, and (y) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing; provided that, if such alternate rate of interest shall be less than
zero, such rate shall be deemed to be zero for the purposes of this Agreement.
SECTION 2.15. Increased Costs; Illegality. (a) If any Change in Law shall: (i)
impose, modify or deem applicable any reserve, special deposit, liquidity or
similar requirement (including any compulsory loan, requirement, insurance
charge or other assessment) against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate); (ii) impose on any Lender or the London
interbank market any other condition, cost or expense (other than Taxes)
affecting this Agreement or Eurodollar Loans made by such Lender; or (iii)
subject any Recipient to any Taxes on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (e) of the definition of Excluded
Taxes and (C) Connection Income Taxes); and the result of any of the foregoing
shall be to increase the cost to such Lender or such other Recipient of making,
continuing, converting into or maintaining any Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or such
other Recipient to reduce the amount of any sum received or receivable by such
Lender or such other Recipient hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender or such other Recipient,
as the case may be, such additional amount or amounts as will compensate such
Lender or such other Recipient, as the case may be, for such additional costs
incurred or reduction suffered. If any Lender determines that any Change in Law
regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on such Lender’s capital or on the capital of such
Lender’s holding company, if any, as a consequence of this Agreement or the
Loans made by such Lender to a level below that which such Lender or such
Lender’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s policies and the policies of such Lender’s
holding company with respect to capital adequacy and liquidity), then from time
to time 30

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the Borrower will pay to such Lender, such additional amount or amounts as will
compensate such Lender or such Lender’s holding company for any such reduction
suffered. A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender, as the case may be, the amount shown as due on any such certificate
within ten (10) days after receipt thereof. Failure or delay on the part of any
Lender to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender’s right to demand such compensation; provided that the
Borrower shall not be required to compensate a Lender pursuant to this Section
for any increased costs or reductions incurred more than 270 days prior to the
date that such Lender, as the case may be, notifies the Borrower of the Change
in Law giving rise to such increased costs or reductions and of such Lender’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its lending office to make, maintain or fund Loans whose
interest is determined by reference to the LIBO Rate, or to determine or charge
interest rates based upon the LIBO Rate, or any Governmental Authority has
imposed material restrictions on the authority of such Lender to purchase or
sell, or to take deposits of, Dollars in the London interbank market, then, on
notice thereof by such Lender to the Borrower through the Administrative Agent,
(i) any obligation of such Lender to make or continue Eurodollar Loans or to
convert ABR Loans to Eurodollar Loans shall be suspended, and (ii) if such
notice asserts the illegality of such Lender making or maintaining ABR Loans the
interest rate on which is determined by reference to the LIBO Rate component of
the Alternate Base Rate, the interest rate on which ABR Loans of such Lender
shall, if necessary to avoid such illegality, be determined by the
Administrative Agent without reference to the LIBO Rate component of the
Alternate Base Rate, in each case until such Lender notifies the Administrative
Agent and the Borrower that the circumstances giving rise to such determination
no longer exist. Upon receipt of such notice, (x) the Borrower shall, upon
demand from such Lender (with a copy to the Administrative Agent), prepay or, if
applicable, convert all Eurodollar Loans of such Lender to ABR Loans (the
interest rate on which ABR Loans of such Lender shall, if necessary to avoid
such illegality, be determined by the Administrative Agent without reference to
the LIBO Rate component of the Alternate Base Rate), either on the last day of
the Interest Period therefor, if such Lender may lawfully continue to maintain
such Eurodollar Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurodollar Loans and (y) if such notice
asserts the illegality of such Lender determining or charging interest rates
based upon the LIBO Rate, the Administrative Agent shall during the period of
such suspension compute the Alternate Base Rate applicable to such Lender
without reference to the LIBO Rate component thereof until the Administrative
Agent is advised in writing by such Lender that it is no longer illegal for such
Lender to determine or charge interest rates based upon the LIBO Rate (and such
Lender shall use commercially reasonable efforts to provide such notice promptly
following such circumstances no longer existing as determined by such Lender in
its sole discretion). Upon any such prepayment or conversion, the Borrower shall
also pay accrued interest on the amount so prepaid or converted. SECTION 2.16.
Break Funding Payments. In the event of (a) the payment of any principal of any
Eurodollar Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default or as a result of any
prepayment pursuant to Section 2.11), (b) the conversion of any Eurodollar Loan
other than on the last day of the Interest Period applicable 31

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thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar
Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice may be revoked under Section 2.11 and is revoked in
accordance therewith) or (d) the assignment of any Eurodollar Loan other than on
the last day of the Interest Period applicable thereto as a result of a request
by the Borrower pursuant to Section 2.19, then, in any such event, the Borrower
shall compensate each Lender for the loss, cost and expense attributable to such
event. Such loss, cost or expense to any Lender shall be deemed to include an
amount determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for deposits in Dollars
of a comparable amount and period from other banks in the eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within ten (10) days
after receipt thereof. SECTION 2.17. Taxes. (a) Withholding of Taxes; Gross-Up.
Each payment by the Borrower under any Financing Document shall be made without
withholding for any Taxes, unless such withholding is required by any law. If
any Withholding Agent determines, in its sole discretion exercised in good
faith, that it is so required to withhold Taxes, then such Withholding Agent may
so withhold and shall timely pay the full amount of withheld Taxes to the
relevant Governmental Authority in accordance with applicable law. If such Taxes
are Indemnified Taxes, then the amount payable by the Borrower shall be
increased as necessary so that, net of such withholding (including such
withholding applicable to additional amounts payable under this Section), the
applicable Recipient receives the amount it would have received had no such
withholding been made. Payment of Other Taxes by the Borrower. The Borrower
shall timely pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable law. Evidence of Payments. As soon as practicable
after any payment of Indemnified Taxes by the Borrower to a Governmental
Authority, the Borrower shall deliver to the Administrative Agent the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.
Indemnification by the Borrower. The Borrower shall indemnify each Recipient for
any Indemnified Taxes that are paid or payable by such Recipient in connection
with any Financing Document (including amounts paid or payable under this
Section 2.17(d)) and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. The indemnity under this
Section 2.17(d) shall be paid within ten (10) days after the Recipient delivers
to the Borrower a certificate stating the amount of any Indemnified Taxes so
paid or payable by such Recipient and describing the basis of the indemnity
claim. Such certificate shall be conclusive of the amount so payable absent
manifest error. Such Recipient shall deliver a copy of such certificate to the
Administrative Agent. Indemnification by the Lenders. Each Lender shall
severally indemnify the Administrative Agent for any Taxes (but, in the case of
any Indemnified Taxes, only to the extent that the Borrower has not already
indemnified the Administrative Agent for such Indemnified Taxes and without
limiting the obligation of the Borrower to do so) attributable to such Lender
that are paid or payable by 32

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the Administrative Agent or the Borrower (as applicable) in connection with any
Financing Document and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. The indemnity under this Section 2.17(e)
shall be paid within ten (10) days after the Administrative Agent delivers to
the applicable Lender a certificate stating the amount of Taxes so paid or
payable by the Administrative Agent. Such certificate shall be conclusive of the
amount so paid or payable absent manifest error. Status of Lenders. (i) Any
Lender that is entitled to an exemption from, or reduction of, any applicable
withholding Tax with respect to any payments under any Financing Document shall
deliver to the Borrower and the Administrative Agent, at the time or times
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation prescribed by law or reasonably requested
by the Borrower or the Administrative Agent as will permit such payments to be
made without, or at a reduced rate of, withholding. In addition, any Lender, if
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by law or reasonably requested by the Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to
determine whether or not such Lender is subject to any withholding (including
backup withholding) or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 2.17(f)(ii) (A) through (E) below) shall not be required if
in the Lender’s judgment such completion, execution or submission would subject
such Lender to any material unreimbursed cost or expense or would materially
prejudice the legal or commercial position of such Lender. Upon the reasonable
request of the Borrower or the Administrative Agent, any Lender shall update any
form or certification previously delivered pursuant to this Section 2.17(f). If
any form or certification previously delivered pursuant to this Section expires
or becomes obsolete or inaccurate in any respect with respect to a Lender, such
Lender shall promptly (and in any event within ten (10) days after such
expiration, obsolescence or inaccuracy) notify the Borrower and the
Administrative Agent in writing of such expiration, obsolescence or inaccuracy
and update the form or certification if it is legally eligible to do so. (ii)
Without limiting the generality of the foregoing, if the Borrower is a U.S.
Person, any Lender with respect to the Borrower shall, if it is legally eligible
to do so, deliver to the Borrower and the Administrative Agent (in such number
of copies reasonably requested by the Borrower and the Administrative Agent) on
or prior to the date on which such Lender becomes a party hereto, duly completed
and executed copies of whichever of the following is applicable: (A) in the case
of a Lender that is a U.S. Person, IRS Form W-9 certifying that such Lender is
exempt from U.S. federal backup withholding tax; (B) in the case of a Non-U.S.
Lender claiming the benefits of an income tax treaty to which the United States
is a party (1) with respect to payments of interest under any Financing
Document, IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption
from, or reduction of, U.S. federal withholding Tax pursuant to the “interest”
article of such tax treaty and (2) with respect to any other applicable payments
under any Financing Document, IRS Form W-8BEN or W-8BEN-E, as applicable,
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;
(C) in the case of a Non-U.S. Lender for whom payments under any Financing
Document constitute income that is effectively connected with such Lender’s
conduct of a trade or business in the United States, IRS Form W-8ECI; (D) in the
case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio
interest under Section 881(c) of the Code both (1) IRS Form W-8BEN or W- 33

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8BEN-E, as applicable, and (2) a certificate substantially in the form of
Exhibit G (a “U.S. Tax Certificate”) to the effect that such Lender is not (a) a
“bank” within the meaning of Section 881(c)(3)(A) of the Code, (b) a “10 percent
shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the
Code, (c) a “controlled foreign corporation” described in Section 881(c)(3)(C)
of the Code and (d) conducting a trade or business in the United States with
which the relevant interest payments are effectively connected; (E) in the case
of a Non-U.S. Lender that is not the beneficial owner of payments made under
this Agreement (including a partnership or a participating Lender) (1) an IRS
Form W-8IMY on behalf of itself and (2) the relevant forms prescribed in clauses
(A), (B), (C), (D) and (F) of this paragraph (f)(ii) that would be required of
each such beneficial owner or partner of such partnership if such beneficial
owner or partner were a Lender; provided, however, that if the Lender is a
partnership and one or more of its partners are claiming the exemption for
portfolio interest under Section 881(c) of the Code, such Lender may provide a
U.S. Tax Certificate on behalf of such partners; or (F) any other form
prescribed by law as a basis for claiming exemption from, or a reduction of,
U.S. federal withholding Tax together with such supplementary documentation
necessary to enable the Borrower or the Administrative Agent to determine the
amount of Tax (if any) required by law to be withheld. (iii) If a payment made
to a Lender under any Financing Document would be subject to U.S. federal
withholding Tax imposed by FATCA if such Lender were to fail to comply with the
applicable reporting requirements of FATCA (including those contained in Section
1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the
Withholding Agent, at the time or times prescribed by law and at such time or
times reasonably requested by the Withholding Agent, such documentation
prescribed by applicable law (including as prescribed by Section
1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably
requested by the Withholding Agent as may be necessary for the Withholding Agent
to comply with its obligations under FATCA, to determine whether such Lender is
in compliance with such Lender’s obligations under FATCA and, as necessary, to
determine the amount to deduct and withhold from such payment. Solely for
purposes of this Section 2.17(f)(iii), “FATCA” shall include any amendments made
to FATCA after the date of this Agreement. Treatment of Certain Refunds. If any
party determines, in its sole discretion exercised in good faith, that it has
received a refund of any Taxes as to which it has been indemnified pursuant to
this Section 2.17 (including additional amounts paid pursuant to this Section
2.17), it shall pay to the indemnifying party an amount equal to such refund
(but only to the extent of indemnity payments made under this Section with
respect to the Taxes giving rise to such refund), net of all out-of-pocket
expenses (including any Taxes) of such indemnified party and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund). Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount paid to such
indemnified party pursuant to the previous sentence (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) in the
event such indemnified party is required to repay such refund to such
Governmental Authority. Notwithstanding anything to the contrary in this Section
2.17(g), in no event will any indemnified party be required to pay any amount to
any indemnifying party pursuant to this Section 2.17(g) if such payment would
place such indemnified party in a less favorable position (on a net after-Tax
basis) than such indemnified party would have been in if the indemnification
payments or additional amounts giving rise to such refund had never been paid.
This Section 2.17(g) shall not be construed to require any indemnified party to
make available its Tax returns (or any other information relating to its Taxes
which it deems confidential) to the indemnifying party or any other Person. 34

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SECTION 2.18. Payments Generally; Allocations of Proceeds; Pro Rata Treatment;
Sharing of Set-offs. The Borrower shall make each payment required to be made by
it hereunder (whether of principal, interest or fees, or of amounts payable
under Section 2.15, 2.16 or 2.17, or otherwise) prior to 12:00 noon, New York
City time on the date when due, in immediately available funds, without set-off
or counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at Mizuho
Bank, Ltd. 1800 Plaza Ten, Harborside Financial Center, Jersey City, NJ 07311,
except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be
made directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in Dollars. Subject to the
terms of the Collateral Agency Agreement, any proceeds of Collateral received by
the Administrative Agent (i) not constituting a specific payment of principal,
interest, fees or other sum payable under the Financing Documents (which shall
be applied as specified by the Borrower) or (ii) after an Event of Default has
occurred and is continuing and the Administrative Agent so elects or the
Required Lenders so direct, such funds shall be applied ratably first, to pay
any fees, indemnities, or expense reimbursements including amounts then due to
the Administrative Agent from the Borrower, second, to pay any fees or expense
reimbursements then due to the Lenders from the Borrower, third, to pay interest
then due and payable on the Loans ratably, fourth, to prepay principal on the
Loans and any other amounts owing with respect to Banking Services Obligations
ratably, and fifth, to the payment of any other Secured Obligation due to the
Administrative Agent or any Lender by the Borrower. Notwithstanding anything to
the contrary contained in this Agreement, unless so directed by the Borrower, or
unless a Default is in existence, none of the Administrative Agent or any Lender
shall apply any payment which it receives to any Eurodollar Loan, except on the
expiration date of the Interest Period applicable to any such Eurodollar Loan,
and, in any event, the Borrower shall pay the break funding payment required in
accordance with Section 2.16. The Administrative Agent and the Lenders shall
have the continuing and exclusive right to apply and reverse and reapply any and
all such proceeds and payments to any portion of the Secured Obligations. At the
election of the Administrative Agent, all payments of principal, interest, fees,
premiums, reimbursable expenses (including, without limitation, all
reimbursement for fees and expenses pursuant to Section 9.03), and other sums
payable under the Financing Documents, may be paid from the proceeds of
Borrowings made hereunder whether made following a request by the Borrower
pursuant to Section 2.03 or a deemed request as provided in this Section. The
Borrower hereby irrevocably authorizes the Administrative Agent to make a
Borrowing for the purpose of paying each payment of principal, interest and fees
as it becomes due hereunder or any other amount due under the Financing
Documents and agrees that all such amounts charged shall constitute Loans and
that all such Borrowings shall be deemed to have been requested pursuant to
Section 2.03. If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent 35

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necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation. Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Administrative Agent for the account
of the applicable Lenders hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the applicable Lenders the amount due. In such event,
if the Borrower has not in fact made such payment, then each of the applicable
Lenders, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation. If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.07(b), 2.18(e) or 9.03(c) then the Administrative
Agent may, in its discretion (notwithstanding any contrary provision hereof),
(i) apply any amounts thereafter received by the Administrative Agent for the
account of such Lender and for the benefit of the Administrative Agent to
satisfy such Lender’s obligations to it under such Section until all such
unsatisfied obligations are fully paid and/or (ii) hold any such amounts in a
segregated account over which the Administrative Agent shall have exclusive
control as cash collateral for, and application to, any future funding
obligations of such Lender under any such Section; in the case of each of
clauses (i) and (ii) above, in any order as determined by the Administrative
Agent in its discretion. SECTION 2.19. Mitigation Obligations; Replacement of
Lenders. (a) If any Lender requests compensation under Section 2.15, or the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment. If (i) any Lender requests
compensation under Section 2.15, (ii) the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.17 or (iii) any Lender becomes a Defaulting
Lender, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such 36

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Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in Section 9.04), all its interests, rights and
obligations under the Financing Documents to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.15 or payments required to be made pursuant to Section 2.17, such assignment
will result in a reduction in such compensation or payments. A Lender shall not
be required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply. SECTION 2.20.
Expansion Option. The Borrower may from time to time elect to enter into a
maximum of three additional tranches of term loans (each an “Incremental Term
Loan”), in each case in minimum increments of $10,000,000 so long as, after
giving effect thereto, the aggregate amount of all such Incremental Term Loans
does not exceed $100,000,000. The Borrower may arrange for any tranche to be
provided by one or more Lenders (each Lender so agreeing to participate in such
Incremental Term Loans, an “Increasing Lender”), or by one or more new banks,
financial institutions or other entities (each such new bank, financial
institution or other entity, an “Augmenting Lender”; provided that no Ineligible
Institution may be an Augmenting Lender), to participate in such Incremental
Term Loans; provided that (i) each Increasing Lender and Augmenting Lender shall
be subject to the approval of the Borrower and the Administrative Agent, which,
in the case of the Administrative Agent, shall not be unreasonably withheld and
(ii) (x) in the case of an Increasing Lender, the Borrower and such Increasing
Lender execute an agreement substantially in the form of Exhibit C hereto, and
(y) in the case of an Augmenting Lender, the Borrower and such Augmenting Lender
execute an agreement substantially in the form of Exhibit D hereto. No consent
of any Lender (other than the Lenders participating in any Incremental Term
Loan) shall be required for any Incremental Term Loan pursuant to this Section
2.20. Incremental Term Loans created pursuant to this Section 2.20 shall become
effective on the date agreed by the Borrower, the Administrative Agent and the
relevant Increasing Lenders or Augmenting Lenders, and the Administrative Agent
shall notify each Lender thereof. Notwithstanding the foregoing, no tranche of
Incremental Term Loans shall become effective under this paragraph unless, (i)
on the proposed date of the effectiveness of Incremental Term Loans, (A) the
conditions set forth in paragraphs (a) and (b) of Section 4.02 shall be
satisfied or waived by the Required Lenders and the Administrative Agent shall
have received a certificate to that effect dated such date and executed by a
Financial Officer of the Borrower and (B) the Borrower shall be in compliance
(on a Pro Forma Basis reasonably acceptable to the Administrative Agent) with
the covenant contained in Section 6.09 and (ii) the Administrative Agent shall
have received documents consistent with those delivered on the Effective Date as
to the corporate power and authority of the Borrower to borrow hereunder after
giving effect to Incremental Term Loans. On the effective date of any
Incremental Term Loans being made, each relevant Increasing Lender and
Augmenting Lender shall make available to the Administrative Agent such amounts
in immediately available funds as the Administrative Agent shall determine, for
the benefit of the other Lenders, as being required in order to cause, after
giving effect to the use of such amounts to make payments to such other Lenders,
each Lender’s portion of the outstanding Loans of all the Lenders to equal its
Applicable Percentage of such outstanding Loans. The Incremental Term Loans (a)
shall rank pari passu in right of payment with the Loans, (b) shall not mature
earlier than the Maturity Date (but may have amortization prior to such date)
and (c) shall be treated substantially the same as (and in any event no more
favorably than) the Loans; provided that (i) the terms and conditions applicable
to any tranche of Incremental Term Loans maturing after the Maturity Date may
provide for material additional or different financial or other covenants or
prepayment requirements applicable only during 37

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periods after the Maturity Date and (ii) the Incremental Term Loans may be
priced differently than the Loans. Incremental Term Loans may be made hereunder
pursuant to an amendment or restatement (an “Incremental Term Loan Amendment”)
of this Agreement and, as appropriate, the other Financing Documents, executed
by the Borrower, each Increasing Lender participating in such tranche, each
Augmenting Lender participating in such tranche, if any, and the Administrative
Agent. The Incremental Term Loan Amendment may, without the consent of any other
Lenders, effect such amendments to this Agreement and the other Financing
Documents as may be necessary or appropriate, in the reasonable opinion of the
Administrative Agent, to effect the provisions of this Section 2.20. Nothing
contained in this Section 2.20 shall constitute, or otherwise be deemed to be, a
commitment on the part of any Lender to provide Incremental Term Loans at any
time. In connection with any Incremental Term Loans pursuant to this Section
2.20, any Augmenting Lender becoming a party hereto shall (1) execute such
documents and agreements as the Administrative Agent may reasonably request and
(2) in the case of any Augmenting Lender that is organized under the laws of a
jurisdiction outside of the United States of America, provide to the
Administrative Agent, its name, address, tax identification number and/or such
other information as shall be necessary for the Administrative Agent to comply
with “know your customer” and anti-money laundering rules and regulations,
including without limitation, the Patriot Act and the Beneficial Ownership
Regulation. SECTION 2.21. Defaulting Lenders. Notwithstanding any provision of
this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then
the following provisions shall apply for so long as such Lender is a Defaulting
Lender, the Commitment and Loans of such Defaulting Lender shall not be included
in determining whether the Required Lenders have taken or may take any action
hereunder (including any consent to any amendment, waiver or other modification
pursuant to Section 9.02); provided, that this Section 2.21 shall not apply to
the vote of a Defaulting Lender in the case of an amendment, waiver or other
modification requiring the consent of such Lender or each Lender directly
affected thereby. SECTION 2.22. [Reserved]. SECTION 2.23. MIRE Events.
Notwithstanding anything to the contrary set forth herein, no MIRE Event may be
closed until the date that is (a) if there are no Mortgaged Real Properties in a
“special flood hazard area” in any Flood Insurance Rate Map published by the
Federal Emergency Management Agency (or any successor agency), ten (10) Business
Days or (b) if there are any Mortgaged Real Properties in a “special flood
hazard area”, thirty (30) days, after the Collateral Agent as the Administrative
Agent has delivered to the Lenders the following documents in respect of such
real property: (i) a completed flood hazard determination from a third party
vendor; (ii) if such real property is located in a “special flood hazard area”,
(A) a notification to the Borrower or any of its Subsidiaries of that fact and
(if applicable) notification to the Borrower or any Subsidiary, as applicable,
that flood insurance coverage is not available and (B) evidence of the receipt
by the Borrower or any Subsidiary, as applicable, of such notice; and (iii) if
required by applicable Flood Insurance Laws, evidence of required flood
insurance with respect to which flood insurance has been made available under
applicable Flood Insurance Laws; provided that any such MIRE Event may be closed
prior to such period expiring if the Administrative Agent and the Collateral
Agent shall have received confirmation from each Lender that such Lender has
completed any necessary flood insurance due diligence to its reasonable
satisfaction. ARTICLE III Representations and Warranties The Borrower hereby
represents and warrants to the Lenders that. 38

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SECTION 3.01. Existence, Qualification and Power; Compliance with Laws. The
Borrower, and each of the Operating Companies and, in the case of clause (e)
only, each of the other Subsidiaries, of the Borrower, (a) is a Person duly
organized or formed, validly existing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority to (i)
own or lease its material assets and carry on its business and (ii) in the case
of the Borrower, execute, deliver and perform its obligations under the
Financing Documents to which it is a party, (c) is duly organized and validly
existing under the Laws of the jurisdiction of its incorporation or organization
and of each other jurisdiction where its ownership, lease or operation of
material Properties or the conduct of its business as now conducted requires
such qualification, (d) is in compliance in all material respects with all Laws,
orders, writs, injunctions and orders and (e) has all requisite Regulatory
Approvals to own its material Properties and operate its business as currently
conducted, in the case of the foregoing clauses (c) through (e), except for such
matters that could not reasonably be expected to result in a Material Adverse
Effect. SECTION 3.02. Binding Effect. This Agreement and each other Financing
Document has been duly executed and delivered by the Borrower. This Agreement
and each other Financing Document constitute the legal, valid and binding
obligation of Borrower enforceable against the Borrower in accordance with its
terms, except as such enforceability may be limited by Debtor Relief Laws and by
general principles of equity. SECTION 3.03. Authorization; No Contravention. The
execution, delivery and performance by the Borrower of this Agreement and each
other Financing Document are within the Borrower’s corporate or other powers,
have been duly authorized by all necessary corporate or other organizational
action, and do not and will not (a) contravene the terms of any of the
Borrower’s Organizational Documents, (b) conflict with or result in any breach
or contravention of, or the creation of any Lien under (other than as permitted
by Section 6.01), or require any payment to be made under (i) any Contractual
Obligation to which the Borrower or any of its Subsidiaries is a party or
affecting the Borrower or any of its Subsidiaries or the properties of the
Borrower or any of its Subsidiaries or (ii) any material order, injunction, writ
or decree of any Governmental Authority or any arbitral award to which the
Borrower or any of its Subsidiaries or any of their property is subject or (c)
violate any applicable Law, in the case of the foregoing clauses (b) and (c),
except for such matters that could not reasonably be expected to result in a
Material Adverse Effect. SECTION 3.04. Governmental Authorization; Other
Consents. Other than as specified in Schedule 3.04, there is no Regulatory
Approval and there is no approval, consent, exemption, authorization, or other
action by, or notice to, or filing with any other Person that is necessary or
required in connection with (a) the execution, delivery or performance by, or
enforcement against, the Borrower of this Agreement or any other Financing
Document to which it is a party and the consummation of the transactions
contemplated hereby and thereby or (b) the ability of the Operating Companies to
operate their businesses as currently operated, except for the Regulatory
Approvals and the other approvals, consents, exemptions, authorizations,
actions, notices and filings which have been duly obtained, taken, given or made
and are in full force and effect. SECTION 3.05. Taxes. The income tax of the
Borrower and its Subsidiaries is included in a consolidated tax return for U.S.
federal income tax purposes, of which Puget Holdings is the “common parent”
(within the meaning of Section 1504 of the Code) of such group. Each Borrower
Group Member has filed all tax returns and reports required to be filed, and has
paid all income taxes and other material taxes, assessments, fees and other
governmental charges levied or imposed upon it or its properties, income or
assets otherwise due and payable, except in each case those (a) which are not
yet due and payable, or (b) which are being contested in good faith by
appropriate 39

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proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP. SECTION 3.06. No Default. Neither the Borrower
nor any Subsidiary is in default under or with respect to, any material
Contractual Obligation, except for any such default which could not reasonably
be expected to result in a Material Adverse Effect. No Default has occurred and
is continuing. SECTION 3.07. Financial Statements; No Material Adverse Effect.
(a) The financial statements furnished pursuant to Section 4.01(c) fairly
present in all material respects the financial condition of the Borrower and its
Subsidiaries as of the dates thereof and their results of operations for the
period covered thereby in accordance with GAAP, consistently applied throughout
the periods covered thereby. As of the date of such financial statements, (i)
there has been no sale, transfer or other disposition by the Borrower or any of
its Subsidiaries of any material part of the business or Property of the
Borrower and its Subsidiaries, taken as a whole, (ii) there has been no purchase
or other acquisition by the Borrower or any of its Subsidiaries of any business
or Property (including any Equity Interests of any other Person) material in
relation to the consolidated financial condition of the Borrower and its
consolidated Subsidiaries (taken as a whole) and (iii) the Borrower and the
Operating Companies did not have any material contingent liabilities, material
liabilities for Taxes, material and unusual forward or long-term commitments or
material and unrealized or anticipated losses from any unfavorable commitments,
except as referred to or reflected or provided for in such financial statements
or as arising solely from the execution and delivery of the Financing Documents,
in each case, which is not reflected in the foregoing financial statements or in
the notes thereto or has not otherwise been disclosed in writing to the Lenders
prior to the Effective Date. The forecasts (if any) of consolidated balance
sheets, income statements and cash flow statements of the Borrower and its
Subsidiaries for each fiscal year ending after the Effective Date until the
Maturity Date, copies of which have been furnished to the Administrative Agent
prior to the Effective Date in a form reasonably satisfactory to it, have been
prepared in good faith on the basis of the assumptions stated therein, which
assumptions were believed to be reasonable at the time of preparation of such
forecasts and no representation or warranty is made as to the actual
attainability of any such forecasts. Since December 31, 2018, there has been no
event or circumstance, either individually or in the aggregate, that has
resulted in or could reasonably be expected to result in, on or after the
Effective Date, a Material Adverse Effect. SECTION 3.08. Ranking. The Financing
Documents and the Secured Obligations evidenced thereby rank and will at all
times rank at least pari passu with all other senior, secured Indebtedness of
the Borrower, whether now existing or hereafter outstanding, except other
senior, secured Indebtedness to the extent secured by Liens permitted by Section
6.01 (other than Liens created by any of the Security Documents). SECTION 3.09.
Ownership of Assets. (a) (i) Each Borrower Group Member owns and (to the extent
applicable) has good and defensible title to its material Properties and assets,
in each case free and clear of all Liens other than Liens permitted pursuant to
Section 6.01 and (ii) each Borrower Group Member has good and defensible title
in fee simple to, or valid leasehold or license interests in, or easements or
other limited property interests in, all material real property necessary in the
ordinary conduct of its business, free and clear of all Liens except for Liens
permitted pursuant to Section 6.01, and, in each case, subject to such
exceptions, defects and qualifications as do not (x) affect the value of any
such properties of such Borrower Group Member in any material respect or (y)
affect the use made or 40

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proposed to be made of such properties by the Borrower or any such Operating
Company in any material respect. Other than the security interests, if any,
granted to the Collateral Agent for the ratable benefit of the Secured Parties
pursuant to the Security Documents, no Borrower Group Member has pledged,
assigned, sold, granted a Lien on or security interest in, or otherwise conveyed
any of its Properties, assets or revenues, other than Liens permitted pursuant
to Section 6.01 or Dispositions not precluded by this Agreement. SECTION 3.10.
No Other Business. The Borrower has not engaged in any business and has not
incurred any liabilities other than (a) directly relating to its direct
ownership of PSE and its direct or indirect ownership of the other Operating
Companies and Immaterial Subsidiaries and (b) as otherwise not prohibited under
the Financing Documents. SECTION 3.11. Insurance. All insurance required to be
obtained by the Borrower Group Members pursuant to Section 5.08 has been
obtained and is in full force and effect, and all premiums then due and payable
on all such insurance have been paid. SECTION 3.12. Disclosure. No report,
financial statement, certificate or other written information (including the
Information Memorandum) furnished by or on behalf of the Borrower or any of its
Subsidiaries to the Administrative Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or any other Financing Documents (as modified or
supplemented by other information so furnished) at the time so furnished when
taken as a whole contains any material misstatement of fact or omits to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not materially misleading, except as
could not reasonably be expected to result in a Material Adverse Effect;
provided that with respect to any projected financial information, forecasts,
estimates or forward-looking information, the Borrower represents only that such
information and materials have been prepared in good faith on the basis of the
assumptions stated therein, which assumptions were believed to be reasonable at
the time of preparation of such forecasts, and no representation or warranty is
made as to the actual attainability of any such forecasts. As of the Effective
Date, to the best knowledge of the Borrower, the information included in the
Beneficial Ownership Certification provided on or prior to the Effective Date to
any Lender in connection with this Agreement is true and correct in all
respects. SECTION 3.13. Subsidiaries; Equity Interests. (a) As of the Effective
Date, the Borrower has no other Subsidiaries other than those listed in Schedule
3.13(a). All of the outstanding Equity Interests in such Subsidiaries have been
validly issued, are fully paid and non-assessable and all Equity Interests owned
by the Borrower are owned free and clear of all Liens except those, if any,
created under the Security Documents and Liens permitted by Section 6.01. As of
the Effective Date, Schedule 3.13(b) (a) sets forth the name and jurisdiction of
each such Subsidiary and (b) sets forth the ownership interest of the Borrower
and any other Subsidiary in each such Subsidiary, including the percentage of
such ownership; provided that the Borrower hereby represents that it owns,
directly, 100% of the Equity Interests of PSE. SECTION 3.14. No Dividend
Restrictions. Except as set forth in Schedule 3.14 or as permitted by this
Agreement, there are no contractual or regulatory restrictions limiting the
ability of any 41

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Operating Company from making distributions, dividends or other return on
capital to the Borrower in an amount sufficient to satisfy the Obligations under
the Financing Documents. SECTION 3.15. Litigation. There are no actions, suits,
proceedings, disputes or known claims pending or, to the knowledge of the
Borrower, threatened in writing or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, by or against the Borrower or
any of its Subsidiaries or against any of their properties or revenues, except
as set forth in Schedule 3.15, or which individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect. SECTION 3.16.
Solvency. Prior to and after giving effect to the transactions contemplated by
the Financing Documents, the Borrower, on a consolidated basis with its
Subsidiaries, is Solvent. SECTION 3.17. Margin Regulations; Investment Company
Act; USA PATRIOT Act. The Borrower is not engaged nor will it engage,
principally or as one of its important activities, in the business of purchasing
or carrying margin stock (within the meaning of Regulation T, U and X issued by
the FRB), or extending credit for the purpose of purchasing or carrying margin
stock. No Borrower Group Member is or, after giving effect to the transactions
contemplated hereby, will be an “investment company” as defined in and subject
to regulation under the Investment Company Act of 1940. The making of the Loans
and the use of the proceeds thereof shall not violate the Trading With the Enemy
Act, as amended, or any of the foreign assets control regulations of the U.S.
Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any
enabling legislation or executive order relating thereto and each Borrower Group
Member is in compliance with the U.S. Executive Order 13224 of September 24,
2001 Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit or Support Terrorism (66 Fed. Reg. 49, 079 (2001)) (the
“Anti-Terrorism Order”) and the provisions of the Patriot Act. On and after the
Effective Date, the Borrower is a “holding company” within the meaning of
Section 1262(8) of the Public Utility Holding Company Act of 2005 (“PUHCA”) by
reason of its direct or indirect ownership of one or more “public-utility
companies” within the meaning of Section 1262(14) of PUHCA. The Borrower has
filed with the federal Energy Regulatory Commission a notification of its
“holding company” status pursuant to 18 C.F.R. § 366.4(a) (2005). On and after
the Effective Date, the Borrower and certain of its subsidiaries qualifies for
waiver, pursuant to 18 C.F.R. § 366.3(c), of the PUHCA accounting,
record-retention, and filing requirements at 18 C.F.R. §§ 366.21, 366.22, and
366.23, or are otherwise exempt from such requirements pursuant to 18 C.F.R. §
366.3(a). SECTION 3.18. ERISA Compliance. (a) Except as could not, either
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect, each Plan is in compliance with the applicable provisions of
ERISA, the Code and other federal or state Laws. (i) No ERISA Event has occurred
during the five-year period prior to the date on which this representation is
made or deemed made with respect to any Plan or Multiemployer Plan; (ii) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Section 4201
of ERISA with respect to a Multiemployer Plan; and (iii) neither the Borrower
nor any ERISA Affiliate has engaged in a transaction that could reasonably be
subject to Sections 4069 or 4212(c) of ERISA, except, with respect to each of
the foregoing clauses (i) through (iii) 42

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of this Section 3.18(b), as could not reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect. SECTION 3.19.
Environmental Compliance. Except as expressly set forth in the Annual Report:
(a) Except as specified in Schedule 3.19, there are no claims, actions, suits,
or proceedings in respect of or affecting the Borrower or any of its
Subsidiaries (or any of their respective Properties) alleging potential
liability or responsibility for violation of, or otherwise relating to, any
Environmental Law that could, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. Except as specified in Schedule
3.19, the properties owned, leased or operated by the Operating Companies do not
contain any Hazardous Materials in amounts or concentrations which (i)
constitute, or constituted a violation of, (ii) require remedial action under,
or (iii) could give rise to liability under, Environmental Laws, which
violations, remedial actions and liabilities, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. Except as
specified in Schedule 3.19, none of the Operating Companies is undertaking, and
has not completed, either individually or together with other potentially
responsible parties, any investigation or assessment or remedial or response
action relating to any actual or threatened release, discharge or disposal of
Hazardous Materials at any site, location or operation, either voluntarily or
pursuant to the order of any Governmental Authority or the requirements of any
Environmental Law except for such investigation or assessment or remedial or
response action that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. Except as specified in Schedule
3.19, all Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned or operated by
any of the Operating Companies have been disposed of in a manner not reasonably
expected to result, individually or in the aggregate, in a Material Adverse
Effect. Except as set forth in Schedule 3.19, and except as could not reasonably
be expected to result, individually or in the aggregate, in a Material Adverse
Effect, none of the Operating Companies has contractually assumed, with a
Governmental Authority or otherwise, any liability or obligation under or
relating to any Environmental Law. SECTION 3.20. Labor Disputes. No labor
dispute with the Borrower or any of its Subsidiaries exists or is imminent that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. SECTION 3.21. Affiliate Transactions. Except as
specified on Schedule 3.21 or permitted by Section 6.06, no Borrower Group
Member has, directly or indirectly, entered into any transaction since June 30,
2019 or that is in effect on June 30, 2019 and that is otherwise permitted
hereunder with or for the benefit of any Affiliate. SECTION 3.22. Collateral.
All filings and other actions necessary to perfect the security interest in the
Collateral created under the Security Documents have been duly made or taken and
are in full force and effect, and the Security Documents create in favor of the
Collateral Agent for the benefit of the Secured Parties are valid and, together
with such filings and other actions, perfected first priority security interest
in the Collateral (subject to Permitted Collateral Liens), securing the payment
of the Secured Obligations, and all filings and other actions necessary to
perfect such security interest have been 43

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duly taken. Puget Equico and the Borrower are the legal and beneficial owners of
the Collateral free and clear of any Lien, except for Liens permitted under
Section 6.01. SECTION 3.23. Anti-Corruption Laws and Sanctions. The Borrower has
implemented and maintains in effect policies and procedures designed to ensure
compliance by the Borrower, its Subsidiaries and their respective directors,
officers, employees and agents with Anti-Corruption Laws and applicable
Sanctions, and the Borrower, its Subsidiaries and their respective officers and
employees and to the knowledge of the Borrower its directors and agents, are in
compliance with Anti-Corruption Laws and applicable Sanctions in all material
respects. None of (a) the Borrower, any Subsidiary or to the knowledge of the
Borrower or such Subsidiary any of their respective directors, officers or
employees, or (b) to the knowledge of the Borrower, any agent of the Borrower or
any Subsidiary that will act in any capacity in connection with or benefit from
the credit facility established hereby, is a Sanctioned Person. No Borrowing,
use of proceeds or other Transactions will violate any Anti-Corruption Law or
applicable Sanctions. SECTION 3.24. EEA Financial Institutions. Neither the
Borrower nor any of its Subsidiaries is an EEA Financial Institution. ARTICLE IV
Conditions SECTION 4.01. Effective Date. The obligations of the Lenders to make
Loans hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):
The Administrative Agent (or its counsel) shall have received from each party
hereto either (i) a counterpart of this Agreement signed on behalf of such party
or (ii) written evidence satisfactory to the Administrative Agent (which may
include telecopy or electronic transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement. The
Administrative Agent shall have received a favorable written opinion (addressed
to the Administrative Agent and the Lenders and dated the Effective Date) of
Perkins Coie LLP, counsel for the Borrower, in form and substance reasonably
acceptable to the Administrative Agent, and covering such other matters relating
to the Borrower, the Financing Documents or the Transactions as the
Administrative Agent shall reasonably request. The Borrower hereby requests such
counsel to deliver such opinion. The Lenders shall have received (i)
satisfactory audited consolidated financial statements of the Borrower for the
two most recent fiscal years ended prior to the Effective Date as to which such
financial statements are available and (ii) satisfactory unaudited interim
consolidated financial statements of the Borrower for each quarterly period
ended subsequent to the date of the latest financial statements delivered
pursuant to clause (i) of this paragraph as to which such financial statements
are publicly available. The Administrative Agent shall have received (i) such
documents and certificates as the Administrative Agent or its counsel may
reasonably request relating to the organization, existence and good standing of
the Borrower, the authorization of the Transactions and any other legal matters
relating to the Borrower, the Financing Documents or the Transactions, all in
form and substance satisfactory to the Administrative Agent and its counsel and
as further described in the list of closing documents attached as Exhibit E,
(ii) to the extent requested by any of the Lenders, all documentation and other
information required by bank regulatory authorities under applicable
“know-your-customer” and anti-money 44

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laundering rules and regulations, including the USA PATRIOT Act and (iii) to the
extent the Borrower qualifies as a “legal entity customer” under the Beneficial
Ownership Regulation, any Lender that has requested, in a written notice to the
Borrower at least the (10) days prior to the Effective Date, a Beneficial
Ownership Certification in relation to the Borrower shall have received such
Beneficial Ownership Certification (provided that, upon the execution and
delivery by such Lender of its signature page to this Agreement, the condition
set forth in this clause (iii) shall be deemed to be satisfied). The
Administrative Agent shall have received a certificate, dated the Effective Date
and signed by the President, a Vice President or a Financial Officer of the
Borrower, confirming compliance with the conditions set forth in paragraphs (a)
and (b) of Section 4.02. [Reserved]. The Administrative Agent and the Lenders
shall have received all fees and other amounts due and payable on or prior to
the Effective Date, including, to the extent invoiced, reimbursement or payment
of all out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder. Liens creating a first priority security interest in the collateral
shall have been perfected to the reasonable satisfaction of the Administrative
Agent. The Administrative Agent (or its counsel) shall have received from each
party thereto such other documents listed on Exhibit E hereto. The
Administrative Agent shall notify the Borrower and the Lenders of the Effective
Date, and such notice shall be conclusive and binding. SECTION 4.02. Each Credit
Event. The obligation of each Lender to make a Loan on the occasion of any
Borrowing is subject to the satisfaction of the following conditions: The
representations and warranties of the Borrower set forth in this Agreement shall
be true and correct in all material respects (other than to the extent qualified
by materiality or “Material Adverse Effect”, in which case, such representations
and warranties shall be true and correct) on and as of the date of such
Borrowing (or to the extent that such representations and warranties
specifically refer to an earlier date, as of such earlier date). At the time of
and immediately after giving effect to such Borrowing, no Default or Event of
Default shall have occurred and be continuing. Each Borrowing shall be deemed to
constitute a representation and warranty by the Borrower on the date thereof as
to the matters specified in paragraphs (a) and (b) of this Section. ARTICLE V
Affirmative Covenants Until the Commitments have expired or been terminated and
the principal of and interest on each Loan and all fees payable hereunder shall
have been paid in full, the Borrower covenants and agrees with the Lenders that
the Borrower will, and will cause its Subsidiaries to: SECTION 5.01. Financial
Statements. Deliver to the Administrative Agent (for prompt further distribution
to the Collateral Agent, if applicable, and each Lender): 45

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as soon as available, but in any event within ninety (90) days after the end of
each fiscal year of the Borrower or as otherwise earlier required by the SEC,
from and after the Effective Date, a consolidated balance sheet of the Borrower
and its consolidated Subsidiaries as at the end of such fiscal year, and the
related consolidated statements of income or operations, stockholders’ equity
and cash flows for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
prepared in accordance with GAAP, audited and accompanied by (i) a report and
opinion by any firm of independent registered public accounting of nationally
recognized standing (or any other independent registered public accounting firm
acceptable to the Administrative Agent in its sole discretion), which report and
opinion shall be prepared in accordance with GAAP, shall not be subject to any
“going concern” or like qualification or exception or any qualification or
exception as to the scope of such audit and shall state that said consolidated
financial statements fairly present the consolidated financial condition and
results of operations of the Borrower and its consolidated Subsidiaries as at
the end of, and for, such fiscal year in accordance with GAAP; as soon as
available, but in any event within forty-five (45) days after the end of each of
the first three (3) fiscal quarters of each fiscal year of the Borrower or as
otherwise earlier required by the SEC, from and after the Effective Date, an
unaudited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of each such fiscal quarter, and the related (i)
consolidated statements of income or operations for such fiscal quarter and for
the portion of the fiscal year then ended and (ii) consolidated statements of
cash flows for the portion of the fiscal year then ended, setting forth in each
case in comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail and certified by an Authorized Officer as fairly
presenting in all material respects the financial condition, results of
operations, stockholders’ equity and cash flows of the Borrower and its
consolidated Subsidiaries in accordance with GAAP, subject only to normal
year-end audit adjustments and the absence of footnotes; [reserved]; promptly
after the same become publicly available, notice of all registration statements,
regular periodic reports and press releases filed by the Borrower or any
Subsidiary with the SEC, or any Governmental Authority succeeding to any or all
of the functions of the SEC, or with any national securities exchange; such
other information regarding the Borrower Group Members as the Administrative
Agent or any Lender may reasonably request for the Administrative Agent or such
Lender to carry out and be satisfied with the “know your customer” and
anti-money laundering rules and regulations, including, without limitation, the
USA PATRIOT Act and the Beneficial Ownership Regulation or other checks required
to be carried out by local regulatory authorities; and such other information
regarding the Borrower and its Subsidiaries as the Administrative Agent or any
Lender may reasonably request and which is reasonably available to the Borrower
and its Subsidiaries. SECTION 5.02. Compliance Certificate. Deliver to the
Administrative Agent (for prompt further distribution to the Collateral Agent
and each Lender), (a) concurrently with any delivery of financial statements
under Section 5.01(a) or Section 5.01(b), a certificate of an Authorized Officer
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Section 6.09, and (iii) stating whether any change
in GAAP applicable to the financial statements or in the application thereof has
occurred since the date of the audited financial statements referred to in
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except as described in the financial statements provided pursuant to Section
4.01(c), or Section 5.01(a) or Section 5.01(b)) and, if any such change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate, and (b) concurrently with any delivery of
financial statements under Section 5.01(a), a certificate of the accounting firm
that reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial statements of
any Default under Section 6.09 (which certificate may be limited to the extent
required by accounting rules or guidelines and in any event shall be limited to
Defaults insofar as they may relate to accounting matters). SECTION 5.03.
Notices. Promptly, but in any event within five (5) Business Days, after the
Borrower has obtained knowledge thereof and in the case of clauses (a) through
(d), unless prohibited by applicable Law, notify or deliver to the
Administrative Agent (for prompt notification or delivery to the Collateral
Agent and each Lender): copies of any written notice received by the Borrower
regarding any actual or threatened dispute, litigation, investigation,
proceeding or suspension with respect to the Borrower or any of its Subsidiaries
by or before any court or any Governmental Authority which could reasonably be
expected to result in a Material Adverse Effect; copies of all Material Notices
and Material Communications received by the Borrower or any of its Subsidiaries
in connection with any material Contractual Obligation or from any Governmental
Authority which could reasonably be expected to result in a Material Adverse
Effect; [reserved]; details of any other events or circumstances that results in
or would reasonably be expected to result in a Material Adverse Effect; details
of any Default or Event of Default; details of each change to the Senior Debt
Rating; and any change in the information provided in the Beneficial Ownership
Certification delivered to such Lender that would result in a change to the list
of beneficial owners identified in such certification. Each notice pursuant to
this Section shall be accompanied by a written statement of an Authorized
Officer of the Borrower (x) that such notice is being delivered pursuant to
Section 5.03(a), (b), (c), (d) (e) or (g) (as applicable) and (y) setting forth
details of the occurrence referred to therein and stating what action the
Borrower has taken and proposes to take with respect thereto. SECTION 5.04.
Compliance with Laws. The Borrower will, and will cause each of its Subsidiaries
to, comply with all applicable laws, including, without limitation, ERISA and
all other employee benefit laws and shall from time to time obtain and renew,
and shall comply with, each Regulatory Approval as is or in the future shall be
necessary for the operation of its business under applicable Laws (except for
any non-compliance which could not reasonably be expected to result in a
Material Adverse Effect). The Borrower and each Subsidiary of the Borrower shall
not petition, request or take any legal or administrative action that seeks to
amend, supplement or modify any Regulatory Approval in any material respect
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expected to result in a Material Adverse Effect. The Borrower shall promptly
upon receipt by it or any of its Subsidiaries or upon publication furnish to the
Administrative Agent and each Lender a copy (certified by an Authorized Officer
of the Borrower) of each amendment, supplement or modification to any such
Regulatory Approval. The Borrower will maintain in effect and enforce policies
and procedures designed to ensure compliance by the Borrower, its Subsidiaries
and their respective directors, officers, employees and agents with
Anti-Corruption Laws and applicable Sanctions. SECTION 5.05. Preservation of
Existence, Etc. Preserve, renew and maintain in full force and effect its legal
existence under the Laws of the jurisdiction of its organization, except as
expressly permitted by Section 6.04; and (b) take all reasonable action to
maintain all rights, privileges (including its status as validly existing),
permits, licenses and franchises necessary in the normal conduct of its
business, except such rights, privileges, permits, licenses or franchise which,
if not maintained, could not reasonably be expected to result in a Material
Adverse Effect. SECTION 5.06. Compliance with Environmental Laws. Except as
specified in Schedule 3.19 and except, and in each case, to the extent that the
failure to do so could not reasonably be expected to result in, individually or
in the aggregate, a Material Adverse Effect: (i) comply, and take all reasonable
actions to cause all lessees and other Persons operating or occupying its
properties to comply, with all applicable Environmental Laws and Environmental
Permits; (ii) obtain and renew all Environmental Permits reasonably necessary
for its operations and properties; and (iii) in each case to the extent required
by Environmental Laws, conduct any investigation, study, sampling and testing,
and undertake any cleanup, removal, remedial or other action reasonably
necessary to remove and clean up all Hazardous Materials from any of its
properties, to the extent required by the requirements of all Environmental
Laws. SECTION 5.07. Maintenance of Properties; Ownership of Subsidiaries. Except
as contemplated by Schedule 5.07, and except to the extent that the failure to
do so could not reasonably be expected to result in a Material Adverse Effect,
(i) maintain, preserve and protect all of its material Properties and equipment
necessary in the operation of its business in good working order, repair and
condition, ordinary wear and tear excepted and casualty or condemnation
excepted, and (ii) make all necessary renewals, replacements, modifications,
improvements, upgrades, extensions and additions thereof or thereto in
accordance with prudent industry practice; and The Borrower shall at all times
from and after the Effective Date own, directly, 100% of the Equity Interests of
PSE. SECTION 5.08. Maintenance of Insurance. Maintain insurance with financially
sound and reputable insurance companies with respect to all of its Properties
and assets, as is usually carried by companies engaged in similar business and
as is consistent with the prudent operation of its business; provided, however,
neither the Borrower nor any Borrower Group Member shall be prohibited from
self- insuring to the extent that such self-insurance is consistent with the
prudent operation of its business and companies engaged in similar businesses.
SECTION 5.09. Use of Proceeds. The Borrower shall use the proceeds of the Loans
to make a capital contribution to PSE and shall cause PSE to use such capital
contribution to pay principal of PSE Indebtedness. The Borrower will not request
any Borrowing, and the Borrower shall not use, and shall procure that its
Subsidiaries and its or their respective directors, officers, employees and
agents shall not use, the proceeds of any Borrowing (i) in furtherance of an
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authorization of the payment or giving of money, or anything else of value, to
any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of
funding, financing or facilitating any activities, business or transaction of or
with any Sanctioned Person, or in any Sanctioned Country or (iii) in any manner
that would result in the violation of any Sanctions applicable to any party
hereto. SECTION 5.10. Payment of Obligations. Pay, discharge or otherwise
satisfy as the same shall become due and payable, all its obligations and
liabilities in respect of material Taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits or in respect of its
Property, except to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect. SECTION 5.11. Cooperation.
Perform such acts as are reasonably requested by the Administrative Agent to
carry out the intent of, and transactions contemplated by, this Agreement and
the other Financing Documents. Promptly upon the reasonable request by any
Agent, or any Lender through the Administrative Agent, do, execute, acknowledge,
deliver, record, rerecord, file, re-file, register and re-register any and all
such further acts, deeds, conveyances, pledge agreements, mortgages, deeds of
trust, trust deeds, assignments, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments as any Agent, or any Lender through the
Administrative Agent, may reasonably require from time to time in order to (a)
subject the Borrower’s properties, assets, rights or interests to the Liens now
or hereafter intended to be covered by any of the Security Documents, and (b)
perfect and maintain the validity, effectiveness and priority of any of the
Security Documents and any of the Liens intended to be created thereunder.
Notwithstanding anything to the contrary set forth herein, the Administrative
Agent shall not direct the Collateral Agent to enter into any Mortgage in
respect of any real property acquired by the Borrower or any Subsidiary after
the Effective Date until the date that is (a) if such Mortgage relates to a
property not located in a “special flood hazard area”, ten (10) Business Days or
(b) if such Mortgage relates to a property located in a “special flood hazard
area”, thirty (30) days, after the Collateral Agent or the Administrative Agent
has delivered to the Lenders the following documents in respect of such real
property: (i) a completed flood hazard determination from a third party vendor;
(ii) if such real property is located in a “special flood hazard area”, (A) a
notification to the Borrower or Subsidiary, as applicable, of that fact and (if
applicable) notification to such Borrower or Subsidiary, that flood insurance
coverage is not available and (B) evidence of the receipt by such Borrower or
Subsidiary, of such notice; and (iii) if required by applicable Flood Insurance
Laws, evidence of required flood insurance with respect to which flood insurance
has been made available under applicable Flood Insurance Laws; provided that any
such mortgage may be entered into prior to such period expiring if the
Collateral Agent and the Administrative Agent shall have received confirmation
from each Lender that such Lender has completed any necessary flood insurance
due diligence to its reasonable satisfaction. SECTION 5.12. Books and Records.
Maintain proper books of record and account, in which entries that are full,
true and correct in all material respects and are in conformity with GAAP
consistently applied shall be made of all material transactions and matters
involving the assets and business of the Borrower or such Subsidiary, as the
case may be. SECTION 5.13. Financing Documents; Material Documents. Perform and
observe all of its covenants and obligations pursuant to any material
Contractual Obligation to which it is a party or pursuant to which it has any
obligations, except to the extent that the failure to do so could not reasonably
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Take all reasonable and necessary action to prevent the termination or
cancellation of any Financing Document or other material Contractual Obligation
in accordance with the terms of such Financing Document or other material
Contractual Obligation or otherwise, except to the extent, in the case of any
material Contractual Obligation, that the failure to do so could not reasonably
be expected to result in a Material Adverse Effect; and enforce against the
relevant party to a material Contractual Obligation (other than the Lenders or
Agents) such covenants of such material Contractual Obligation in accordance
with its terms, except to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect. SECTION 5.14.
Maintenance of Ratings. From and after the Effective Date, the Borrower will
maintain monitored public ratings on its senior unsecured debt from S&P, Moody’s
and Fitch, except to the extent that any of such ratings agencies cease to issue
debt ratings generally. SECTION 5.15. Inspection Rights. At any reasonable time
and from time to time upon reasonable notice (but no more than once at the
Borrower’s expense in any fiscal year so long as no Event of Default has
occurred and is continuing), permit or arrange for the Administrative Agent (and
permit any Lender to accompany the Administrative Agent), to examine and make
copies of and abstracts from the records and books of account of, and the
properties of, the Borrower and each of its Subsidiaries, and to discuss the
affairs, finances and accounts of the Borrower and its Subsidiaries with the
Borrower and its Subsidiaries and their respective officers, directors and
accountants (provided that (i) so long as no Event of Default has occurred and
is continuing, a representative of the Borrower may be present for any
communication with the independent public accountants and (ii) the Borrower
reserves the right to restrict access to any generating facilities in accordance
with reasonably adopted procedures relating to safety and security, and to the
extent reasonably requested to maintain normal operations of the Borrower or any
of its Subsidiaries). SECTION 5.16. Additional Collateral. The Borrower will
cause all of its owned property (whether real, personal, tangible, intangible,
or mixed) to be subject at all times to first priority, perfected Liens in favor
of the Collateral Agent for the benefit of the Secured Parties to secure the
Secured Obligations in accordance with the terms and conditions of the Security
Documents, subject in any case to Liens permitted by Section 6.01. Without
limiting the generality of the foregoing, the Borrower will cause the issued and
outstanding Equity Interests directly owned by the Borrower to be subject at all
times to a first priority, perfected Lien in favor of the Collateral Agent to
secure the Secured Obligations in accordance with the terms and conditions of
the Security Documents or such other pledge and security documents as the
Collateral Agent shall reasonably request. In the event of the addition of any
real property collateral, the Borrower will use commercially reasonable efforts
to cause to be delivered to the Collateral Agent “life of loan” flood zone
determination and, if applicable, flood insurance certificates and borrower
notices, as well as other documentation customarily delivered relative to real
estate collateral as reasonably requested by the Collateral Agent. SECTION 5.17.
Flood Insurance. If at any time any Mortgaged Real Property is located in a
designated “special flood hazard area” with respect to which flood insurance has
been made available under applicable Flood Insurance Laws, the Borrower and its
Subsidiaries will (i) maintain fully paid flood hazard insurance on such
Mortgaged Real Property on such terms and in such amounts as required by The
National Flood Insurance Reform Act of 1994, and (ii) provide within thirty (30)
days (or such longer period as the Administrative Agent shall agree) evidence of
such coverage as the Collateral Agent or the Administrative Agent may reasonably
request, including, without limitation, (x) copies of any such flood insurance
policies naming the Collateral Agent as loss payee and (y) the Borrower or the
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Subsidiary’s application for a flood insurance policy plus proof of premium
payment, in each case to the extent requested by the Collateral Agent or the
Administrative Agent. ARTICLE VI Negative Covenants Until the Commitments have
expired or terminated and the principal of and interest on each Loan and all
fees payable hereunder have been paid in full, the Borrower covenants and agrees
with the Lenders that the Borrower shall not, nor shall it permit any of the
Operating Companies, to: SECTION 6.01. Liens. Create, incur, assume or suffer to
exist any Lien upon any of its material Property, assets or revenues, whether
now owned or hereafter acquired, other than the following: Liens for the benefit
of the Secured Parties pursuant to any Financing Document and, with respect to
PSE only, Liens in respect of cash collateral arrangements for letters of credit
issued under the Operating Company Credit Agreement; (i) Liens existing on the
Effective Date and listed on Schedule 6.01(b) or (ii) Liens securing any
Existing Indebtedness contemplated by clause (b) of the definition thereof;
provided, in the case of this clause (ii), that such Lien shall apply only to
Property (whether now owned or after-acquired) of a type that is subject to a
Lien securing the corresponding Existing Indebtedness referred to in clause (a)
of the definition thereof (including the proceeds thereof) and shall not extend
to any other Property; Liens for taxes, assessments or governmental charges
imposed on the Borrower or any Subsidiary or any of their property by any
Governmental Authority which are not yet due and payable or which are being
contested in good faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books of the
Borrower or such Subsidiary, to the extent required by and in accordance with
GAAP; Liens of carriers, warehousemen, mechanics, materialmen, repairmen,
construction contractors, statutory liens of landlords or other like liens
arising in the ordinary course of business which secure amounts not yet due and
payable or which are being contested in good faith and by appropriate
proceedings diligently conducted, if Person to the extent required by and in
accordance with GAAP; pledges or deposits in the ordinary course of business (i)
in connection with workers’ compensation, unemployment insurance and other
social security legislation or (ii) required to secure performance bids,
tenders, trade contracts, performance bonds, statutory obligations, leases,
government contracts, surety and appeals bonds, indemnity, performance or other
similar bonds in connection with judicial or administrative proceedings and
other obligations of a like nature (exclusive of obligations for borrowed
money); easements, rights-of-way, licenses, restrictions, encroachments,
protrusions and other similar encumbrances and minor title defects affecting
real property which, in the aggregate, do not in any case materially interfere
with the ordinary conduct of the business of any Borrower Group Member; Liens
securing judgments that do not involve any material risk of forfeiture of any
assets of any of the Operating Companies or any Financing Document that do not
exceed $50,000,000 in the aggregate (to the extent not covered by independent
third-party insurance as to which the insurer has been notified of such judgment
or order and has not denied coverage) and that within ten (10) days are being
contested in good faith and by appropriate proceedings diligently conducted, if
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with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP for the payment of money not constituting an Event of
Default under Section 7.01(k); Liens securing payment of Tax-Free Debt and
credit enhancement obligations related to such Tax-Free Debt; provided that (i)
any claims in respect of the principal balance of the obligations being secured
thereby shall not exceed $250,000,000 in the aggregate at any time, and (ii)
each such Lien shall extend only to the property, and proceeds thereof, being
financed by the Tax-Free Debt secured thereby; Liens for purchase money security
interests or Capital Lease Obligations which are secured solely by the assets
acquired (and proceeds and products thereof), up to $150,000,000 in the
aggregate; provided that such Lien arises prior to or within 60 days after such
acquisition or the incurrence of such Capital Lease Obligation; zoning, building
and other generally applicable land use restrictions, which, in the aggregate,
do not in any case materially interfere with the ordinary conduct of the
business of the Borrower and the Operating Companies taken as a whole; licenses
of intellectual property entered into in the ordinary course of business; Liens
that have been placed by a third party on the fee title of leased real property
or property over which any Borrower Group Member has easement, license or
similar rights, and subordination or similar agreements relating thereto;
bankers’ liens, rights of setoff and other similar liens existing solely with
respect to cash and Cash Equivalents on deposit in one or more accounts
maintained by any Borrower Group Member arising in the ordinary course of
business from netting services, overdraft protection, Banking Services
Obligations and otherwise in connection with the maintenance of deposit,
securities and commodities accounts; Liens solely on any cash earnest money or
other deposits made by Borrower or any of its Subsidiaries in connection with
any Permitted Acquisition, letter of intent or purchase agreement permitted
hereunder; purported Liens evidenced by the filing of precautionary UCC
financing statements relating solely to operating leases of personal property or
consignments or similar arrangements entered into in the ordinary course of
business; Liens on (i) insurance policies and the proceeds thereof securing the
financing of the premiums with respect thereto to the extent securing
Indebtedness owed to any Person providing property, casualty, business
interruption or liability insurance to the Borrower or any Operating Company of
the Borrower so long as such Indebtedness shall not be in excess of the unpaid
costs of, and shall be incurred only to defer the cost of, such insurance for
the annual period in which such Indebtedness is incurred and in any event, not
in excess of $5,000,000 in the aggregate at any time (“Permitted Premium
Financing Indebtedness”), (ii) dividends and rebates and other identifiable
proceeds therefrom which may become payable under insurance policies and loss
payments which reduce the incurred premiums on such insurance policies, (iii)
rights which may arise under state insurance guarantee funds relating to any
such insurance policy, in each case securing Permitted Premium Financing
Indebtedness and (iv) pledges or deposits of cash and Cash Equivalents securing
deductibles, self-insurance, co-payment, co-insurance, retentions or similar
obligations to providers of property, casualty or liability insurance in the
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course of business; provided, however, that claims in respect of such Liens
shall not exceed $5,000,000 at any time; Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods in the ordinary course of business;
Liens on conservation investment assets as security for obligations incurred in
financing or refinancing bondable conservation investments in accordance with
the laws of the State of Washington; any Lien existing on any property or asset
prior to the acquisition thereof by the Borrower or any Subsidiary or existing
on any property or asset of any Person that becomes a Subsidiary after the date
hereof pursuant to a Permitted Acquisition (or on such Person’s assets) prior to
the time such Person becomes a Subsidiary; provided that (i) such Lien is not
created in contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply
to any other property or assets of the Borrower or any other Subsidiary (other
than the proceeds of such property or assets), (iii) such Lien shall secure only
those obligations which it secures on the date of such acquisition or the date
such Person becomes a Subsidiary, as the case may be, and extensions, renewals
and replacements thereof that do not increase the outstanding principal amount
thereof and (iv) such Lien, together with any other Liens incurred pursuant to
this paragraph (s) shall not secure Indebtedness or other obligations in excess
of $250,000,000 in the aggregate; other Liens securing Indebtedness and other
obligations in an aggregate amount not to exceed $100,000,000 at any time; Liens
securing Permitted Refinancing Indebtedness of the Borrower and other
Indebtedness of the Borrower of the type described in clauses (a) and (b) of the
definition of “Indebtedness” (but not of any Indebtedness of any other Borrower
Group Member); provided that such Liens and any rights in respect thereof are
subject to the terms of the Collateral Agency Agreement, and the Borrower shall
be in compliance (on a Pro Forma Basis reasonably acceptable to the
Administrative Agent) with the covenant contained in Section 6.09; Liens
securing PSE’s obligations arising pursuant to that certain Contracting Party’s
Agreement dated December 4, 2007 entered into between PSE and Natural Gas
Exchange, Inc. as amended and replaced from time to time solely to the extent
the aggregate amount of all such obligations thereunder shall not exceed
$50,000,000 at any time outstanding, and provided that such Liens shall apply
only to property or assets of PSE of the type securing such obligations as of
the date of this Agreement; Liens securing Indebtedness or arising in connection
with Receivables Facilities, provided, that the sum (without duplication) of all
such Indebtedness, plus the aggregate investment or claim held at any time by
all purchasers, assignees or other transferees of (or of interests in)
receivables and other rights to payment in all Receivables Facilities shall not
at any time exceed $250,000,000; and Liens pursuant to (i) PSE’s First and
Refunding Mortgage, dated as of June 2, 1924 (as supplemented and amended, the
“Existing 1924 Mortgage”), as described therein, (ii) PSE’s Indenture of First
Mortgage, dated as of April 1, 1957 (as supplemented and amended, the “Existing
1957 Mortgage”), as described therein, (iii) PSE’s Indenture, dated as of
December 1, 1997 (as supplemented and amended, the “Existing 1997 Indenture”),
as described therein, and (iv) any replacement indenture in respect of the
Existing 1924 Mortgage, the Existing 1957 Mortgage or the Existing 1997
Indenture, and any supplements thereto, so long as (1) any such Liens under any
such replacement indenture apply to the property or assets of PSE in a manner
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Mortgage, the Existing 1957 Mortgage or the Existing 1997 Indenture, as
applicable, and (2) the borrowing capacity and other restrictions on PSE’s
ability to incur any obligations under any such replacement indenture are
substantially the same as those set forth in the Existing 1924 Mortgage, the
Existing 1957 Mortgage or the Existing 1997 Indenture, as applicable; provided
that notwithstanding any of the foregoing to the contrary, other than pursuant
to paragraphs (a), (d), (e), (m), (n), (p) and (u) above, the Borrower shall not
agree to the imposition of any Lien upon the Collateral. SECTION 6.02.
Dispositions. Make any Disposition or enter into any agreement to make any
Disposition, except: Dispositions (other than Collateral constituting Equity
Interests in PSE) in the ordinary course of business (including Dispositions of
obsolete or worn out or surplus property no longer required or useful in the
business or operations of the Borrower or any of its Subsidiaries); Dispositions
of assets and businesses specified on Schedule 5.07; Dispositions of Investments
in Cash Equivalents in the ordinary course of business; Dispositions of assets
which individually or in the aggregate are less than 20% of the Consolidated
Tangible Net Assets as of the Effective Date and for which no less than 80% of
the proceeds received therefor are in cash or Cash Equivalents; Dispositions
constituting a Lien permitted pursuant to Section 6.01; the sale or issuance of
any Subsidiary’s Equity Interests to the Borrower; Dispositions of assets in
connection with any transaction permitted by Section 6.04; assignments and
licenses of intellectual property or other intangibles of the Borrower Group
Members in the ordinary course of business; any Disposition of any asset or
interest therein in exchange for utility plant, equipment or other utility
assets (other than notes or other obligations) in each case equal to the fair
market value (as determined in good faith by the Borrower) of such asset or
interest therein; provided, however, that the fair market value of any such
assets or interests Disposed of under this paragraph (i) shall not exceed
$10,000,000 in the aggregate in any fiscal year; [reserved]; [reserved]; and the
sale, assignment or other transfer of accounts receivable or other rights to
payment pursuant to any Receivables Facility. In the case of any of the
foregoing Dispositions, the Borrower and the Subsidiaries are in compliance, on
a pro forma basis after giving effect to such Disposition with the covenant
contained in Section 6.09 recomputed as of the last day of the most recently
ended fiscal quarter of the Borrower for which financial statements are
available, as if such Disposition (and any related repayment of Indebtedness)
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testing such compliance and, if the Net Cash Proceeds in respect of such
Disposition under clause (b), (d) or (j) of this Section 6.02 exceeds 5% of
total assets of the Borrower and its Subsidiaries on a consolidated basis as set
forth on the most recent financial statements delivered pursuant to Section
4.01(c) and 5.01(a), the Borrower shall have delivered to the Administrative
Agent a certificate of a Financial Officer of the Borrower to such effect,
together with all relevant financial information, statements and projections
requested by the Administrative Agent. SECTION 6.03. Investments. Make or hold
any Investments, except: Investments by the Borrower or an Operating Company in
cash and Cash Equivalents; Investments by the Borrower in Interest Hedging
Agreements; Investments by PSE or any other Operating Companies in Other Hedging
Agreements entered into in the ordinary course of business and not for
speculative purposes; Intercompany Loans from the Borrower to any Operating
Company or from PSE to its Subsidiaries which are Operating Companies; Equity
Interests in (x) Subsidiaries in existence on the date hereof, (y) Operating
Companies acquired or created after the Effective Date in connection with
Permitted Acquisitions, and (z) Subsidiaries consisting of Immaterial
Subsidiaries; Permitted Acquisitions; Investments received in connection with
the bankruptcy or reorganization of, or settlement of delinquent accounts and
disputes with, customers and supplies, in each case in the ordinary course of
business; extensions of trade credit in the ordinary course of business;
Investments made as a result of the receipt of non-cash consideration from a
Disposition in compliance with Section 6.02; Investments made by any Person that
becomes a Subsidiary after the date hereof; provided that such Investment exists
at the time such Person becomes a Subsidiary and are not made in contemplation
of or in connection with such Person becoming a Subsidiary; loans and advances
made in the ordinary course of business to their respective employees, officers
and directors so long as the aggregate principal amount thereof at any time
outstanding (excluding temporary advances in the ordinary course of business)
shall not exceed $3,000,000; Investments existing on the date hereof and
identified on Schedule 6.03(l); Investments by the Borrower in LNG Co., so long
as the aggregate amount of capital contributions to LNG Co. pursuant to this
clause (m) does not exceed $200,000,000 in the aggregate at any time
outstanding; and in addition to Investments permitted by clauses (a) through (m)
above so long as no Default or Event of Default shall exist immediately prior
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Investments so long as the aggregate amount invested, loaned or advanced
pursuant to this clause (n) does not exceed $100,000,000 in the aggregate at any
time outstanding. SECTION 6.04. Fundamental Changes. Merge, dissolve, liquidate,
consolidate with or into another Person, or Dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
except for (a) Permitted Acquisitions, (b) Dispositions permitted under Section
6.02, (c) the liquidation or dissolution of any Immaterial Subsidiary and (d) if
at the time thereof and immediately after giving effect thereto no Event of
Default or Default shall have occurred and be continuing, (i) the merger,
amalgamation or consolidation of any Operating Company into or with the Borrower
in a transaction in which the Borrower is the surviving corporation, and (ii)
the merger, amalgamation or consolidation of any Operating Company into or with
any other Operating Company or the liquidation or dissolution of any Operating
Company (other than PSE) into any other Operating Company; provided, however,
that in any merger or amalgamation or consolidation involving PSE or any
liquidation or dissolution of any Operating Company into PSE, PSE shall be the
surviving corporation. SECTION 6.05. Nature of Business. (a) Engage in any line
of business substantially different from those lines of business conducted by
the Borrower Group Members on the Effective Date or in connection with any
Permitted Acquisition or any business reasonably related, complimentary or
ancillary thereto. In the case of the Borrower from and after the Effective
Date, conduct, transact or otherwise engage in any business or operations other
than those reasonably related to (A) its ownership of the Equity Interests of
its Subsidiaries, (B) the maintenance of its legal existence, (C) the
performance of this Agreement and the other Financing Documents, and (D) any
transaction that the Borrower is expressly permitted to enter into or consummate
under this Agreement. Terminate or amend, waive, modify or supplement any of the
provisions of its Organizational Documents or consent to any such termination,
amendment, waiver, modification or supplement, unless any of the foregoing
actions could not reasonably be expected to result in a Material Adverse Effect.
SECTION 6.06. Transactions with Affiliates; Management Fees. (a) Enter into any
transaction of any kind with any Affiliate (including Affiliate Service
Agreements), whether or not in the ordinary course of business, other than (i)
on terms substantially as favorable to the Borrower Group Member as would be
obtainable by such Borrower Group Member at the time in a comparable arm’s-
length transaction with a Person other than an Affiliate, (ii) Intercompany
Loans to the extent permitted under Section 6.03, (iii) as approved or required
by any Governmental Authority or as required by applicable Law, and (iv) the
payment of Management Fees permitted by clause (b) below. Pay any Management
Fees or enter into or permit to exist any agreement or arrangement for the
payment of Management Fees, unless such fees are expressly subordinated to the
Secured Obligations on the terms set forth in Exhibit M. SECTION 6.07.
Accounting Changes. Make any change in its fiscal year except to the extent
required by applicable Law and/or GAAP. In such event, the Borrower may, upon
written notice to the Administrative Agent, change its fiscal year to any other
fiscal year reasonably acceptable to the Administrative Agent, in which case,
the Borrower and the Administrative Agent will, and are hereby authorized by the
Lenders to, make any adjustments to this Agreement that are necessary to reflect
such change in fiscal year arising as a result of such change in applicable Law.
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SECTION 6.08. Restrictive Agreements. Directly or indirectly, enter into, or
incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon (a) the ability of any Borrower Group
Member to create, incur or permit to exist any Lien upon any of its material
Property or assets (except as permitted under Section 6.01), or (b) the ability
of PSE or any other wholly-owned Subsidiary to pay dividends or other
distributions with respect to, or to return capital in respect of its common
Equity Interests or to make or repay loans or advances to any Borrower Group
Member or to Guarantee Indebtedness of any Borrower Group Member; provided that
the foregoing shall not apply to: (i) prohibitions, restrictions and conditions
imposed by applicable Laws, any Governmental Authority or this Agreement; (ii)
prohibitions, restrictions and conditions identified on Schedule 3.14 or
otherwise resulting from or relating to Existing Indebtedness (without
amendment, modification or waiver, other than in connection with Permitted
Refinancing Indebtedness) or prohibitions, restrictions and conditions not more
restrictive taken as a whole than such provisions in agreements entered into
after the Effective Date to evidence or govern Indebtedness that is permitted by
this Agreement; (iii) provisions of the type described in clause (a) above
imposed by the holder of any Lien permitted by Section 6.01(d), (e), (h), (i),
(m), (n), (r) and (s) but solely with respect to the property purported to be
encumbered by such Lien; (iv) any agreement in effect at the time any Person
becomes a Subsidiary pursuant to a Permitted Acquisition and not in
contemplation of, or in connection with, such Person becoming a Subsidiary and
only relating to or in connection with the Property or assets of such Person
(and any extensions, renewals, or replacements of such agreement so long as any
restrictions and conditions in such extended, renewed or replaced agreement are
not more restrictive than the applicable original agreement or extend to
additional Property); (v) customary restrictions and conditions contained in
agreements relating to any Disposition of any asset or property; provided that
such restrictions and conditions only apply to the asset or property to be sold,
assigned or transferred and such sale, assignment or transfer is permitted by
Section 6.02; and (vi) customary provisions restricting assignment or transfer
of any agreement entered into in the ordinary course of business. SECTION 6.09.
Financial Covenant. Maximum Leverage Ratio. The Borrower will not permit the
Leverage Ratio to be greater than 0.65 to 1.00 at any time. SECTION 6.10.
Preservation of Rights. Assign, cancel, terminate, waive any material default
under, material breach of or material right under, or materially amend,
supplement or modify or give any material consent under (including any consent
or assignment of), any Financing Document or material Contractual Obligation,
except, other than in the case of any Financing Document, to the extent that any
such action would not reasonably be expected to result in a Material Adverse
Effect. 57

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ARTICLE VII Events of Default If any of the following events (“Events of
Default”) shall occur: the Borrower shall fail to pay any principal of any Loan
when and as the same shall become due, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise; the Borrower shall fail to pay
any interest on any Loan or any fee or any other amount (other than an amount
referred to in clause (a) of this Article) payable under this Agreement or any
other Financing Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of three (3) Business Days;
any representation or warranty made or deemed made by or on behalf of the
Borrower or any Subsidiary in or in connection with this Agreement or any other
Financing Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement or any
other Financing Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any material respect when made
or deemed made; the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.03(e), 5.05 or 5.09 or in Article
VI (other than Sections 6.05(a), 6.05(b), 6.06 and 6.07); The Borrower or any
Subsidiary fails to perform or observe any other covenant, condition or
agreement (not specified in clauses (a), (b) or (d) of this Article VII)
contained in any Financing Document on its part to be performed or observed and
such failure continues for thirty (30) days after notice thereof to the Borrower
by the Administrative Agent or the Borrower having knowledge thereof; provided
that if such failure is capable of remedy but by its nature cannot reasonably be
cured within such period, the Borrower shall have such additional time not
exceeding an additional sixty (60) days as may be necessary to cure such failure
so long as the Borrower is proceeding diligently to cure such failure and such
additional cure period could not reasonably be expected to result in a Material
Adverse Effect; the Borrower or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness/Material Swap Obligation, when and as the same shall
become due and payable (after giving effect to any applicable grace or cure
period); any event or condition occurs that results in any Material
Indebtedness/Material Swap Obligation becoming due prior to its scheduled
maturity (other than Swap Agreements which become due as a result of the
voluntary prepayment of referenced debt described in such Swap Agreements) or
that enables or permits (with or without the giving of notice, the lapse of time
or both) the holder or holders of any Material Indebtedness/Material Swap
Obligation or any trustee or agent on its or their behalf to cause any Material
Indebtedness/Material Swap Obligation to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness; 58

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an involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the
Borrower or any Subsidiary (other than any Immaterial Subsidiary) or its debts,
or of a substantial part of its assets, under any federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary (other than
any Immaterial Subsidiary) or for a substantial part of its assets, and, in any
such case, such proceeding or petition shall continue undismissed for sixty (60)
days or an order or decree approving or ordering any of the foregoing shall be
entered; the Borrower or any Subsidiary (other than any Immaterial Subsidiary)
shall (i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h) of this
Article, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or any
Subsidiary (other than any Immaterial Subsidiary) or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing; (i) the Borrower or any Subsidiary (other than any Immaterial
Subsidiary) shall become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (ii) any writ or warrant of
attachment or execution or similar process is issued or levied against all or
any material part of the property of the Borrower and its Subsidiaries (other
than any Immaterial Subsidiary), taken as a whole, and is not released, vacated
or fully bonded within thirty (30) days after its issue or levy; one or more
judgments for the payment of money in an aggregate amount in excess of
$50,000,000 (to the extent not covered by independent third-party insurance as
to which the insurer has been notified of such judgment or order and has not
denied coverage) shall be rendered against the Borrower, any Subsidiary or any
combination thereof and the same shall remain undischarged for a period of sixty
(60) consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of the Borrower or any Subsidiary to enforce any such judgment; an
ERISA Event shall have occurred that, in the reasonable opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in a Material Adverse Effect; a Change in
Control shall occur; the occurrence of any “default”, as defined in any
Financing Document (other than this Agreement) or the breach of any of the terms
or provisions of any Financing Document (other than this Agreement), which
default or breach continues beyond any period of grace therein provided; or any
material provision of any Financing Document for any reason ceases to be valid,
binding and enforceable in accordance with its terms (or the Borrower or any
Subsidiary shall challenge the enforceability of any Financing Document or shall
assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Financing Documents has ceased to be
or otherwise is not valid, binding and enforceable in accordance with its
terms); 59

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at any time, any financial statements to be delivered pursuant to Section 5.01
shall be qualified by the auditors and such qualification could reasonably be
expected to result in a Material Adverse Effect; the termination, transfer,
revocation or modification of any material contracts or leases to which the
Borrower or any Subsidiary is a party, the result of which could reasonably be
expected to result in a Material Adverse Effect and such termination, transfer,
revocation or modification remains in effect for a period of more than thirty
(30) days after the occurrence thereof; or any Security Document shall for any
reason fail to create a valid and perfected first priority security interest in
the Collateral in excess of $100,000,000 in the aggregate purported to be
covered thereby, except as permitted by the terms of any Financing Document;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other Obligations of the Borrower accrued hereunder and under the other
Financing Documents, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; and in case of any event with respect to the
Borrower described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other Obligations
accrued hereunder and under the other Financing Documents, shall automatically
become due and payable, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower. Upon the occurrence
and during the continuance of an Event of Default, the Administrative Agent may,
and at the request of the Required Lenders shall, exercise any rights and
remedies provided to the Administrative Agent under the Financing Documents or
at law or equity. ARTICLE VIII The Administrative Agent Each of the Lenders
hereby irrevocably appoints the Administrative Agent as its agent and authorizes
the Administrative Agent to take such actions on its behalf, including execution
of the other Financing Documents, and to exercise such powers as are delegated
to the Administrative Agent by the terms of the Financing Documents, together
with such actions and powers as are reasonably incidental thereto. The
provisions of this Article are solely for the benefit of the Administrative
Agent and the Lenders, and neither the Borrower nor any Operating Company shall
have rights as a third party beneficiary of any of such provisions. It is
understood and agreed that the use of the term “agent” herein or in any other
Financing Documents (or any other similar term) with reference to the
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead such term is used as a matter of market custom, and is intended to
create or reflect only an administrative relationship between independent
contracting parties. The bank serving as the Administrative Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not the Administrative Agent,
and such bank and its Affiliates may accept deposits from, lend money to and 60

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generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Financing Documents. Without limiting the generality
of the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) the Administrative Agent shall not have any duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Financing
Documents that the Administrative Agent is required to exercise in writing as
directed by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
9.02); provided that the Administrative Agent shall not be required to take any
action that, in its opinion or the opinion of its counsel, may expose the
Administrative Agent to liability or that is contrary to any Finance Document or
applicable law, including for the avoidance of doubt any action that may be in
violation of the automatic stay under any Debtor Relief Law or that may effect a
forfeiture, modification or termination of property of a Defaulting Lender in
violation of any Debtor Relief Law, and (c) except as expressly set forth in the
Financing Documents, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 9.02) or in the absence of its own
gross negligence or willful misconduct as determined by a court of competent
jurisdiction by final and nonappealable judgment. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until written notice
thereof is given to the Administrative Agent by the Borrower or a Lender, and
the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Financing Document, (ii) the contents of any
certificate, report or other document delivered hereunder or in connection with
any Financing Document, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Financing
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Financing Document or any other agreement, instrument or document, (v) the
creation, perfection or priority of Liens on the Collateral or the existence of
the Collateral or (vi) the satisfaction of any condition set forth in Article IV
or elsewhere in any Financing Document, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent. The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts. The Administrative Agent may perform any and
all its duties and exercise its rights and powers by or through any one or more
sub-agents appointed by the Administrative Agent. The Administrative Agent and
any such sub-agent may perform any and all its duties and exercise its rights
and powers through their respective Related Parties. The exculpatory provisions
of the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
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Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such resignation, the Required
Lenders shall have the right, in consultation with the Borrower, to appoint a
successor. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within thirty (30) days after the
retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be a bank with an office in the United States,
or an Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent. Each Lender
expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representation or warranty to it and that no act by the Administrative Agent
hereinafter taken, including any review of the affairs of the Borrower and any
Operating Company, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Lender. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, any arranger
of this credit facility or any other Lender or any of their respective Related
Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement as a Lender, and to make, acquire or hold Loans hereunder. Each Lender
also acknowledges that it shall, independently and without reliance upon the
Administrative Agent, any arranger of this credit facility or any amendment
hereto or any other Lender or any of their respective Related Parties and based
on such documents and information (which may contain material, non-public
information within the meaning of the United States securities laws concerning
the Borrower and its Affiliates) as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Financing Document or any related agreement or
any document furnished hereunder or thereunder and deciding whether or to the
extent to which it will continue as a Lender or assign or otherwise transfer its
rights, interests and obligations hereunder. None of the Lenders, if any,
identified in this Agreement as a Syndication Agent, Lead Arranger or Bookrunner
shall have any right, power, obligation, liability, responsibility or duty under
this Agreement other than those applicable to all Lenders as such. Without
limiting the foregoing, none of such Lenders shall have or be deemed to have a
fiduciary relationship with any Lender. Each Lender hereby makes the same
acknowledgments with respect to the relevant Lender in its capacity as
Syndication Agent as it makes with respect to the Administrative Agent in the
preceding paragraph. The Lenders are not partners or co-venturers, and no Lender
shall be liable for the acts or omissions of, or (except as otherwise set forth
herein in case of the Administrative Agent) authorized to act for, any other
Lender. The Administrative Agent shall have the exclusive right on behalf of the
Lenders to enforce the payment of the principal of and interest on any Loan
after the date such principal or interest has become due and payable pursuant to
the terms of this Agreement. In its capacity, the Administrative Agent is a
“representative” of the Secured Parties within the meaning of the term “secured
party” as defined in the New York Uniform Commercial Code. Each Lender
authorizes the Administrative Agent to enter into each of the Security Documents
to which it is a party and to take all action contemplated by such documents.
Each Lender agrees that no Secured Party (other than the Administrative Agent)
shall have the right individually to seek to realize upon the 62

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security granted by any Security Document, it being understood and agreed that
such rights and remedies may be exercised solely by the Administrative Agent for
the benefit of the Secured Parties upon the terms of the Security Documents. In
the event that any Collateral is hereafter pledged by any Person as collateral
security for the Secured Obligations, the Administrative Agent is hereby
authorized, and hereby granted a power of attorney, to execute and deliver on
behalf of the Secured Parties any Financing Documents necessary or appropriate
to grant and perfect a Lien on such Collateral in favor of the Administrative
Agent on behalf of the Secured Parties. The Lenders hereby authorize the
Administrative Agent, at its option and in its discretion, to release any Lien
granted to or held by the Administrative Agent upon any Collateral (i) as
described in Section 9.02(d); (ii) as permitted by, but only in accordance with,
the terms of the applicable Financing Document; or (iii) if approved, authorized
or ratified in writing by the Required Lenders, unless such release is required
to be approved by all of the Lenders hereunder. Upon request by the
Administrative Agent at any time, the Lenders will confirm in writing the
Administrative Agent’s authority to release particular types or items of
Collateral pursuant hereto. Upon any sale or transfer of assets constituting
Collateral which is permitted pursuant to the terms of any Financing Document,
or consented to in writing by the Required Lenders or all of the Lenders, as
applicable, and upon at least five (5) Business Days’ prior written request by
the Borrower to the Administrative Agent, the Administrative Agent shall (and is
hereby irrevocably authorized by the Lenders to) execute such documents as may
be necessary to evidence the release of the Liens granted to the Administrative
Agent for the benefit of the Secured Parties herein or pursuant hereto upon the
Collateral that was sold or transferred; provided, however, that (i) the
Administrative Agent shall not be required to execute any such document on terms
which, in the Administrative Agent’s opinion, would expose the Administrative
Agent to liability or create any obligation or entail any consequence other than
the release of such Liens without recourse or warranty, and (ii) such release
shall not in any manner discharge, affect or impair the Secured Obligations or
any Liens upon (or obligations of the Borrower or any Subsidiary in respect of)
all interests retained by the Borrower or any Subsidiary, including (without
limitation) the proceeds of the sale, all of which shall continue to constitute
part of the Collateral. Any execution and delivery by the Administrative Agent
of documents in connection with any such release shall be without recourse to or
warranty by the Administrative Agent. In the case of the pendency of any
proceeding with respect to the Borrower under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
the Administrative Agent (irrespective of whether the principal of any Loan
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether the Administrative Agent shall have made any demand
on the Borrower) shall be entitled and empowered (but not obligated) by
intervention in such proceeding or otherwise: to file and prove a claim for the
whole amount of the principal and interest owing and unpaid in respect of the
Loans and all other Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims of the
Lenders and the Administrative Agent (including any claim under Sections 2.12,
2.13, 2.15, 2.16, 2.17 and 9.03) allowed in such judicial proceeding; and
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such
proceeding is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall
consent to the making of such payments directly to the Lenders, to pay to the
Administrative Agent any amount due to it, in its capacity as the Administrative
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ARTICLE IX Miscellaneous SECTION 9.01. Notices. (a) Except in the case of
notices and other communications expressly permitted to be given by telephone
(and subject to paragraph (b) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows: (i) if to the Borrower, to it at Puget Energy, Inc., 355
110th Avenue, Bellevue, Washington 98004, Attention of Treasurer, (Telecopy No.
(425) 462-3490), (Telephone No.(425) 457-5475); (ii) if to the Administrative
Agent, to it at Mizuho Bank, Ltd., 1800 Plaza Ten, Harborside Financial Center,
Jersey City, NJ 07311 Attention of Joyce Raynor, (Telephone No. (201) 626-9330),
(Email: lau_agent@mizuhogroup.com); and (iii) if to any other Lender, to it at
its address (or telecopy number) set forth in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through Electronic Systems, to the extent provided
in paragraph (b) below, shall be effective as provided in said paragraph (b).
Notices and other communications to the Lenders hereunder may be delivered or
furnished using Electronic Systems pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications. Unless the Administrative Agent otherwise prescribes, (i)
notices and other communications sent to an e-mail address shall be deemed
received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient, at its e-mail
address as described in the foregoing clause (i), of notification that such
notice or communication is available and identifying the website address
therefor; provided that, for both clauses (i) and (ii) above, if such notice,
email or other communication is not sent during the normal business hours of the
recipient, such notice or communication shall be deemed to have been sent at the
opening of business on the next Business Day for the recipient. Any party hereto
may change its address or telecopy number for notices and other communications
hereunder by notice to the other parties hereto. Electronic Systems. 64

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(i) The Borrower agrees that the Administrative Agent may, but shall not be
obligated to, make Communications (as defined below) available to the other
Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak,
ClearPar or a substantially similar Electronic System. (ii) Any Electronic
System used by the Administrative Agent is provided “as is” and “as available.”
The Agent Parties (as defined below) do not warrant the adequacy of such
Electronic Systems and expressly disclaim liability for errors or omissions in
the Communications. No warranty of any kind, express, implied or statutory,
including any warranty of merchantability, fitness for a particular purpose,
non-infringement of third-party rights or freedom from viruses or other code
defects, is made by any Agent Party in connection with the Communications or any
Electronic System. In no event shall the Administrative Agent or any of its
Related Parties (collectively, the “Agent Parties”) have any liability to the
Borrower, any Lender or any other Person or entity for damages of any kind,
including direct or indirect, special, incidental or consequential damages,
losses or expenses (whether in tort, contract or otherwise) arising out of any
Borrower’s or the Administrative Agent’s transmission of Communications through
an Electronic System. “Communications” means, collectively, any notice, demand,
communication, information, document or other material provided by or on behalf
the Borrower or any of its Affiliates pursuant to any Financing Document or the
transactions contemplated therein which is distributed by the Administrative
Agent, any Lender by means of electronic communications pursuant to this
Section, including through an Electronic System. SECTION 9.02. Waivers;
Amendments. (a) No failure or delay by the Administrative Agent or any Lender in
exercising any right or power hereunder or under any other Financing Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Lenders hereunder and under the other Financing
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender may have had
notice or knowledge of such Default at the time. Except as provided in Section
2.14(c) with respect to alternate rates of interest and in Section 2.20 with
respect to an Incremental Term Loan Amendment, neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Borrower and the Required
Lenders or by the Borrower and the Administrative Agent with the consent of the
Required Lenders; provided that no such agreement shall (i) increase or
reinstate the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender directly affected thereby, (iii) postpone the scheduled
date of payment of the principal amount of any Loan, or any interest thereon, or
any fees payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment, without
the written consent of each Lender directly affected thereby, (iv) change
Section 2.18(b) or (d) in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender, (v)
change any of the provisions of this Section or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any
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consent hereunder, or (vi) except as provided in clause (d) of this Section or
to any Security Document, release all of substantially all of the Collateral,
without the written consent of each Lender; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent. Notwithstanding the foregoing, no consent with respect to
any amendment, waiver or other modification of this Agreement shall be required
of any Defaulting Lender, except with respect to any amendment, waiver or other
modification referred to in clause (i), (ii) or (iii) of the first proviso of
this paragraph and then only in the event such Defaulting Lender shall be
directly affected by such amendment, waiver or other modification.
Notwithstanding the foregoing (but subject to the limitations set forth in
Sections 9.02(b)(i), 9.02(b)(ii) and 9.02(b)(iii)), this Agreement and any other
Financing Document may be amended (or amended and restated) with the written
consent of the Required Lenders, the Administrative Agent and the Borrower (x)
to add one or more credit facilities to this Agreement and to permit extensions
of credit from time to time outstanding thereunder and the accrued interest and
fees in respect thereof to share ratably in the benefits of this Agreement and
the other Financing Documents and the accrued interest and fees in respect
thereof and (y) to include appropriately the Lenders holding such credit
facilities in any determination of the Required Lenders and Lenders. The Lenders
hereby irrevocably authorize the Administrative Agent, at its option and in its
sole discretion, to release any Liens granted to the Administrative Agent by the
Borrower on any Collateral (i) upon the termination of all the Commitments,
payment and satisfaction in full in cash of all Secured Obligations (other than
Unliquidated Obligations), and the cash collateralization of all Unliquidated
Obligations in a manner satisfactory to the Administrative Agent, (ii)
constituting property being sold or disposed of if the Borrower certifies to the
Administrative Agent that the sale or disposition is made in compliance with the
terms of this Agreement (and the Administrative Agent may rely conclusively on
any such certificate, without further inquiry), (iii) constituting property
leased to the Borrower or any Subsidiary under a lease which has expired or been
terminated in a transaction permitted under this Agreement, or (iv) as required
to effect any sale or other disposition of such Collateral in connection with
any exercise of remedies of the Administrative Agent and the Lenders pursuant to
Article VII. Any such release shall not in any manner discharge, affect, or
impair the Obligations or any Liens (other than those expressly being released)
upon (or obligations of the Borrower in respect of) all interests retained by
the Borrower, including the proceeds of any sale, all of which shall continue to
constitute part of the Collateral. If, in connection with any proposed
amendment, waiver or consent requiring the consent of “each Lender” or “each
Lender directly affected thereby,” the consent of the Required Lenders is
obtained, but the consent of other necessary Lenders is not obtained (any such
Lender whose consent is necessary but not obtained being referred to herein as a
“Non-Consenting Lender”), then the Borrower may elect to replace a
Non-Consenting Lender as a Lender party to this Agreement, provided that,
concurrently with such replacement, (i) another bank or other entity which is
reasonably satisfactory to the Borrower and the Administrative Agent shall
agree, as of such date, to purchase for cash at par the Loans and other
Obligations due to the Non-Consenting Lender pursuant to an Assignment and
Assumption and to become a Lender for all purposes under this Agreement and to
assume all obligations of the Non-Consenting Lender to be terminated as of such
date and to comply with the requirements of clause (b) of Section 9.04, and (ii)
the Borrower shall pay to such Non-Consenting Lender in same day funds on the
day of such replacement (1) all interest, fees and other amounts then accrued
but unpaid to such Non-Consenting Lender by the Borrower hereunder to and
including the date of termination, including without limitation payments due to
such Non-Consenting Lender under Sections 2.15 and 2.17, and (2) an amount, if
any, equal to the payment which would have been due to such Lender on the day of
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such replacement under Section 2.16 had the Loans of such Non-Consenting Lender
been prepaid on such date rather than sold to the replacement Lender.
Notwithstanding anything to the contrary herein the Administrative Agent may,
with the consent of the Borrower only, amend, modify or supplement this
Agreement or any of the other Financing Documents to cure any ambiguity,
omission, mistake, defect or inconsistency. SECTION 9.03. Expenses; Indemnity;
Damage Waiver. (a) The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, in connection with the syndication and distribution (including, without
limitation, via the internet or through a service such as Intralinks) of the
credit facilities provided for herein, the preparation and administration of
this Agreement and the other Financing Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) and (ii) all
out-of-pocket expenses incurred by the Administrative Agent or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement and any other
Financing Document, including its rights under this Section, or in connection
with the Loans made hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans. The Borrower shall indemnify the Administrative Agent, each Lender, and
each Related Party of any of the foregoing Persons (each such Person being
called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities, penalties and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of any Financing Document
or any agreement or instrument contemplated thereby, the performance by the
parties hereto of their respective obligations thereunder or the consummation of
the Transactions or any other transactions contemplated hereby, (ii) any Loan or
the use of the proceeds therefrom, (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental Liability related in
any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether or not such claim, litigation, investigation or
proceeding is brought by the Borrower or any of its Affiliates or its or their
respective equity holders, Affiliates, creditors or any other third Person and
whether is based on contract, tort or any other theory, and regardless of
whether any Indemnitee is a party thereto; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities, penalties or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee or the material
breach in bad faith by any Indemnitee of its express obligations hereunder
pursuant to a claim initiated by Borrower. This Section 9.03(b) shall not apply
with respect to Taxes other than any Taxes that represent losses, claims or
damages arising from any non-Tax claim. To the extent that the Borrower fails to
pay any amount required to be paid by it to the Administrative Agent under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent, such Lender’s Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount (it being understood that the Borrower’s failure to pay any
such amount shall not relieve the Borrower of any default in the payment
thereof); provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
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To the extent permitted by applicable law, the Borrower shall not assert, and
hereby waives, any claim against any Indemnitee (i) except to the extent a court
of competent jurisdiction determines in a final and nonappealable judgment that
such damage is the result of such Indemnitiee’s gross negligence or willful
misconduct or the material breach in bad faith by any Indemnitee of its express
obligations hereunder pursuant to a claim initiated by the Borrower, for any
damages arising from the use by others of information or other materials
obtained through telecommunications, electronic or other information
transmission systems (including the Internet), or (ii) on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Financing Document or any agreement or instrument
contemplated hereby or thereby, the Transactions, any Loan or the use of the
proceeds thereof. All amounts due under this Section shall be payable not later
than fifteen (15) days after written demand therefor. SECTION 9.04. Successors
and Assigns. (a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that (i) the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void) and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section. Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants (to the
extent provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement. (b) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more Persons (other than an Ineligible
Institution) all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans at the time owing
to it) with the prior written consent (such consent not to be unreasonably
withheld or delayed) of: (A) the Borrower (provided that the Borrower shall be
deemed to have consented to any such assignment unless it shall object thereto
by written notice to the Administrative Agent within five (5) Business Days
after having received notice thereof); provided, further, that no consent of the
Borrower shall be required for an assignment to a Lender, an Affiliate of a
Lender, an Approved Fund or, if an Event of Default has occurred and is
continuing, any other assignee; and (B) the Administrative Agent; provided that
(x) no assignment to the Borrower or any Affiliate of the Borrower shall be
permitted and (y) any assignment made in violation of this proviso shall be void
ab initio. (i) Assignments shall be subject to the following additional
conditions: (A) except in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund or an assignment of the entire remaining amount
of the assigning Lender’s Commitment or Loans, the amount of the Commitment or
Loans of the assigning Lender subject to each such assignment (determined as of
the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000 unless
each of the Borrower and 68

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the Administrative Agent otherwise consent, provided that no such consent of the
Borrower shall be required if an Event of Default has occurred and is
continuing; (B) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement; (C) the parties to each assignment shall execute and deliver to
the Administrative Agent (x) an Assignment and Assumption or (y) to the extent
applicable, an agreement incorporating an Assignment and Assumption by reference
pursuant to a Platform as to which the Administrative Agent and the parties to
the Assignment and Assumption are participants, together with a processing and
recordation fee of $3,500, such fee to be paid by either the assigning Lender or
the assignee Lender or shared between such Lenders; (D) the assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire in which the assignee designates one or more credit
contacts to whom all syndicate-level information (which may contain material
non- public information about the Borrower and its Affiliates and their Related
Parties or their respective securities) will be made available and who may
receive such information in accordance with the assignee’s compliance procedures
and applicable laws, including Federal and state securities laws; and (E)
without the prior written consent of the Administrative Agent, no assignment
shall be made to a prospective assignee that bears a relationship to the
Borrower described in Section 108(e)(4) of the Code. For the purposes of this
Section 9.04(b), the terms “Approved Fund” and “Ineligible Institution” have the
following meanings: “Approved Fund” means any Person (other than a natural
person) that is engaged in making, purchasing, holding or investing in bank
loans and similar extensions of credit in the ordinary course of its business
and that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or manages
a Lender. “Ineligible Institution” means (a) a natural person, (b) a Defaulting
Lender or its Lender Parent, (c) the Borrower, any of its Subsidiaries or any of
its Affiliates, or (d) a company, investment vehicle or trust for, or owned and
operated for the primary benefit of, a natural person or relative(s) thereof.
(ii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
of this Section, from and after the effective date specified in each Assignment
and Assumption the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 9.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section. (iii) The Administrative Agent, acting for this purpose as a
non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy
of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount (and stated interest) of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
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error, and the Borrower, the Administrative Agent and the Lenders shall treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice. (iv) Upon its receipt of (x) a duly completed Assignment and
Assumption executed by an assigning Lender and an assignee or (y) to the extent
applicable, an agreement incorporating an Assignment and Assumption by reference
pursuant to a Platform as to which the Administrative Agent and the parties to
the Assignment and Assumption are participants, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register;
provided that if either the assigning Lender or the assignee shall have failed
to make any payment required to be made by it pursuant to 2.06(d) or (e),
2.07(b), 2.18(e) or 9.03(c), the Administrative Agent shall have no obligation
to accept such Assignment and Assumption and record the information therein in
the Register unless and until such payment shall have been made in full,
together with all accrued interest thereon. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph. (c) Any Lender may, without the consent of the
Borrower or the Administrative Agent, sell participations to one or more banks
or other entities (a “Participant”), other than an Ineligible Institution in all
or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender’s obligations under this Agreement shall remain
unchanged; (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations; and (C) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
The Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations
therein, including the requirements under Section 2.17(f) (it being understood
that the documentation required under Section 2.17(f) shall be delivered to the
participating Lender)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that such Participant (A) agrees to be subject to the provisions of
Sections 2.18 and 2.19 as if it were an assignee under paragraph (b) of this
Section; and (B) shall not be entitled to receive any greater payment under
Sections 2.15 or 2.17, with respect to any participation, than its participating
Lender would have been entitled to receive, except to the extent such
entitlement to receive a greater payment results from a Change in Law that
occurs after the Participant acquired the applicable participation. To the
extent permitted by law, each Participant also shall be entitled to the benefits
of Section 9.08 as though it were a Lender, provided such Participant agrees to
be subject to Section 2.18(d) as though it were a Lender. Each Lender that sells
a participation shall, acting solely for this purpose as a non- fiduciary agent
of the Borrower, maintain a register on which it enters the name and address of
each Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under this Agreement
(the “Participant Register”); provided that no Lender shall have any obligation
to disclose all or any portion of the Participant Register to any Person
(including the identity of any Participant or any information relating to a
Participant’s interest in any Commitments or Loans or its other obligations
under any Financing Document) except to the extent that such disclosure is
necessary to establish that such Commitment, Loan or other obligation is in
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5f.103-1(c) of the United States Treasury Regulations. The entries in the
Participant Register shall be conclusive absent demonstrable error, and such
Lender shall treat each person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary. For the avoidance of doubt, the
Administrative Agent (in its capacity as Administrative Agent) shall have no
responsibility for maintaining a Participant Register. (d) Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement to secure obligations of such Lender, including without
limitation any pledge or assignment to secure obligations to a Federal Reserve
Bank or any other central banking authority, and this Section shall not apply to
any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto. SECTION 9.05. Survival. All covenants, agreements,
representations and warranties made by the Borrower in the Financing Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Financing Document shall be considered
to have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Financing Documents and the making of any Loans,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement or any other Financing
Document is outstanding and unpaid and so long as the Commitments have not
terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the termination of the Commitments or the termination of this Agreement
or any other Financing Document or any provision hereof or thereof. SECTION
9.06. Counterparts; Integration; Effectiveness; Electronic Execution. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Financing Documents and any separate letter agreements with respect to
fees payable to the Administrative Agent constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy, e-mailed .pdf or any other
electronic means that reproduces an image of the actual executed signature page
shall be effective as delivery of a manually executed counterpart of this
Agreement. The words “execution,” “signed,” “signature,” “delivery,” and words
of like import in or relating to any document to be signed in connection with
this Agreement and the transactions contemplated hereby shall be deemed to
include Electronic Signatures, deliveries or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature, physical delivery thereof or
the use of a paper-based recordkeeping system, as the case may be, to the extent
and as provided for in any applicable law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act; provided that nothing herein shall require the
Administrative Agent to accept electronic signatures in any form or format
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SECTION 9.07. Severability. Any provision of any Financing Document held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction. SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final and in whatever currency denominated) at any time
held and other obligations at any time owing by such Lender or Affiliate to or
for the credit or the account of the Borrower against any of and all of the
Secured Obligations held by such Lender, irrespective of whether or not such
Lender shall have made any demand under the Financing Documents and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have. SECTION 9.09. Governing Law; Jurisdiction; Consent
to Service of Process. (a) This Agreement shall be construed in accordance with
and governed by the law of the State of New York. The Borrower hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in the Borough of Manhattan and of the United States District Court for the
Southern District of New York sitting in the Borough of Manhattan, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to any Financing Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Financing Document shall affect any right
that the Administrative Agent or any Lender may otherwise have to bring any
action or proceeding relating to this Agreement or any other Financing Document
against the Borrower or its properties in the courts of any jurisdiction. The
Borrower hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any other Financing Document in any court referred
to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court. Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Financing Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law. SECTION 9.10.
WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER FINANCING DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY 72

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HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION. SECTION 9.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement. SECTION 9.12. Confidentiality.
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested or required by any
Governmental Authority (including any self- regulatory authority, such as the
National Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies under this Agreement or any other Financing Document or any suit,
action or proceeding relating to this Agreement or any other Financing Document
or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to (i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (ii)any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (g) with the consent
of the Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent or any Lender on a nonconfidential basis
from a source other than the Borrower. For the purposes of this Section,
“Information” means all information received from the Borrower relating to the
Borrower or its business, other than any such information that is available to
the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower and other than information pertaining to this
Agreement routinely provided by arrangers to data service providers, including
league table providers, that serve the lending industry; provided that, in the
case of information received from the Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information. EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED
IN THE IMMEDIATELY PRECEDING PARAGRAPH FURNISHED TO IT PURSUANT TO THIS
AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWER
AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS
DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON- PUBLIC
INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN
ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING PROVINCIAL,
FEDERAL AND STATE SECURITIES LAWS. ALL INFORMATION, INCLUDING REQUESTS FOR
WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWER OR THE ADMINISTRATIVE AGENT
PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE
LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT 73

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THE BORROWER, ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY,
EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS
IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE
INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW. SECTION 9.13. USA PATRIOT Act.
Each Lender that is subject to the requirements of the Patriot Act hereby
notifies the Borrower that pursuant to the requirements of the Patriot Act, it
is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender to identify the Borrower in
accordance with the Patriot Act. SECTION 9.14. Appointment for Perfection. Each
Lender hereby appoints each other Lender as its agent for the purpose of
perfecting Liens, for the benefit of the Administrative Agent and the Secured
Parties, in assets which, in accordance with Article 9 of the UCC or any other
applicable law can be perfected only by possession or control. Should any Lender
(other than the Administrative Agent) obtain possession or control of any such
Collateral, such Lender shall notify the Administrative Agent thereof, and,
promptly upon the Administrative Agent’s request therefor shall deliver such
Collateral to the Administrative Agent or otherwise deal with such Collateral in
accordance with the Administrative Agent’s instructions. SECTION 9.15. Interest
Rate Limitation. Notwithstanding anything herein to the contrary, if at any time
the interest rate applicable to any Loan, together with all fees, charges and
other amounts which are treated as interest on such Loan under applicable law
(collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum
Rate”) which may be contracted for, charged, taken, received or reserved by the
Lender holding such Loan in accordance with applicable law, the rate of interest
payable in respect of such Loan hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful,
the interest and Charges that would have been payable in respect of such Loan
but were not payable as a result of the operation of this Section shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender. SECTION 9.16. No Advisory or Fiduciary Responsibility. In
connection with all aspects of each transaction contemplated hereby (including
in connection with any amendment, waiver or other modification hereof or of any
other Financing Document), the Borrower acknowledges and agrees that: (i) (A)
the arranging and other services regarding this Agreement provided by the
Lenders are arm’s-length commercial transactions between the Borrower and its
Affiliates, on the one hand, and each Credit Party and its Affiliates, on the
other hand, (B) the Borrower has consulted its own legal, accounting, regulatory
and tax advisors to the extent it has deemed appropriate, and (C) the Borrower
is capable of evaluating, and understands and accepts, the terms, risks and
conditions of the transactions contemplated hereby and by the other Financing
Documents; (ii) (A) each of the Credit Parties and their Affiliates is and has
been acting solely as a principal and, except as expressly agreed in writing by
the relevant parties, has not been, is not, and will not be acting as an
advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any
other Person and (B) no Credit Party or any of its Affiliates has any obligation
to the Borrower or any of its Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in
the other Financing Documents; and (iii) each of the Credit Parties and their
respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrower and its Affiliates, and
no Credit Party or any of its Affiliates has any 74

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obligation to disclose any of such interests to the Borrower or its Affiliates.
The Borrower hereby agrees that it will not assert any claim against any Credit
Party based on an alleged breach of agency or fiduciary duty in connection with
this Agreement or any aspect of any transaction contemplated hereby. SECTION
9.17. Acknowledgment and Consent to Bail-In of EEA Financial Institutions.
Notwithstanding anything to the contrary in any Financing Document or in any
other agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Financing Document may be subject to the Write- Down and Conversion
Powers of an EEA Resolution Authority and agrees and consents to, and
acknowledges and agrees to be bound by: the application of any Write-Down and
Conversion Powers by an EEA Resolution Authority to any such liabilities arising
hereunder which may be payable to it by any party hereto that is an EEA
Financial Institution; and the effects of any Bail-In Action on any such
liability, including, if applicable: (i) a reduction in full or in part or
cancellation of any such liability; (ii) a conversion of all, or a portion of,
such liability into shares or other instruments of ownership in such EEA
Financial Institution, its parent entity, or a bridge institution that may be
issued to it or otherwise conferred on it, and that such shares or other
instruments of ownership will be accepted by it in lieu of any rights with
respect to any such liability under this Agreement or any other Financing
Document; or (iii) the variation of the terms of such liability in connection
with the exercise of the Write-Down and Conversion Powers of any EEA Resolution
Authority. [Signature Pages Follow] 75

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SCHEDULE 2.01 COMMITMENTS Lender Commitment ($) Mizuho Bank, Ltd. $75,000,000
CoBank, ACB $70,000,000 U.S. Bank National Association $65,000,000 Aggregate
Commitments $210,000,000

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EXHIBIT A ASSIGNMENT AND ASSUMPTION This Assignment and Assumption (the
“Assignment and Assumption”) is dated as of the Effective Date set forth below
and is entered into by and between [Insert name of Assignor] (the “Assignor”)
and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not
defined herein shall have the meanings given to them in the Term Loan Agreement
identified below (as amended, the “Credit Agreement”), receipt of a copy of
which is hereby acknowledged by the Assignee. The Standard Terms and Conditions
set forth in Annex I attached hereto are hereby agreed to and incorporated
herein by reference and made a part of this Assignment and Assumption as if set
forth herein in full. For an agreed consideration, the Assignor hereby
irrevocably sells and assigns to the Assignee, and the Assignee hereby
irrevocably purchases and assumes from the Assignor, subject to and in
accordance with the Standard Terms and Conditions and the Credit Agreement, as
of the Effective Date inserted by the Administrative Agent as contemplated below
(i) all of the Assignor’s rights and obligations in its capacity as a Lender
under the Credit Agreement and any other documents or instruments delivered
pursuant thereto to the extent related to the amount and percentage interest
identified below of all of such outstanding rights and obligations of the
Assignor under the respective facilities identified below (including any
guarantees included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including contract claims, tort claims, malpractice claims, statutory
claims and all other claims at law or in equity related to the rights and
obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor. 1. Assignor: ______________________________ 2. Assignee: [and is an
Affiliate/Approved Fund of [identify Lender]1] 3. Borrower: Puget Energy, Inc.,
a Washington corporation 4. Administrative Agent: Mizuho Bank, Ltd., as the
administrative agent under the Credit Agreement 5. Credit Agreement: The Term
Loan Agreement dated as of September 26, 2019 among Puget Energy, Inc., the
Lenders parties thereto and Mizuho Bank, Ltd., as Administrative Agent 1 Select
as applicable.

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6. Assigned Interest: Percentage Assigned Aggregate Amount of Amount of of
Commitment/Loans for all Commitment/ Commitment/Loans Facility Assigned2 Lenders
Loans Assigned 3 $ $ % $ $ % $ $ % Effective Date: _____________ ___, 20___ [TO
BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF
RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.] The terms set forth in this
Assignment and Assumption are hereby agreed to: ASSIGNOR [NAME OF ASSIGNOR] By:
Title: ASSIGNEE [NAME OF ASSIGNEE] By: Title: 2 Fill in the appropriate
terminology for the types of facilities under the Term Loan Agreement that are
being assigned under this Assignment (e.g., “Commitment”, “Loan”, etc.). 3 Set
forth, so at least 9 decimals, as a percentage of the Commitment/Loans of all
Lenders thereunder. 2

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[Consented to and Accepted: MIZUHO BANK, LTD., as Administrative Agent By:
________________________________ Name: Title: ]1 1 To be added only if the
consent of the Administrative Agent is required by the terms of the Credit
Agreement. 2

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[Consented to: PUGET ENERGY, INC. By: ________________________________ Name:
Title: ]5 5 To be added only if the consent of the Borrower is required by the
terms of the Credit Agreement.

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ANNEX I STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION 1.
Representations and Warranties. 1.1 Assignor. The Assignor (a) represents and
warrants that (i) it is the legal and beneficial owner of the Assigned Interest,
(ii) the Assigned Interest is free and clear of any lien, encumbrance or other
adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document. 1.2.
Assignee. The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated hereby
and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Non-U.S. Lender,
attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender. (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender. 2. Payments. From
and after the Effective Date, the Administrative Agent shall make all payments
in respect of the Assigned Interest (including payments of principal, interest,
fees and other amounts) to the Assignor for amounts which have accrued to but
excluding the Effective Date and to the Assignee for amounts which have accrued
from and after the Effective Date. 3. General Provisions. This Assignment and
Assumption shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and assigns. This Assignment

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and Assumption may be executed in any number of counterparts, which together
shall constitute one instrument. Delivery of an executed counterpart of a
signature page of this Assignment and Assumption by telecopy shall be effective
as delivery of a manually executed counterpart of this Assignment and
Assumption. This Assignment and Assumption shall be governed by, and construed
in accordance with, the law of the State of New York.

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EXHIBIT B [FORM OF] BORROWING REQUEST [COMPANY NAME/HEADER] Date: [ ], 20[ ] To:
Mizuho Bank, Ltd., as Administrative Agent 1800 Plaza Ten, Harborside Financial
Center Jersey City, NJ 07311 Attention of Joyce Raynor Telephone No. (201)
626-9330) Email: lau_agent@mizuhogroup.com Ladies and Gentlemen: This Borrowing
Request is furnished pursuant to Section 2.03 of that certain Term Loan
Agreement, dated as of September 26, 2019 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the “Term Loan
Agreement”), among Puget Energy, Inc., (the “Borrower”), the Lenders from time
to time party thereto and Mizuho Bank, Ltd., as Administrative Agent. Unless
otherwise defined herein, capitalized terms used in this Borrowing Request have
the meanings ascribed thereto in the Term Loan Agreement. The Borrower
represents that, as of this date, the conditions precedent set forth in Section
4.02 are satisfied. The Borrower hereby notifies the Administrative Agent of its
request for the following Borrowing: 1. Aggregate Amount of the Borrowing6:
$_________________. 2. Borrowing Date of the Borrowing (must be a Business Day):
____________. 3. The Borrowing shall be a ___ ABR Borrowing or ___ Eurodollar
Borrowing. 7 4. If a Eurodollar Borrowing, the duration of Interest Period8: One
Week _________ One Month __________ Two Months __________ Three Months_________
6 Must comply with Section 2.02(c) of the Agreement 7 If no election is made,
then the requested Borrowing shall be an ABR Borrowing 8 Shall be subject to the
definition of “Interest Period.” Cannot extend beyond the Maturity Date. If an
Interest Period is not specified, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

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Six Months__________ 5. Location and number of the Borrower’s account or any
other account agreed upon by the Administrative Agent and the Borrower to which
proceeds of Borrowing are to be disbursed: [_________________].

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PUGET ENERGY, INC. By: Name: Title:

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EXHIBIT C FORM OF INCREASING LENDER SUPPLEMENT INCREASING LENDER SUPPLEMENT,
dated __________, 20___ (this “Supplement”), by and among each of the
signatories hereto, to the Term Loan Agreement, dated as of September 26, 2019
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Puget Energy, Inc. (the “Borrower”), the Lenders
party thereto and Mizuho Bank, Ltd., as administrative agent (in such capacity,
the “Administrative Agent”). W I T N E S S E T H WHEREAS, pursuant to Section
2.20 of the Credit Agreement, the Borrower has the right, subject to the terms
and conditions thereof, to from time to time request Incremental Term Loans
under the Credit Agreement by requesting one or more Lenders to participate in
such a tranche; WHEREAS, the Borrower has given notice to the Administrative
Agent of its intention to request Incremental Term Loans pursuant to such
Section 2.20; and WHEREAS, pursuant to Section 2.20 of the Credit Agreement, the
undersigned Increasing Lender now desires to increase the amount of its Loan
under the Credit Agreement by executing and delivering to the Borrower and the
Administrative Agent this Supplement; NOW, THEREFORE, each of the parties hereto
hereby agrees as follows: 1. The undersigned Increasing Lender agrees, subject
to the terms and conditions of the Credit Agreement, that on the date of this
Supplement it shall have its Loan increased by $[__________], thereby making the
aggregate amount of its total Loan equal to $[__________]. 2. The Borrower
hereby represents and warrants that no Default or Event of Default has occurred
and is continuing on and as of the date hereof. 3. Terms defined in the Credit
Agreement shall have their defined meanings when used herein. 4. This Supplement
shall be governed by, and construed in accordance with, the laws of the State of
New York. 5. This Supplement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same document. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT
BLANK]

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IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written. [INSERT NAME OF INCREASING LENDER]
By:____________________________________ Name: Title: Accepted and agreed to as
of the date first written above: PUGET ENERGY, INC.
By:______________________________________ Name: Title: Acknowledged as of the
date first written above: MIZUHO BANK, LTD., as Administrative Agent
By:______________________________________ Name: Title: 2

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EXHIBIT D FORM OF AUGMENTING LENDER SUPPLEMENT AUGMENTING LENDER SUPPLEMENT,
dated __________, 20___ (this “Supplement”), to the Term Loan Agreement, dated
as of September 26, 2019 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Puget Energy, Inc.
(the “Borrower”), the Lenders party thereto and Mizuho Bank, Ltd., as
administrative agent (in such capacity, the “Administrative Agent”). W I T N E S
S E T H WHEREAS, the Credit Agreement provides in Section 2.20 thereof that any
bank, financial institution or other entity may extend Loans under the Credit
Agreement subject to the approval of the Borrower and the Administrative Agent,
by executing and delivering to the Borrower and the Administrative Agent a
supplement to the Credit Agreement in substantially the form of this Supplement;
and WHEREAS, the undersigned Augmenting Lender was not an original party to the
Credit Agreement but now desires to become a party thereto; NOW, THEREFORE, each
of the parties hereto hereby agrees as follows: 1. The undersigned Augmenting
Lender agrees to be bound by the provisions of the Credit Agreement and agrees
that it shall, on the date of this Supplement, become a Lender for all purposes
of the Credit Agreement to the same extent as if originally a party thereto,
with a Loan of $[__________]. 2. The undersigned Augmenting Lender (a)
represents and warrants that it is legally authorized to enter into this
Supplement; (b) confirms that it has received a copy of the Credit Agreement,
together with copies of the most recent financial statements delivered pursuant
to Section 5.01 thereof, as applicable, and has reviewed such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Supplement; (c) agrees that it will, independently
and without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement or any other instrument or document furnished pursuant
hereto or thereto; (d) appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Credit Agreement or any other instrument or document furnished
pursuant hereto or thereto as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are incidental thereto; and (e)
agrees that it will be bound by the provisions of the Credit Agreement and will
perform in accordance with its terms all the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Lender. 3. The
undersigned’s address for notices for the purposes of the Credit Agreement is as
follows: [___________] [___________] [___________] 4. The Borrower hereby
represents and warrants that no Default or Event of Default has occurred and is
continuing on and as of the date hereof.

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5. Terms defined in the Credit Agreement shall have their defined meanings when
used herein. 6. This Supplement shall be governed by, and construed in
accordance with, the laws of the State of New York. 7. This Supplement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
document. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 2

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IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written. [INSERT NAME OF AUGMENTING LENDER] By: Name: Title: Accepted and agreed
to as of the date first written above: PUGET ENERGY, INC.
By:_____________________________________ Name: Title: Acknowledged as of the
date first written above: MIZUHO BANK, LTD., as Administrative Agent
By:_____________________________________ Name: Title: 3

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EXHIBIT E LIST OF CLOSING DOCUMENTS PUGET ENERGY, INC. TERM LOAN AGREEMENT
September 26, 2019 LIST OF CLOSING DOCUMENTS1 A. LOAN DOCUMENTS 1. Term Loan
Agreement (the “Credit Agreement”) by and among Puget Energy, Inc., a Washington
corporation (the “Borrower”), the institutions from time to time parties thereto
as Lenders (the “Lenders”) and Mizuho Bank, Ltd., in its capacity as
Administrative Agent for itself and the other Lenders (the “Administrative
Agent”), evidencing a term loan agreement to the Borrower from the Lenders in an
initial aggregate principal amount of $210,000,000. SCHEDULES Schedule 1.01(a) –
Existing Indebtedness Schedule 1.01(b) – Permitted Holders Schedule 2.01 –
Commitments Schedule 3.04 – Regulatory Approvals Schedule 3.13(a) – Subsidiaries
Schedule 3.13(b) – Subsidiaries’ Jurisdictions of Organization Schedule 3.14 –
Existing Dividend Restrictions Schedule 3.15 – Litigation Schedule 3.19 –
Environmental Matters Schedule 3.21 – Affiliate Transactions Schedule 5.07 –
Properties and Assets Schedule 6.01(b) – Existing Liens Schedule 6.03(l) –
Investments EXHIBITS Exhibit A – Form of Assignment and Assumption Exhibit B –
Form of Borrowing Request Exhibit C – Form of Increasing Lender Supplement
Exhibit D – Form of Augmenting Lender Supplement Exhibit E – List of Closing
Documents Exhibit F – Form of Term Note Exhibit G-1 – Form of U.S. Tax
Certificate (Non-U.S. Lenders That Are Not Partnerships) Exhibit G-2 – Form of
U.S. Tax Certificate (Non-U.S. Lenders That Are Partnerships) 1 Each capitalized
term used herein and not defined herein shall have the meaning assigned to such
term in the above-defined Credit Agreement. Items appearing in bold and italics
shall be prepared and/or provided by the Borrower and/or Borrower’s counsel.

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Exhibit G-3 – Form of U.S. Tax Certificate (Non-U.S. Participants That Are Not
Partnerships) Exhibit G-4 – Form of U.S. Tax Certificate (Non-U.S. Participants
That Are Partnerships) Exhibit H – Collateral Agency Agreement Exhibit I – Form
of Interest Election Request Exhibit J – Form of Solvency Certificate Exhibit K
– Pledge Agreement Exhibit L – Security Agreement Exhibit M – Terms of
Subordination Exhibit N – Form of Prepayment Notice 2. Reaffirmation Agreement,
executed by the Borrower and Puget Equico LLC in favor of JPMorgan Chase Bank,
N.A., as Collateral Agent (the “Collateral Agent”). 3. Notes, if any, executed
by the Borrower in favor of each of the Lenders, if any, which has requested a
note pursuant to Section 2.10(e) of the Credit Agreement. 4. i. Copy of Amended
and Restated Pledge Agreement between Puget Equico LLC (“Equico”) and JPMorgan
Chase Bank, N.A., as successor Collateral Agent, together with copies of the
applicable pledged securities. ii. Copy of Amendment No. 1 to Amended and
Restated Pledge Agreement. 5. i. Copy of Amended and Restated Borrower Security
Agreement between the Borrower and the Collateral Agent, together with copies of
the applicable pledged securities. ii. Copy of Amendment No. 1 to Amended and
Restated Borrower Security Agreement. 6. i. Amended and Restated Collateral
Agency Agreement by and among the Borrower, Equico, the Administrative Agent and
the other parties thereto, together with Amendment No. 1 to Amended and Restated
Collateral Agency Agreement. ii. Joinder Agreement to that certain Amended and
Restated Collateral Agency Agreement, dated as of the date hereof, executed by
the Administrative Agent. B. CORPORATE DOCUMENTS 7. Certificate of the Secretary
or an Assistant Secretary of the Borrower in his or her capacity as such officer
certifying (i) that there have been no changes in the Articles of Incorporation
of the Borrower, as attached thereto and as certified as of a recent date by the
Secretary of State (or analogous governmental entity) of the State of
Washington, since the date of the certification thereof by such governmental
entity, (ii) the By-Laws, as attached thereto, of the Borrower as in effect on
the date of such certification, (iii) resolutions of the board of directors of
the Borrower authorizing the execution, delivery and performance of each Loan
Document and (iv) the names and true signatures of the incumbent officers of the
Borrower authorized to sign the Loan Documents and authorized to request a
Borrowing under the Credit Agreement. 8. Certificate of Existence for the
Borrower from the Secretary of State of the State of Washington. 2

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C. OPINION 9. Opinion of Perkins Coie, counsel for the Borrower. D. UCC
DOCUMENTATION 10. UCC, tax lien and name variation search reports with respect
to the Borrower and Equico from the appropriate offices in the State of
Washington. E. CLOSING CERTIFICATES AND MISCELLANEOUS 11. A Certificate signed
by the President, a Vice President or a Financial Officer of the Borrower in his
or her capacity as such officer certifying the following: (i) all of the
representations and warranties of the Borrower set forth in the Credit Agreement
are true and correct and (ii) no Default or Event of Default has occurred and is
then continuing. 3

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EXHIBIT F FORM OF TERM LOAN NOTE NOTE $______________ [DATE] FOR VALUE RECEIVED,
the undersigned, PUGET ENERGY, INC., a Washington corporation (the “Borrower”),
HEREBY UNCONDITIONALLY PROMISES TO PAY to the order of [LENDER NAME] (the
“Lender”) the aggregate unpaid principal amount of all Loans made by the Lender
to the Borrower pursuant to the “Term Loan Agreement” (as defined below) on the
Maturity Date or on such earlier date as may be required by the terms of the
Term Loan Agreement. Capitalized terms used herein and not otherwise defined
herein are as defined in the Term Loan Agreement. The undersigned Borrower
promises to pay interest on the unpaid principal amount of each Loan made to it
from the date of such Loan until such principal amount is paid in full at a rate
or rates per annum determined in accordance with the terms of the Term Loan
Agreement. Interest hereunder is due and payable at such times and on such dates
as set forth in the Term Loan Agreement. At the time of each Loan, and upon each
payment or prepayment of principal of each Loan, the Lender shall make a
notation either on the schedule attached hereto and made a part hereof, or in
such Lender’s own books and records, in each case specifying the amount of such
Loan, the respective Interest Period thereof (in the case of Eurodollar Loans)
or the amount of principal paid or prepaid with respect to such Loan, as
applicable; provided that the failure of the Lender to make any such recordation
or notation shall not affect the Obligations of the undersigned Borrower
hereunder or under the Term Loan Agreement. This Note is one of the notes
referred to in, and is entitled to the benefits of, that certain Term Loan
Agreement dated as of September 26, 2019 by and among the Borrower, the
financial institutions from time to time parties thereto as Lenders and Mizuho
Bank, Ltd., as Administrative Agent (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “Term Loan
Agreement”). The Term Loan Agreement, among other things, (i) provides for the
making of Loans by the Lender to the undersigned Borrower [or, as applicable,
Incremental Term Loans] in an aggregate amount not to exceed at any time
outstanding such Lender’s Commitment, the indebtedness of the undersigned
Borrower resulting from each such Loan to it being evidenced by this Note, and
(ii) contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments of the principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified. Demand, presentment, protest and notice of nonpayment and protest are
hereby waived by the Borrower. Whenever in this Note reference is made to the
Administrative Agent, the Lender or the Borrower, such reference shall be deemed
to include, as applicable, a reference to their respective successors and
assigns. The provisions of this Note shall be binding upon and shall inure to
the benefit of said successors and assigns. The Borrower’s successors and
assigns shall include, without limitation, a receiver, trustee or debtor in
possession of or for the Borrower. This Note shall be construed in accordance
with and governed by the law of the State of New York. [REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

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PUGET ENERGY, INC. By: Name: Title: Signature Page to Note

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SCHEDULE OF LOANS AND PAYMENTS OR PREPAYMENTS Amount of Principal Unpaid Amount
of Interest Paid or Principal Notation Date Loan Period/Rate Prepaid Balance
Made By

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EXHIBIT G-1 FORM OF U.S. TAX CERTIFICATE (For Non-U.S. Lenders That Are Not
Partnerships For U.S. federal Income Tax Purposes) Reference is hereby made to
the Term Loan Agreement dated as of September 26, 2019 (as amended, supplemented
or otherwise modified from time to time, the “Credit Agreement”), among Puget
Energy, Inc. (the “Borrower”), the Lenders party thereto and Mizuho Bank, Ltd.,
as administrative agent (in such capacity, the “Administrative Agent”). Pursuant
to the provisions of Section 2.17 of the Credit Agreement, the undersigned
hereby certifies that (i) it is the sole record and beneficial owner of the
Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it
is providing this certificate, (ii) it is not a bank within the meaning of
Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of
the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is
not a controlled foreign corporation related to the Borrower as described in
Section 881(c)(3)(C) of the Code and (v) the interest payments in question are
not effectively connected with the undersigned’s conduct of a U.S. trade or
business. The undersigned has furnished the Administrative Agent and the
Borrower with a certificate of its non-U.S. person status on IRS Form W-8BEN or
W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform the Borrower and the Administrative Agent and (2) the undersigned
shall have at all times furnished the Borrower and the Administrative Agent with
a properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments. Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement. [NAME OF LENDER]
By:______________________________________ Name: Title: Date: __________, 20[__]

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EXHIBIT G-2 FORM OF U.S. TAX CERTIFICATE (For Non-U.S. Lenders That Are
Partnerships For U.S. federal Income Tax Purposes) Reference is hereby made to
the Term Loan Agreement dated as of September 26, 2019 (as amended, supplemented
or otherwise modified from time to time, the “Credit Agreement”), among Puget
Energy, Inc. (the “Borrower”), the Lenders party thereto and Mizuho Bank, Ltd.,
as administrative agent (in such capacity, the “Administrative Agent”). Pursuant
to the provisions of Section 2.17 of the Credit Agreement, the undersigned
hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as
any Note(s) evidencing such Loan(s)) in respect of which it is providing this
certificate, (ii) its partners/members are the sole beneficial owners of such
Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to
the extension of credit pursuant to this Credit Agreement, neither the
undersigned nor any of its partners/members is a bank extending credit pursuant
to a loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its
partners/members is a ten percent shareholder of the Borrower within the meaning
of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a
controlled foreign corporation related to the Borrower as described in Section
881(c)(3)(C) of the Code, and (vi) the interest payments in question are not
effectively connected with the undersigned’s or its partners/members’ conduct of
a U.S. trade or business. The undersigned has furnished the Administrative Agent
and the Borrower with IRS Form W- 8IMY accompanied by an IRS Form W-8BEN or
W-8BEN-E from each of its partners/members claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform the Borrower and the Administrative Agent and (2) the undersigned
shall have at all times furnished the Borrower and the Administrative Agent with
a properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments. Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement. [NAME OF LENDER]
By:______________________________________ Name: Title: Date: ________ __, 20[__]

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EXHIBIT G-3 FORM OF U.S. TAX CERTIFICATE (For Non-U.S. Participants That Are Not
Partnerships For U.S. federal Income Tax Purposes) Reference is hereby made to
the Term Loan Agreement dated as of September 26, 2019 (as amended, supplemented
or otherwise modified from time to time, the “Credit Agreement”), among Puget
Energy, Inc. (the “Borrower”), the Lenders party thereto and Mizuho Bank, Ltd.,
as administrative agent (in such capacity, the “Administrative Agent”). Pursuant
to the provisions of Section 2.17 of the Credit Agreement, the undersigned
hereby certifies that (i) it is the sole record and beneficial owner of the
participation in respect of which it is providing this certificate, (ii) it is
not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is
not a ten percent shareholder of the Borrower within the meaning of Section
871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation
related to the Borrower as described in Section 881(c)(3)(C) of the Code, and
(v) the interest payments in question are not effectively connected with the
undersigned’s conduct of a U.S. trade or business. The undersigned has furnished
its participating Lender with a certificate of its non- U.S. person status on
IRS Form W-8BEN or W-8BEN-E. By executing this certificate, the undersigned
agrees that (1) if the information provided on this certificate changes, the
undersigned shall promptly so inform such Lender in writing and (2) the
undersigned shall have at all times furnished such Lender with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either of the two
calendar years preceding such payments. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement. [NAME OF LENDER]
By:______________________________________ Name: Title: Date: ________ __, 20[__]

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EXHIBIT G-4 FORM OF U.S. TAX CERTIFICATE (For Non-U.S. Participants That Are
Partnerships For U.S. federal Income Tax Purposes) Reference is hereby made to
the Term Loan Agreement dated as of September 26, 2019 (as amended, supplemented
or otherwise modified from time to time, the “Credit Agreement”), among Puget
Energy, Inc. (the “Borrower”), the Lenders party thereto and Mizuho Bank, Ltd.,
as administrative agent (in such capacity, the “Administrative Agent”). Pursuant
to the provisions of Section 2.17 of the Credit Agreement, the undersigned
hereby certifies that (i) it is the sole record owner of the participation in
respect of which it is providing this certificate, (ii) its partners/members are
the sole beneficial owners of such participation, (iii) with respect such
participation, neither the undersigned nor any of its partners/members is a bank
extending credit pursuant to a loan agreement entered into in the ordinary
course of its trade or business within the meaning of Section 881(c)(3)(A) of
the Code, (iv) none of its partners/members is a ten percent shareholder of the
Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its
partners/members is a controlled foreign corporation related to the Borrower as
described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in
question are not effectively connected with the undersigned’s or its
partners/members’ conduct of a U.S. trade or business. The undersigned has
furnished its participating Lender with IRS Form W-8IMY accompanied by an IRS
Form W-8BEN or W-8BEN-E from each of its partners/members claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform such Lender and (2) the undersigned shall have at all
times furnished such Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement. [NAME OF
PARTICIPANT] By:______________________________________ Name: Title: Date:
________ __, 20[__]

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EXHIBIT H COLLATERAL AGENCY AGREEMENT [ATTACHED]

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EXECUTION COPY AMENDED AND RESTATED COLLATERAL AGENCY AGREEMENT Dated as of
February 6, 2009 as amended and restated as of March 31, 2010 among PUGET ENERGY
INC., as the Borrower PUGET EQUICO LLC, as the Parent BARCLAYS BANK PLC, as the
Collateral Agent, BARCLAYS BANK PLC, as the Facility Agent and AUTHORIZED
REPRESENTATIVES from time to time party hereto NYDOCS01/1212479.10 Puget-
Amended and Restated Collateral Agency Agreement 07771-0276/LEGAL16959722.4
5/4/10

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TABLE OF CONTENTS Page Article 1. Definitions and Interpretation
...................................................................................................
2 Section 1.01. Principles of Interpretation
........................................................................................
2 Section 1.02. Definitions
.................................................................................................................
2 Article 2. Appointment and Duties of Collateral Agent; Secured Parties'
Agreements; Collateral Matters
......................................................................................................................................
11 Section 2.01. Appointment and Duties of Collateral Agent
........................................................... 11 Section 2.02.
Secured Parties' Agreements; No Interference; Payment Over
................................ 11 Section 2.03. Possessory Collateral Agent as
Gratuitous Bailee for Perfection ............................ 12 Section 2.04.
Collateral Matters; Actions with Respect to Collateral; Prohibition on
Contesting Liens
.......................................................................................................
13 Section 2.05. Absolute Rights of Secured Parties and Authorized
Representatives ...................... 14 Section 2.06. Refinancings of Credit
Agreement and Additional Credit Documents .................... 15 Section 2.07.
Release of Liens on Collateral
.................................................................................
16 Article 3. Decision Making; Voting; Notice and Procedures
.................................................................. 16 Section
3.01. Decision Making
......................................................................................................
16 Section 3.02. Voting Generally
......................................................................................................
16 Section 3.03. Intercreditor Votes: Each Party's Entitlement to Vote
............................................ 17 Section 3.04. Intercreditor
Votes: Votes Allocated to Each Party
................................................ 17 Section 3.05. [Reserved]
................................................................................................................
18 Section 3.06. Exercise of Discretion With Respect to Intercreditor Aspects of
the Credit Documents
..............................................................................................
18 Section 3.07. Certain Modifications by the Secured Parties
.......................................................... 18 Section 3.08.
Effect of Amendment on Collateral Agent
.............................................................. 19 Section 3.09.
Notification of Matters
.............................................................................................
19 Section 3.10. Notice of Amounts Owed
.........................................................................................
19 NYDOCS01/1212479.10 i Puget- Amended and Restated Collateral Agency Agreement
07771-0276/LEGAL16959722.4 5/4/10

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Article 4. Default; Remedies
...................................................................................................................
19 Section 4.01. Notice of Defaults
....................................................................................................
19 Section 4.02. Acceleration; Termination
.......................................................................................
20 Section 4.03. Instructions Upon Event of Default
......................................................................... 20
Section 4.04. Remedies
................................................................................................................
21 Section 4.05. Distribution of Collateral Proceeds
.......................................................................... 21
Section 4.06. Sharing
................................................................................................................
22 Section 4.07. Insolvency or Liquidation Proceedings
.................................................................... 22 Article
5. Rights of Collateral Agent
.......................................................................................................
23 Section 5.01. 23 Article 6. Resignation or Removal of the Collateral Agent
.................................................................... 26 Article
7. No Impairments of Other Rights
.............................................................................................
26 Article 8. Termination
.............................................................................................................................
26 Article 9. Miscellaneous
..........................................................................................................................
26 Section 9.01. Waiver
................................................................................................................
26 Section 9.02. Notices
................................................................................................................
27 Section 9.03. Amendments, Etc.
....................................................................................................
28 Section 9.04. Successors and Assigns
............................................................................................
28 Section 9.05. Survival
................................................................................................................
28 Section 9.06. Severability
..............................................................................................................
29 Section 9.07. Counterparts
.............................................................................................................
29 Section 9.08. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
....................................................................................................
29 Section 9.09. Joinder
................................................................................................................
29 Section 9.10. Specific Performance
...............................................................................................
30 Section 9.11. Agreement for Benefit of Parties Hereto
.................................................................. 30 Section
9.12. Integration
................................................................................................................
30 NYDOCS01/1212479.10 ii Puget- Amended and Restated Collateral Agency
Agreement 07771-0276/LEGAL16959722.4 5/4/10

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APPENDIX A Form of Joinder Agreement NYDOCS01/1212479.10 iii Puget- Amended and
Restated Collateral Agency Agreement 07771-0276/LEGAL16959722.4 5/4/10

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AMENDED AND RESTATED COLLATERAL AGENCY AGREEMENT This AMENDED AND RESTATED
COLLATERAL AGENCY AGREEMENT (this “Agreement”), dated as of February 6, 2009, as
amended and restated as of March 31, 2010, among PUGET ENERGY INC., a Washington
corporation (the “Company”) (successor in interest by merger to Puget Merger Sub
Inc. (“Merger Sub”), PUGET EQUICO LLC, a Washington limited liability company
(the “Parent”), BARCLAYS BANK PLC, as facility agent under the Credit Agreement
(as defined below) (in such capacity, together with any successor facility agent
appointed pursuant to the Credit Agreement, the “Facility Agent”), BARCLAYS BANK
PLC as collateral agent for the Secured Parties (in such capacity, together with
its successors and assigns, the “Collateral Agent”), each Interest Rate Hedge
Bank and each additional Authorized Representative from time to time party
hereto for the Additional Secured Parties with respect to which it is acting in
such capacity. Certain capitalized terms used herein are defined in Article 1 of
this Agreement. W I T N E S S E T H : WHEREAS, the Merger Sub entered into a
Credit Agreement dated as of February 6, 2009 (said Agreement, as amended,
amended and restated, supplemented or otherwise modified from time to time,
being the “Credit Agreement”) with the Facility Agent, the Lenders and the other
parties thereto; WHEREAS, the Company, upon the consummation of the Merger,
assumed, pursuant to the Assumption Agreement, all of the obligations of the
Merger Sub under the Credit Agreement, this Agreement and all of the other
Financing Documents to which the Merger Sub was a party; the Merger Sub (prior
to the Effective Time) and the Company (upon and after the Effective Time) are
referred to herein as the “Borrower”; WHEREAS, each of the Interest Rate Hedge
Banks has entered into or shall enter into after the date hereof an Interest
Hedging Agreement with the Borrower pursuant to which the Interest Rate Hedge
Banks will provide certain protection against movements in interest rates on the
terms and subject to the conditions set forth therein; WHEREAS, the Borrower may
from time to time issue or enter into one or more notes, indentures, promissory
notes, credit agreements or such other credit documents, the obligations under
which may be secured by a first priority lien on the Collateral to the extent
permitted under the Credit Documents; and WHEREAS, the Facility Agent, as
Authorized Representative for the Lenders under the Credit Agreement, the
Interest Rate Hedge Banks and the other Authorized Representatives for the
Additional Secured Parties wish to appoint the Collateral Agent to act on their
behalf in accordance with the provisions of the Security Documents and the terms
hereof. NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto hereby agree as
follows: NYDOCS01/1212479.10 S-1 Puget- Amended and Restated Collateral Agency
Agreement 07771-0276/LEGAL16959722.4 5/4/10

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Article 1. Definitions and Interpretation. Section 1.01. Principles of
Interpretation. With reference to this Agreement, unless otherwise specified
herein or in such other Security Document: (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms. (b)
The words “herein”, “hereto”, “hereof” and “hereunder” and words of similar
import when used herein shall refer to this Agreement as a whole and not to any
particular provision thereof. (i) Article, Section, Exhibit and Schedule
references are to this Agreement unless specified to the contrary. (ii) The term
“including” is by way of example and not limitation. (iii) The term “documents”
includes any and all instruments, documents, agreements, certificates, notices,
reports, financial statements and other writings, however evidenced, whether in
physical or electronic form. (c) In the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including”; the words “to” and “until” each mean “to but excluding”; and the
word “through” means “to and including”. (d) Section headings herein are
included for convenience of reference only and shall not affect the
interpretation of this Agreement. Section 1.02. Definitions. In addition, the
following terms shall have the following meanings under this Agreement:
“Additional Credit Documents” shall mean any indenture, note, promissory note,
instrument or other agreement entered into by the Borrower after the date of
this Agreement, if any, pursuant to which the Borrower will incur Additional
Secured Obligations from time to time, to the extent permitted under the Credit
Documents, and which have been designated as Additional Credit Documents in
accordance with Section 9.09(b) of this Agreement. “Additional Secured
Obligations” shall mean any indebtedness and obligations of the Borrower arising
under any Additional Credit Document that the Borrower designates as Additional
Secured Obligations in accordance with Section 9.09(b) of this Agreement, in
each case to the extent permitted (if addressed therein, or, otherwise, not
prohibited) under the Credit Agreement and the other Credit Documents as of the
date of such designation; provided that the holder of such indebtedness or other
obligations (or the agent, trustee or representative acting on behalf of the
holder of such indebtedness or other obligation) shall either be a party hereto
or shall have executed and delivered to the Collateral Agent a Joinder Agreement
pursuant to which such holder (or such agent, trustee or representative acting
on behalf of such holder) has become a party to this Agreement and has agreed to
be bound by the obligations of a “Secured Party” under the terms of this
Agreement. Subject to meeting the requirements of the preceding sentence,
Additional Secured Obligations shall include (a) advances to, and debts,
liabilities, obligations, covenants and duties of the Borrower arising under any
Additional Credit Documents, whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to NYDOCS01/1212479.10
S-2 Puget- Amended and Restated Collateral Agency Agreement
07771-0276/LEGAL16959722.4 5/4/10

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become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against the Borrower, of any proceeding
under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding, (b) the obligation to pay principal, interest, reimbursement
obligations, charges, expenses, fees, Attorney Costs, indemnities and other
amounts payable by the Borrower under any Additional Credit Document and (c) the
obligation of the Borrower to reimburse any amount in respect of any of the
foregoing that any Additional Secured Party, in its sole discretion, may elect
to pay or advance on behalf of the Borrower. “Additional Secured Parties” means
any holders of any Additional Secured Obligations and any Authorized
Representative with respect thereto. “Affiliate” means, with respect to any
Person, another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
Person specified. “Agent” shall mean the Collateral Agent, each Authorized
Representative and each of their respective successors and assigns.
“Agent-Related Persons” shall mean the Agents, together with their respective
Affiliates, and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates. “Attorney Costs” shall mean and include, as the
context requires, all reasonable and documented fees, expenses and disbursements
of any external legal counsel. “Authorized Representative” shall mean (a) in the
case of any Credit Agreement Obligations or the Lenders under the Credit
Agreement, the Facility Agent, (b) in the case of any Secured Hedge Obligations
and the Interest Rate Hedge Banks, such Interest Rate Hedge Bank or any Person
appointed by such Interest Rate Hedge Bank to act as its agent or representative
and (c) in the case of any Series of Additional Secured Obligations or
Additional Secured Parties that become subject to this Agreement after the date
hereof, the Authorized Representative named for such Series in the applicable
Joinder Agreement. “Bankruptcy Code” shall mean Title 11 of the United States
Code, as amended. “Borrower Group” shall mean the Borrower and the Operating
Companies and “Borrower Group Member” means any of the Borrower or any Operating
Company. “Borrower Side Person” has the meaning specified in Section 9.03(b).
“Business Day” shall mean any day which is neither a Saturday or Sunday nor a
legal holiday on which any financial institution or banks are authorized or
required to be closed in New York, New York or Bellevue, Washington. “Cash
Management Obligations” means obligations owed by any Borrower Group Member to
any Lender or any Affiliate of a Lender in respect of any overdraft and related
liabilities arising from treasury, depository and cash management services or
any automated clearing house transfers of funds. “Collateral” shall mean all the
“Collateral”, as defined in each of the Security Documents. NYDOCS01/1212479.10
S-3 Puget- Amended and Restated Collateral Agency Agreement
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“Commitments” shall have the meaning specified in the Credit Agreement.
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controls”, “Controlling” and “Controlled” have meanings correlative thereto.
“Controlling Authorized Representative” shall mean (a) until the earlier to
occur of (i) the Discharge of Credit Agreement Obligations and (ii) the
occurrence of the Majority Non- Controlling Voting Party Enforcement Date (if
any), the Facility Agent and (b) from and after the earlier to occur of (i)
Discharge of Credit Agreement Obligations and (ii) the occurrence of the
Majority Non-Controlling Voting Party Enforcement Date, the Authorized
Representative for the Majority Non-Controlling Voting Parties at such time.
“Credit Agreement” has the meaning specified in the first recital hereto.
“Credit Agreement Obligations” shall mean all (a) advances to, and debts,
liabilities, obligations, covenants and duties of the Borrower arising under any
Financing Document or otherwise with respect to any Loan, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against the Borrower, of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding, and (b) Cash Management Obligations. Without limiting the
generality of the foregoing, Credit Agreement Obligations include (x) the
obligation to pay principal, interest, reimbursement obligations, charges,
expenses, fees, Attorney Costs, indemnities and other amounts payable by the
Borrower under any Financing Document and (y) the obligation of the Borrower to
reimburse any amount in respect of any of the foregoing that any Lender, in its
sole discretion, may elect to pay or advance on behalf of the Borrower. “Credit
Document” shall mean, collectively (without duplication), each Financing
Document and any Additional Credit Document providing for or evidencing any
Additional Secured Obligations. “Creditor Side Person” has the meaning specified
in Section 9.03(b). “Debtor Relief Laws” means the Bankruptcy Code of the United
States, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally. “Default” shall mean any event or condition that
constitutes an Event of Default under the Credit Agreement or any Additional
Credit Document or that, with the giving of any notice, the passage of time, or
both, would be an Event of Default under the Credit Agreement or any Additional
Credit Document. “Discharge of Credit Agreement Obligations” shall mean, except
as expressly set forth in Section 2.06(a) and Section 4.07(c), the payment in
full in cash of all outstanding principal amount of Loans under the Credit
Agreement, all interest due (including, without limitation, interest accruing at
the then applicable rate provided in the Credit Agreement after the maturity of
the Loans and any Post-Petition Interest) on all “Obligations” outstanding under
the Credit NYDOCS01/1212479.10 S-4 Puget- Amended and Restated Collateral Agency
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Agreement and all fees payable or otherwise accrued under the Financing
Documents (other than any contingent indemnity obligations that expressly
survive the termination of the Financing Documents). “Discharge of Secured
Obligations” shall mean, except as expressly set forth in Section 2.06 and
Section 4.07(c), the payment in full in cash of all (a) outstanding Secured
Obligations under any Credit Document, (b) interest (including, without
limitation, interest accruing at the then applicable rate provided in the
applicable Credit Document after the maturity of the Loans or other indebtedness
or other relevant Secured Obligations and Post-Petition Interest) on all Secured
Obligations outstanding under any Credit Document, and all fees and other
Secured Obligations outstanding under each Credit Document (other than any
contingent indemnity obligations that expressly survive the termination of the
Credit Documents). “Early Termination Date” shall have the respective meaning
assigned thereto under each Interest Hedging Agreement. “Environmental Law”
shall mean any and all federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, initiatives, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution, the protection of the environment, natural
resources, or, to the extent relating to exposure to Hazardous Materials, human
health or safety or to the release of any Hazardous Materials into the
environment, including air emissions and discharges to waste or public systems.
“Environmental Liability” shall mean any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any of its Subsidiaries resulting
from (a) the actual or alleged violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release, or presence of any Hazardous Materials into the environment
or (e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing. “Equity
Interests” shall mean, with respect to any Person, all of the shares, membership
interests, rights, participations or other equivalents (however designated) of
capital stock of (or other ownership or profit interests or units in) such
Person and all of the warrants, options or other rights for the purchase,
acquisition or exchange from such Person of any of the foregoing (including
through convertible securities). “Event of Default” shall mean (a) an “Event of
Default” under and as defined in the Credit Agreement or any Additional Credit
Document or (b) any event leading to an “Early Termination Date” or an “Early
Termination Event” under any Interest Rate Hedging Agreement with respect to
which the Borrower or any Loan Party is the defaulting party or affected party,
as the case may be. “Financial Closing Date” shall mean February 6, 2009.
“Financing Documents” shall have the meaning specified in the Credit Agreement.
“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative NYDOCS01/1212479.10 S-5 Puget- Amended
and Restated Collateral Agency Agreement 07771-0276/LEGAL16959722.4 5/4/10

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tribunal, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government. “Hazardous Materials” means all explosive or
radioactive substances or wastes and all hazardous or toxic substances, wastes
or pollutants, including petroleum or petroleum distillates, asbestos or
asbestos-containing materials, toxic mold, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other such substances or wastes defined in
or otherwise regulated as “hazardous” or “toxic” wastes or substances under
applicable Environmental Law. “Hedge Default” shall mean the occurrence of any
event specified in an Interest Hedging Agreement that entitles the Interest Rate
Hedge Bank party thereto to cause the early termination thereof in accordance
with the terms thereof. “Hedge Termination Certificate” shall mean a certificate
of any Interest Rate Hedge Bank stating that an Early Termination Date has
occurred or has been designated under an Interest Hedging Agreement to which it
is a party and setting forth the resulting Settlement Amount. “Immaterial
Subsidiary” has the meaning specified in the Credit Agreement. “Indemnified
Liabilities” means all liabilities, obligations, losses, damages, penalties,
claims, demands, actions, judgments, suits, costs, expenses and disbursements
(including Attorney Costs) of any kind or nature whatsoever which may at any
time be imposed on, incurred by or asserted against any Indemnified Party in any
way relating to or arising out of or in connection with (a) the execution,
delivery, enforcement, performance or administration of any Credit Document or
any other agreement, letter or instrument delivered in connection with the
transactions contemplated thereby or (b) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory (including any investigation
of, preparation for or defense of any pending or threatened claim,
investigation, litigation or proceeding). “Indemnified Party” means,
collectively, the Collateral Agent, its Affiliates and the directors, officers,
employees, agents, representatives, trustees and attorneys-in-fact of such
Persons and Affiliates. “Indemnified Secured Parties” has the meaning specified
in Section 5.01(f). “Insolvency or Liquidation Proceeding” means (a) any
voluntary or involuntary case or proceeding under Debtor Relief Laws with
respect to any Loan Party, (b) any other voluntary or involuntary insolvency,
reorganization or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding with respect to
any Loan Party or with respect to a material portion of their respective assets,
(c) any liquidation, dissolution, reorganization or winding up of any Loan Party
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy or (d) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of any Loan Party. “Intercreditor Vote”
shall mean a vote conducted in accordance with the procedures set forth in
Article 3 hereof among the Voting Parties for the Series entitled to vote with
respect to the particular decision at issue. “Interest Hedging Agreements” means
any rate swap, cap or collar agreement or similar arrangement between the
Borrower and one or more interest rate hedge providers designed to
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protect such Person against fluctuations in interest rates. For purposes of this
Agreement, the indebtedness at any time of the Borrower under an Interest
Hedging Agreement shall be determined at such time in accordance with the
methodology set forth in such Interest Hedging Agreement. “Interest Rate Hedge
Bank” shall mean (a) any Person that is a Lender or an Affiliate of a Lender at
the time it enters into an Interest Hedging Agreement or (b) Macquarie Bank
Limited to the extent it enters into an Interest Hedging Agreement, in each
case, in its capacity as a party to such Interest Hedging Agreement and only for
so long as any obligations of the Borrower remain outstanding under the Interest
Hedging Agreement to which such Interest Rate Hedge Bank is a party; provided
that such Interest Rate Hedge Bank executes a Joinder Agreement pursuant to
Section 3.03(b); and provided, further, that no Affiliate of the Borrower other
than Macquarie Bank Limited and its successors shall become an Interest Rate
Hedge Bank. “Joinder Agreement” shall mean a Joinder Agreement executed by the
Collateral Agent and each Authorized Representative for the Secured Obligations
subject thereto in accordance with Section 3.03(b) or Section 9.09(b), in form
and substance substantially in the form set forth as Appendix A hereto. “Law”
shall mean, collectively, all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law. “Lender” shall mean a
“Lender” as defined in the Credit Agreement. “Lien” means any mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), charge, or preference, priority or other security interest or
preferential arrangement, of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, any easement, right of way
or other encumbrance on title to real property having substantially the same
economic effect as any of the foregoing). “Loans” shall mean “Loans” as defined
in the Credit Agreement. “Loan Party” shall mean each of the Borrower and the
Parent. “Lock-Up Account” has the meaning specified in the Security Agreement.
“Macquarie” means The Macquarie Capital Group, which includes Macquarie Capital
Group Limited, its direct or indirect subsidiaries, and the funds (or similar
vehicles) they manage. “Macquarie Affiliates” means Macquarie Finance Americas
Inc. and Affiliates of Macquarie that are offshore banking units. “Majority
Non-Controlling Voting Parties” shall mean, at any time, the Secured Parties
owed or holding Secured Obligations that constitute the largest total
outstanding amount of any then outstanding Series of Secured Obligations.
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“Majority Non-Controlling Voting Party Enforcement Date” shall mean with respect
to any Series of Secured Obligations, the date which is 90 days (throughout
which 90 day period such Series of Secured Obligations was the Series
constituting the Majority Non-Controlling Voting Parties) after the occurrence
of both (i) an Event of Default (under and as defined in the Credit Document
applicable to such Majority Non-Controlling Voting Parties) and (ii) the
Collateral Agent’s and each other Authorized Representative’s receipt of written
notice from the Authorized Representative for the Majority Non-Controlling
Voting Parties certifying that (x) the holders of such Series of Secured
Obligations are the Majority Non-Controlling Voting Parties and that an Event of
Default (under and as defined in the Credit Document applicable to such Majority
Non- Controlling Voting Parties) has occurred and is continuing and (y) the
Secured Obligations of such Series are currently due and payable in full
(whether as a result of acceleration thereof or otherwise) in accordance with
the terms of the applicable Credit Document governing the Series for such
Majority Non-Controlling Voting Parties; provided that the 90-day period
referenced above in this definition shall be stayed and the Majority
Non-Controlling Voting Party Enforcement Date shall be stayed and shall not
occur and shall be deemed not to have occurred with respect to any Collateral
(1) at any time the Collateral Agent has commenced and is diligently pursuing
any enforcement action with respect to such Collateral or (2) at any time any
Loan Party or any grantor which has granted a security interest in such
Collateral is then a debtor under or with respect to any Insolvency or
Liquidation Proceeding. “Member” shall mean any Person owning of record or
beneficially any of the issued and outstanding Equity Interests in the Parent,
the Borrower or Puget Holdings LLC. “New Collateral Agent” has the meaning
specified in Section 2.06(a). “New Facility Agent” has the meaning specified in
Section 2.06(a). “Non-Voting Lender” has the meaning specified in Section
3.03(c). “Notice of Default’ has the meaning specified in Section 4.01(a).
“Operating Company” means Puget Sound Energy, Inc., a Washington Corporation,
and each other Subsidiary of the Borrower other than any Immaterial Subsidiary
and, for the avoidance of doubt, the term Operating Company shall include Puget
Western, Inc. “Parent” has the meaning specified in the introductory paragraph
of this Agreement. “Person” means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity. “Possessory Collateral” shall mean any
Collateral in the possession of the Collateral Agent or any Authorized
Representative (or its agents or bailees), to the extent that possession thereof
perfects a Lien thereon under the Uniform Commercial Code of any jurisdiction.
Possessory Collateral includes, without limitation, any Certificated Securities,
Instruments, and Chattel Paper, in each case, delivered to or in the possession
of the Collateral Agent or any Authorized Representative (or its agent or
bailees) under the terms of the Security Documents. All capitalized terms used
in this definition and not defined elsewhere in this Agreement have the meanings
assigned to them in the New York Uniform Commercial Code. NYDOCS01/1212479.10
S-8 Puget- Amended and Restated Collateral Agency Agreement
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“Post-Petition Interest” shall mean any interest or entitlement of fees or
expenses or other charges that accrues after the commencement of any Insolvency
or Liquidation Proceeding, whether or not allowed or allowable in any such
Insolvency or Liquidation Proceeding. “Refinance” shall mean, in respect of any
indebtedness, (a) such indebtedness (in whole or in part) as extended, renewed,
defeased, refinanced, replaced, refunded, repaid, restated, supplemented,
restructured, renewed, increased or otherwise amended or modified and (b) any
other indebtedness issued in exchange or replacement for or to refinance such
indebtedness, in whole or in part, whether with the same or different lenders,
arrangers and/or agents and whether with a larger or smaller aggregate principal
amount and whether for a longer or shorter maturity, in each case to the extent
permitted (if addressed therein or otherwise not prohibited) under the terms of
the Credit Agreement or any other applicable Credit Document. “Refinanced” and
“Refinancing” shall have correlative meanings. “Remedies Event of Default” shall
mean (a) the occurrence of an Event of Default under the Credit Agreement or any
Additional Credit Document or (b) the occurrence of a Hedge Default; provided
that so long as Secured Obligations (other than in respect of Interest Hedging
Agreements with Interest Rate Hedge Banks) are outstanding, a Hedge Default
shall not constitute a Remedies Event of Default unless an Event of Default
described under the foregoing clause (a) has occurred and is continuing at the
time of such Hedge Default. “Remedies Instruction” shall mean a written
instruction to the Collateral Agent from or on behalf of the Required Voting
Parties (i) certifying that (x) a Remedies Event of Default has occurred and is
continuing under the applicable Credit Document and (y) an Intercreditor Vote
has been conducted in accordance with the requirements of this Agreement with
respect to such Remedies Event of Default, (ii) describing with reasonable
specificity which particular remedies available to the Secured Parties are to be
pursued and which particular action are to be taken by the Collateral Agent in
response to such Remedies Event of Default, and (iii) containing such other
information as is permitted under this Agreement. “Replacement Credit Agreement”
has the meaning specified in Section 2.06(a). “Required Voting Parties” shall
mean, with respect to any proposed decision or action hereunder, the Secured
Parties owed or holding more than 50% of the Total Outstandings at such time
under (i) until the earlier to occur of (x) the Discharge of Credit Agreement
Obligations and (y) the occurrence of the Majority Non-Controlling Voting Party
Enforcement Date (if any), the Credit Agreement and (ii) from and after the
earlier to occur of the (x) Discharge of Credit Agreement Obligations and (y)
the occurrence of the Majority Non-Controlling Voting Party Enforcement Date,
the applicable Credit Document governing the Series of Secured Obligations of
the Majority Non-Controlling Voting Parties at such time. “Secured Hedge
Obligations” shall mean all amounts payable to any Interest Rate Hedge Bank
under any Interest Hedging Agreement. “Secured Obligations” shall mean, (a) all
Credit Agreement Obligations, (b) all Secured Hedge Obligations, and (c) any
Additional Secured Obligations, in each case, whether fixed or contingent,
matured or unmatured, whether or not allowed or allowable in an Insolvency and
Liquidation Proceeding. NYDOCS01/1212479.10 S-9 Puget- Amended and Restated
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“Secured Parties” shall mean, collectively, the Agents, the Lenders, the
Interest Rate Hedge Banks, any Additional Secured Parties and each co-agent or
sub-agent appointed by any Agent or from time to time pursuant to any Credit
Document or this Agreement. “Security Interest” has the meaning specified in
Section 2.02(a). “Series” shall mean each of (i) the Credit Agreement
Obligations, (ii) any Additional Obligations incurred pursuant to any Additional
Credit Document which, pursuant to any Joinder Agreement, are represented
hereunder by a common Authorized Representative (in its capacity as such for
such Secured Obligations) and (iii) the Secured Hedge Obligations. “Security
Documents” shall mean, collectively, the Security Agreement, the Pledge
Agreement and any other security agreements, pledge agreements or other similar
agreements delivered to the Agents, the Lenders, the Interest Rate Hedge Banks
and the Additional Secured Parties, and any other agreements, instruments or
documents that create or purport to create a Lien in favor of the Collateral
Agent for the benefit of the Secured Parties. “Settlement Amount” shall mean, as
at any date of determination thereof, the amount calculated to be due in respect
of any Early Termination Date under any Interest Hedging Agreement in accordance
with the terms thereof. “Subsidiary” of a Person means a corporation,
partnership, joint venture, limited liability company or other business entity
of which a majority of the shares of securities or other interests having
ordinary voting power for the election of directors or other governing body
(other than securities or interests having such power only by reason of the
happening of a contingency) are at the time beneficially owned or controlled by
such Person. Unless otherwise specified, all references herein to a “Subsidiary”
or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the
Borrower. “Total Outstandings” shall mean, with respect to any Credit Document
(other than any Interest Rate Hedging Agreement), at any time, an amount equal
to the sum of, without duplication, the aggregate unpaid principal amount of
Loans or other indebtedness outstanding under such Credit Document at such time
after giving effect to any borrowings, advances and prepayments or repayments of
any Loans or indebtedness under the Credit Agreement or such other Credit
Document, as the case may be, on such date, plus the amount of any unfunded
Commitments under the Credit Agreement or such other Credit Document, as the
case may be, on such date. “Unanimous Voting Parties” shall mean, with respect
to any Intercreditor Vote, each of the Facility Agent, each of the Authorized
Representatives appointed under each Additional Credit Document and each
Interest Rate Hedge Bank, in each case casting votes representing 100% of the
Voting Party Percentage applicable to each such Series of Secured Obligations.
“Voting Parties” means the Lenders, any Additional Secured Party and, subject to
Section 3.03(b), each Interest Rate Hedge Bank. “Voting Party Percentage” shall
mean, in connection with any proposed decision or action hereunder, the actual
percentage, as determined pursuant to Section 3.04, of allotted votes cast in
favor of such decision or action by the Secured Parties entitled to vote with
respect to such decision or action. “Wall” has the meaning specified in Section
9.03(b). NYDOCS01/1212479.10 S-10 Puget- Amended and Restated Collateral Agency
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Article 2. Appointment and Duties of Collateral Agent; Secured Parties'
Agreements; Collateral Matters. Section 2.01. Appointment and Duties of
Collateral Agent. (a) Each of the Secured Parties hereby designates and appoints
Barclays Bank PLC to act as the Collateral Agent under the Security Documents,
and authorizes the Collateral Agent to execute each of the Security Documents on
its behalf and take such actions on its behalf under the provisions of the
Security Documents and to exercise such powers and perform such duties as are
expressly delegated to the Collateral Agent by the terms of the Security
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary in any Security Document, the
Collateral Agent shall not have any duties or responsibilities, except those
expressly set forth herein and in the Security Documents, and no implied
covenants, functions or responsibilities, fiduciary or otherwise, shall be read
into any of the Security Documents or otherwise exist against the Collateral
Agent. Without limiting the generality of the foregoing, the use of the term
“agent” herein and in the other Credit Documents with reference to any Agent is
not intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties. (b) The
Collateral Agent shall give notice to the Secured Parties of any action to be
taken by it under any Security Document, and such notice shall be given prior to
the taking of such action unless the Collateral Agent determines that to do so
would be detrimental to the interests of the Secured Parties, in which event
such notice shall be given promptly after the taking of such action. (c)
Notwithstanding any provision to the contrary in any Security Document, the
Collateral Agent shall not be required to exercise any discretionary rights or
remedies under any of the Security Documents or give any consent under any of
the Security Documents or enter into any agreement amending, modifying,
supplementing or waiving any provision of any Security Document (other than this
Agreement) unless it shall have been directed to do so by the Controlling
Authorized Representative or the Required Voting Parties. Section 2.02. Secured
Parties' Agreements; No Interference; Payment Over. (a) Except as set forth in
clause (b) below and in Sections 2.05(b) and 4.05(c) hereof, each Secured Party
agrees that, as among the Secured Parties, the security interest in any
Collateral granted under any Security Document (the “Security Interest”) to the
Collateral Agent for the benefit of such Secured Party ranks and will rank
equally in priority with the Security Interest of each other Secured Party in
the same Collateral. (b) Notwithstanding anything to the contrary set forth in
any Credit Document, any proceeds of Collateral or amounts required to be
deposited in the Lock-Up Account pursuant to Section 6.12 of the Credit
Agreement and Section 4.02 of the Security Agreement received by any Secured
Party (other than from the Collateral Agent pursuant hereto) shall be
transferred by such Secured Party to the Collateral Agent solely for application
towards payment of Credit Agreement Obligations owing to the Lenders in
accordance with the terms of the Financing Documents. (c) Each Secured Party
agrees that the Collateral Agent may refrain from acting or continuing to act in
accordance with any instructions of the Required Voting Parties to begin any
legal action or proceeding arising out of or in connection with any Credit
Document until it shall have received such indemnity or security from the
Secured Parties as it may reasonably require (whether by payment in
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advance or otherwise) for all costs, claims, losses, expenses (including
reasonable legal fees and expenses) and liabilities which it will or may expend
or incur in complying or continuing to comply with such instructions; provided,
that nothing in this subclause (c) shall be deemed to obligate any Secured Party
to provide any such indemnity or security. (d) Each Secured Party agrees that
(i) it will not challenge or question in any proceeding the validity or
enforceability of any Secured Obligations of any Series or any Credit Document
or the validity, attachment, perfection or priority of any Lien under any
Security Document or the validity or enforceability of the priorities, rights or
duties established by or other provisions of this Agreement; (ii) it will not
take or cause to be taken any action the purpose or intent of which is, or could
be, to interfere, hinder or delay, in any manner, whether by judicial
proceedings or otherwise, any sale, transfer or other disposition of the
Collateral by the Collateral Agent, (iii) except as provided in Section 2.04(e),
it shall have no right to direct the Collateral Agent or any other Secured Party
to exercise any right, remedy or power with respect to any Collateral unless
such Secured Party is the Controlling Authorized Representative, (iv) it will
not institute any suit or assert in any suit, bankruptcy, insolvency or other
proceeding any claim against the Collateral Agent or any other Secured Party
seeking damages from or other relief by way of specific performance,
instructions or otherwise with respect to any Collateral, and none of the
Collateral Agent, any Controlling Authorized Representative or any other Secured
Party shall be liable for any action taken or omitted to be taken by the
Collateral Agent, such Controlling Authorized Representative or other Secured
Party with respect to any Collateral in accordance with the provisions of this
Agreement, (v) it will not seek, and hereby waives any right, to have any
Collateral or any part thereof marshalled upon any foreclosure or other
disposition of such Collateral and (vi) it will not attempt, directly or
indirectly, whether by judicial proceedings or otherwise, to challenge the
enforceability of any provision of this Agreement; provided that nothing in this
Agreement shall be construed to prevent or impair the rights of any of the
Collateral Agent or any other Secured Party to enforce this Agreement or the
right to take any action permitted by Section 2.04(e). (e) Each Secured Party
hereby agrees that if it shall obtain possession of any Collateral or shall
realize any proceeds or payment in respect of any Collateral, pursuant to any
Security Document or by the exercise of any rights available to it under
applicable Law or in any Insolvency or Liquidation Proceeding or through any
other exercise of remedies at any time prior to the Discharge of each of Series
of Secured Obligations, then it shall hold such Collateral, proceeds or payment
in trust for the other Secured Parties and promptly transfer such Collateral,
proceeds or payment, as the case may be, to the Collateral Agent, to be
distributed in accordance with the provisions of Section 4.05 hereof. Section
2.03. Possessory Collateral Agent as Gratuitous Bailee for Perfection. (a) The
Collateral Agent agrees to hold any Collateral constituting Possessory
Collateral that is part of the Collateral in its possession or control (or in
the possession or control of its agents or bailees) as gratuitous bailee for the
benefit of each Secured Party and any assignee solely for the purpose of
perfecting the security interest granted in such Possessory Collateral, if any,
pursuant to the applicable Security Documents, in each case, subject to the
terms and conditions of this Section 2.03. Pending delivery to the Collateral
Agent, each Authorized Representative agrees to hold any Collateral constituting
Possessory Collateral, from time to time in its possession, as gratuitous bailee
for the benefit of each other Secured Party and any assignee, solely for the
purpose of perfecting the security interest granted in such Possessory
Collateral, if any, pursuant to the applicable Security Documents, in each case,
subject to the terms and conditions of this Section 2.03. (b) The duties or
responsibilities of the Collateral Agent and each Authorized Representative
under this Section 2.03 shall be limited solely to holding any Collateral
constituting Possessory Collateral as gratuitous bailee for the benefit of each
other Secured Party for purposes of perfecting the Lien held by such Secured
Parties therein. NYDOCS01/1212479.10 S-12 Puget- Amended and Restated Collateral
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(c) All such Possessory Collateral in the possession of any Authorized
Representative shall be delivered to the Collateral Agent as soon as
practicable. Section 2.04. Collateral Matters; Actions with Respect to
Collateral; Prohibition on Contesting Liens. The Secured Parties irrevocably
agree that: (a) Upon request by the Collateral Agent at any time, the Secured
Parties will confirm in writing the Collateral Agent's authority to release its
interest in particular types or items of property pursuant to this Section 2.04.
In each case as specified in this Section 2.04, the Collateral Agent will (and
each Secured Party irrevocably authorizes the Collateral Agent to), at the
Borrower's expense, execute and deliver to the Borrower or any Loan Party, as
applicable, such documents as such Person may reasonably request to evidence the
release of such item of Collateral from the assignment and security interest
granted under the Security Documents, in accordance with the terms of this
Agreement or any other Credit Document. (b) With respect to any Collateral, (i)
only the Collateral Agent shall be authorized to release Liens and exercise
rights and remedies set forth in Security Documents with respect to any
Collateral and in accordance with Section 2.07, (ii) the Collateral Agent shall
not follow any instructions (other than instructions pursuant to Section
2.04(e)(ii)) with respect to such Collateral from any Authorized Representative
or any Secured Party (other than the Controlling Authorized Representative and
the Required Voting Parties) and (iii) no Authorized Representative who is not
the Controlling Authorized Representative or other Secured Party shall or shall
instruct the Collateral Agent to, commence any judicial or nonjudicial
foreclosure proceedings with respect to, seek to have a trustee, receiver,
liquidator or similar official appointed for or over, attempt any action to take
possession of, exercise any right, remedy or power with respect to, or otherwise
take any action to enforce its security interest in or realize upon, or take any
other action available to it in respect of, any Collateral, whether under any
Security Document, applicable Law or otherwise, it being agreed that only the
Collateral Agent, acting on the instructions of the Controlling Authorized
Representative or the Required Voting Parties and in accordance with the
applicable Security Documents, shall be entitled to take any such actions or
exercise any such remedies with respect to Collateral. No Authorized
Representative or Secured Party (other than the Controlling Authorized
Representative or Required Voting Parties) will contest, protest or object to
any foreclosure proceeding or action brought by the Collateral Agent in
accordance with the terms of this Agreement or any other exercise by the
Collateral Agent of any rights and remedies relating to the Collateral, or to
cause the Collateral Agent to bring any foreclosure proceedings or action or
exercise any rights or remedies relating to the Collateral except as permitted
by Section 2.04(e)(ii). (c) Each Authorized Representative and each other
Secured Party agrees that it will not accept any Lien on any Collateral for the
benefit of any Secured Obligations other than Liens created in favor of the
Collateral Agent pursuant to a Security Document, and by executing this
Agreement (or a Joinder Agreement) and by accepting the benefits of this
Agreement and of each Security Document, each Authorized Representative and each
Secured Party for which it is acting hereunder agree to be bound by the
provisions of this Agreement and the Security Documents applicable to it. (d)
Each of the Secured Parties agrees that it will not (and hereby waives any right
to) contest or support any other Person in contesting, in any proceeding
(including any Insolvency or Liquidation Proceeding), the perfection, priority,
validity or enforceability of a Lien held by the Collateral Agent on behalf of
any of the Secured Parties in all or any part of the Collateral, or the
provisions of this NYDOCS01/1212479.10 S-13 Puget- Amended and Restated
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Agreement; provided that nothing in this Agreement shall be construed to prevent
or impair the rights of any of the Collateral Agent or any Authorized
Representative to enforce this Agreement. (e) Section 2.04(b) shall not prohibit
a Secured Party from taking the following actions: (i) in any Insolvency or
Liquidation Proceeding commenced by or against the Borrower or any other Loan
Party, each Secured Party may file a claim or statement of interest with respect
to its Series of Secured Obligations, as applicable; (ii) each Authorized
Representative may take and may direct the Collateral Agent to take any action
(not adverse to the Liens of the Collateral Agent securing the Secured Parties)
in order to preserve or protect its interest in and Liens created by the
Security Documents on the Collateral; (iii) the Secured Parties shall be
entitled to file any necessary responsive or defensive pleadings in opposition
to any motion, claim, adversary proceeding or other pleading made by any Person
objecting to or otherwise seeking the disallowance of their claims, including
any claims secured by the Collateral, if any; (iv) in any Insolvency or
Liquidation Proceeding, the Secured Parties shall be entitled to file any
pleadings, objections, motions or agreements which assert rights or interests
available to unsecured creditors of the Loan Parties arising under either Debtor
Relief Laws or applicable non- bankruptcy law, in each case not in contravention
of the terms of this Agreement; (v) in any Insolvency or Liquidation Proceeding,
the Secured Parties shall be entitled to vote on any plan of reorganization; and
(vi) both before and during an Insolvency or Liquidation Proceeding, any Secured
Party may take any actions and exercise any and all rights that would be
available to a holder of unsecured claims, including, without limitation, the
commencement of an Insolvency or Liquidation Proceeding against any Loan Party
in accordance with applicable Law and the termination of any agreement by the
holder of any such obligation in accordance with the terms thereof. (f) The
Collateral Agent agrees to follow the instructions received from an Authorized
Representative pursuant to Section 2.04(e)(ii); provided, however, that the
Collateral Agent shall not follow such instructions to the extent that they are
expressly inconsistent with instructions received from the Controlling
Authorized Representative pursuant to Section 4.03 after receipt of a Default
Notice that has not been withdrawn. The Collateral Agent agrees to provide to
each Authorized Representative a copy of each instruction that it receives
pursuant to Section 2.04(e)(ii). (g) The Collateral Agent agrees to provide to
each Authorized Representative a copy of each notice, letter or direction that
it provides to or receives from a Loan Party or another Authorized
Representative pursuant to this Agreement. Section 2.05. Absolute Rights of
Secured Parties and Authorized Representatives. (a) Notwithstanding any other
provision of this Agreement or any Security Document, but subject to Section
2.05(b) below, each of the Authorized Representatives and each of the Secured
Parties has an absolute and unconditional right to receive payment of all of the
Secured Obligations owing to such Authorized Representative or such Secured
Party, as the case may be, when the same becomes due and payable and at the time
and place and otherwise in the manner set forth in the applicable Secured
Document, and the right of each such Authorized Representative and each such
Secured Party to institute proceedings for the NYDOCS01/1212479.10 S-14 Puget-
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enforcement of such payment on or after the date such payment becomes due and to
assert (to the extent permitted by Section 2.04(e)) its position as a secured
creditor in a proceeding under any Debtor Relief Laws in which any Loan Party is
a debtor, and the obligation of such Loan Party to pay all of the Secured
Obligations owing to each of the Authorized Representatives and each of the
Secured Parties at the time and place expressed therein, shall not be impaired
or affected without the consent of such Authorized Representative or such
Secured Party. In addition, the right of any Secured Party or any Authorized
Representative, on behalf of itself or on behalf of any such Secured Party, to
receive payment from sources other than the Collateral shall not be, and is not
hereby, impaired or affected in any manner. Without limiting the generality of
the foregoing provisions of this Section 2.05, the Facility Agent’s and a
Lender’s right to receive its ratable share of any amounts maintained in the
Lock-Up Account, or any Authorized Representative’s or Secured Party’s rights to
receive its ratable share of proceeds of any of the Collateral, or any part
thereof, under the terms of this Agreement and the Security Documents, shall not
be diminished or affected in any way by its right to receive proceeds of any
right of setoff, or payment upon a guaranty or from any other source. (b) At any
time prior to the Discharge of the Secured Obligations and after (i) the
commencement of any Insolvency or Liquidation Proceeding in respect of any Loan
Party or (ii) (A) the Credit Agreement Obligations, Additional Secured
Obligations or the Secured Hedge Obligations have become due and payable in full
(whether at maturity, upon acceleration or otherwise) or any Secured Obligations
in respect of the Credit Agreement Obligations, Additional Secured Obligations
or the Secured Hedge Obligations have not been paid when due and (B) a Remedy
Instruction has been provided by the Required Voting Parties, no payment of
money (or the equivalent of money) shall be made from the proceeds of Collateral
to the Collateral Agent for the benefit of any Secured Party or to any holder of
any Secured Obligations, except as provided for in Section 4.05(a); provided,
however, that nothing in this Section 2.05(b) shall prohibit any cash or funds
on deposit in the Lock-Up Account to be distributed to the Lenders in accordance
with the applicable terms of the Financing Documents and no other Secured Party
other than the Lenders shall be entitled to receive distributions of any cash or
funds on deposit in the Lock-Up Account. Section 2.06. Refinancings of Credit
Agreement and Additional Credit Documents. (a) Subject to the limitations set
forth in the applicable Credit Documents (if any), each Loan Party and each
Secured Party acknowledges and agrees that the Credit Agreement may be
Refinanced in accordance with this Section 2.06(a). At any time concurrently
with or after the Discharge of Secured Obligations (or the Discharge of Secured
Obligations other than Additional Secured Obligations), the Borrower thereafter
enters into a Refinancing of the Credit Agreement (the “Replacement Credit
Agreement”) and any related Financing Document (as defined in such Replacement
Credit Agreement), then such Discharge of Secured Obligations (or the Discharge
of Secured Obligations other than Additional Secured Obligations), as
applicable, shall automatically be deemed not to have occurred for purposes of
this Agreement (other than with respect to any actions taken as a result of the
occurrence of such first Discharge of Secured Obligations and (or Discharge of
Secured Obligations other than Additional Secured Obligations), the Replacement
Credit Agreement and related Financing Documents and the obligations under such
Replacement Credit Agreement and related Financing Documents shall automatically
be treated as “Secured Obligations”, “Credit Agreement Obligations”, “Credit
Agreement”, and “Financing Documents”, as applicable, and the lenders and agents
party thereto “Lenders”, “Secured Parties”, “Authorized Representatives” and
“Agent Related Persons”, as applicable, for all purposes of this Agreement,
including the Lien priorities and rights with respect to the Collateral set
forth herein, and the new facility agent thereunder (the “New Facility Agent”)
shall automatically be deemed to be the “Facility Agent” hereunder for all
purposes of this Agreement. NYDOCS01/1212479.10 S-15 Puget- Amended and Restated
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(b) Upon termination of the Credit Agreement, including in connection with any
amendment and restatement or Refinancing, the Liens securing the Hedge
Obligations and the Additional Secured Obligations shall survive. (c) Any Series
of Additional Secured Obligations may be Refinanced without affecting the
priorities set forth in Section 4.05 or the provisions of this Agreement
defining the relative rights of any Series of Secured Obligations; provided that
the Authorized Representative of the holders of any such Refinanced Additional
Secured Obligations shall have executed a Joinder Agreement on behalf of the
holders of such Refinanced Secured Obligations. Section 2.07. Release of Liens
on Collateral. The Collateral Agent’s Liens upon the Collateral may be released:
(a) in whole, upon the Discharge of the Secured Obligations; (b) as to any
Collateral that is released, sold, transferred or otherwise disposed of by any
Loan Person to a Person that is not (either before or after such release, sale,
transfer or disposition) the Borrower or any other Loan Party in a transaction
or other circumstance that complies with the terms of the Credit Documents (for
so long as any Credit Document is in effect) and is permitted by all of the
other Credit Documents, at the time of such release, sale, transfer or other
disposition or to the extent of the interest released, sold, transferred or
otherwise disposed of; (c) as to a release of less than all or a material
portion of the Collateral, at any time prior to the Discharge of Secured
Obligations, if consent to the release of all Liens on such Collateral has been
given by the Required Voting Parties; and (d) as to a release of all or any
material portion of the Collateral (other than pursuant to clause (a) above), if
consent to release of that Collateral has been given by the Unanimous Voting
Parties. Article 3. Decision Making; Voting; Notice and Procedures. Section
3.01. Decision Making. (a) Subject to Section 4.02 and except for any action
that may be taken unilaterally by a Secured Party as expressly provided in any
Credit Document, no Secured Party may exercise or enforce any right, remedy,
power or discretion, give any consent or any waiver, or make any determination
under or in respect of any provisions of any Credit Documents, except in
accordance with this Agreement. In connection with any action permitted to be
taken unilaterally by the Collateral Agent pursuant to the express provisions of
any Credit Document, nothing herein shall preclude the Collateral Agent from
consulting such Secured Parties as the Collateral Agent may in its discretion
deem desirable. (b) Each decision made in accordance with the terms of this
Agreement shall be binding upon each of the Secured Parties. Section 3.02.
Voting Generally. Where, in accordance with this Agreement or any other Credit
Document, the modification, approval or other direction of the Required Voting
Parties is required, the determination of whether such modification, approval or
direction should be granted or withheld shall be determined by an Intercreditor
Vote. NYDOCS01/1212479.10 S-16 Puget- Amended and Restated Collateral Agency
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Section 3.03. Intercreditor Votes: Each Party's Entitlement to Vote. (a) Except
as otherwise provided in this Section 3.03, each Voting Party shall be entitled
to vote in each Intercreditor Vote under this Agreement. (b) Unless and until
any Interest Rate Hedge Bank shall have delivered to the Collateral Agent and
each Secured Party a Hedge Termination Certificate, such Interest Rate Hedge
Bank shall not have (i) any voting rights with respect to Secured Obligations
arising under any Interest Rate Hedging Agreement to which it is a party or (ii)
any voting rights with respect to any Intercreditor Vote; provided that any such
Interest Rate Hedge Bank shall at all times (subject to Section 3.03(c) and
3.03(d)) be a Voting Party for purposes of the definition of “Unanimous Voting
Parties” in Section 1.01 hereof and for purposes of clauses (i) and (ii) of the
proviso contained in Section 9.03. If, after the date of this Agreement, any
Person becomes an Interest Rate Hedge Bank and such Person has not previously
executed a counterpart of this Agreement or a Joinder Agreement in its capacity
as an Interest Rate Hedge Bank, such Person shall execute and deliver to the
Collateral Agent (x) a Joinder Agreement and (y) such other documentation as the
Collateral Agent may reasonably request to evidence the due authorization,
execution and delivery of this Agreement by such Person. By entering into or
joining this Agreement, each Interest Rate Hedge Bank shall be deemed to have
agreed to be bound by the provisions set forth in the other Financing Documents
to which the Interest Rate Hedge Banks or the Collateral Agent, on behalf of the
Secured Parties, is a party. (c) None of (i) any Affiliate of the Borrower or
any Member that from time to time holds any Commitment, any Loan or any other
interest in a Secured Obligation (other than, subject to Section 10.01 of the
Credit Agreement and Section 9.03 hereunder, Macquarie Affiliates in their
respective capacity as a Lender and Macquarie Bank Limited in its capacity as an
Interest Rate Hedge Bank) or (ii) any Lender that has agreed, directly or
indirectly, to vote or otherwise act at the direction or subject to the approval
or disapproval of any Person identified in clause (i) (each a “Non-Voting
Lender”) shall be entitled to participate in any Intercreditor Vote, and the
Collateral Agent in determining the percentage of votes cast shall deem each
Non-Voting Lender to have voted proportionately in accordance with the votes of
the Lenders thereunder entitled to vote. (d) Notwithstanding any provision of
this Agreement to the contrary, Macquarie Bank Limited, solely in its capacity
as an Interest Rate Hedge Bank, shall not be entitled to vote on any matter that
is subject to the vote of the Unanimous Voting Parties or be entitled to cast
any “tie-breaker” vote on any matter. Section 3.04. Intercreditor Votes: Votes
Allocated to Each Party. (a) Each Voting Party, if entitled to cast a vote with
respect to the matter being considered, shall have the following number of votes
in such Intercreditor Vote: (i) with respect to each Lender, a number of votes
equal to the sum of the Total Outstandings represented by or owed to such
Lender; (ii) from and after the delivery of a Hedge Termination Certificate,
with respect to each Interest Rate Hedge Bank, a number of votes equal to the
Settlement Amount, if any, owing to such Interest Rate Hedge Bank set out in
such Hedge Termination Certificate; and (iii) with respect to each Additional
Secured Party with respect to any Series of Additional Secured Obligations, a
number of votes equal to the sum of the Total Outstandings NYDOCS01/1212479.10
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represented by or owed to such Additional Secured Parties under such Series of
Additional Secured Obligations. (b) In calculating the Voting Party Percentage
consenting to, approving, waiving or otherwise providing direction with respect
to a decision, the number of votes cast in favor of the proposed consent,
approval, waiver, direction or other action shall be divided by the total number
of votes entitled to be cast with respect to such matter. The Secured Parties
(including any Secured Party that becomes a party hereto after the date hereof)
hereby waive any and all rights they may have to object to or seek relief from
the decision of the Voting Parties voting with respect to any matter and agree
to be bound by such decision. Nothing contained in this Section 3.04(b) shall
preclude any Voting Party from participating in any re-voting or further voting
relating to such matter. Section 3.05. [Reserved]. Section 3.06. Exercise of
Discretion With Respect to Intercreditor Aspects of the Credit Documents. (a)
Unless an Event of Default or Hedge Default has occurred and is continuing, and
only to the extent in all cases that the discretion exercised by or the actions
taken by the Collateral Agent could not reasonably be expected to result in an
Event of Default or Hedge Default or have a material adverse effect on the
interests of any Secured Party (but, for the avoidance of doubt, with the
consent of the Borrower or Parent, as applicable to the extent such consent is
required under the applicable Security Document), the Collateral Agent may,
without obtaining the consent of the Required Voting Parties or any other
Secured Party other than as set forth in Section 3.07, modify any Security
Document to which it is a party or this Agreement to (i) cure any ambiguity or
to cure, correct or supplement any provision contained therein which is
inconsistent with any other provisions contained therein , (ii) make, complete
or confirm any grant of Collateral permitted or required by this Agreement or
the Security Documents or any release of any Collateral permitted under this
Agreement or (iii) to make changes that would provide additional benefits or
rights to the Secured Parties. (b) Notwithstanding the other provisions of
Section 9.03 or any other provision of the Security Documents, the Borrower, the
Parent and the Collateral Agent (at the direction of the Facility Agent) and,
following a Majority Non-Controlling Voting Party Enforcement Date, the
Authorized Representative for the Majority Non-Controlling Voting Parties at
such time) may (but shall not be obligated to) amend or amend and restate this
Agreement without the consent of any other Secured Party in order to provide for
Additional Secured Obligations of the Loan Parties and liens securing such
Additional Secured Obligations on all or an portion of the Collateral with a
priority junior to that of the Secured Parties, so long as the incurrence of
such obligations and Liens is not prohibited by the terms of any Credit
Document. The Borrower, the Parent and the Collateral Agent may (but shall not
be obligated to) amend, modify or supplement this Agreement and/or any Security
Document without the consent of any Secured Party, as may be necessary from time
to time in the reasonable discretion of the Collateral Agent and the Borrower,
to effect the provisions of Sections 2.06 and 9.09 of this Agreement. Section
3.07. Certain Modifications by the Secured Parties. The Secured Parties may at
any time and from time to time in accordance with the terms of the applicable
Credit Documents to which they are a party, without any consent of or notice to
any other Secured Party (but, for the avoidance of doubt, with the consent of
the Borrower or Parent, as applicable to the extent such consent is required
under the applicable Credit Document) and without impairing or releasing the
obligations of any Person under this Agreement: (i) amend the Credit Document to
which such Person is a party in accordance with the terms thereof, (ii) release
anyone liable in any manner under or in respect of the Secured Obligations owing
under the Credit Document to which such Person is a party (but only in respect
of such Secured Obligations) and (iii) waive any provisions of any Credit
Document to which such Person is a party (in NYDOCS01/1212479.10 S-18 Puget-
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each case, provided such amendment or waiver shall not materially and adversely
affect the rights of any other Person under this Agreement). Section 3.08.
Effect of Amendment on Collateral Agent. No party hereto shall amend any
provision of any Credit Document that materially affects the Collateral Agent
without the written consent of the Collateral Agent. Section 3.09. Notification
of Matters. (a) If at any time (x) the Collateral Agent proposes to exercise any
discretion conferred on it under any Credit Document, (y) any Secured Party, in
accordance with this Agreement, notifies the Collateral Agent of a matter with
respect to which it believes the Collateral Agent should exercise its discretion
or (z) the Collateral Agent becomes aware (whether on its own or as a
consequence of any notification from a Secured Party) of any matter requiring a
determination or vote by the Secured Parties under this Agreement, then the
Collateral Agent shall promptly notify each other Secured Party of the matter in
question, specifying: (i) if applicable, the manner in which the Collateral
Agent proposes to exercise its discretion; (ii) the Required Voting Parties (if
any) required for such determination or vote; and (iii) if applicable, the time
period determined by the Collateral Agent within which each Secured Party must
provide it with instructions in relation to such matter. (b) The Collateral
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Hedge Default, unless the Collateral Agent shall have received
written notice from a Secured Party or the Borrower referring to this Agreement,
describing such Default or Hedge Default and stating that such notice is a
“notice of default.” The Collateral Agent will notify the Secured Parties of its
receipt of any such notice. The Collateral Agent shall take such action with
respect to any Remedies Event of Default as may be directed by the Required
Voting Parties in accordance with this Agreement; provided that unless and until
the Collateral Agent has received any such direction, the Collateral Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to a Event of Default or Hedge Default as it shall deem
advisable or in the best interest of the Secured Parties. Section 3.10. Notice
of Amounts Owed. In the event that the Collateral Agent is instructed by the
Required Voting Parties to proceed to foreclose upon, collect, sell or otherwise
dispose of or take any other action with respect to any or all of the Collateral
or to enforce any remedy under any other Credit Document, then upon the request
of the Collateral Agent, each Secured Party shall promptly notify the Collateral
Agent in writing, as of any time that the Collateral Agent may reasonably
specify in such request, of (i) the aggregate amount of the respective Secured
Obligations owing to such Secured Parties as of such date, (ii) the components
of such Secured Obligations and (iii) such other information as the Collateral
Agent may reasonably request. Article 4. Default; Remedies. Section 4.01. Notice
of Defaults. Upon the occurrence of and at any time during the continuation of a
Default or an Event of Default or Hedge Default, if the Authorized
Representative of the applicable Credit Document under which such Default, Event
of Default or Hedge Default has occurred desires that the Collateral Agent take
action with respect to the Collateral, then such Authorized NYDOCS01/1212479.10
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Representative shall give to the Collateral Agent, the Controlling Authorized
Representative and each other Authorized Representative written notice of such
Default, Event of Default or Hedge Default, as applicable (a “Notice of
Default”). Each such Notice of Default shall specifically refer to this Section
4.01 and shall describe such Default or Event of Default or Hedge Default in
reasonable detail (including the date of occurrence and a description of the
nature of any remedies such Authorized Representative is entitled to seek as
provided by the applicable Credit Document, the Security Documents, this
Agreement or applicable Law. Upon receipt by the Collateral Agent of any such
notice, it shall promptly send copies thereof to each Authorized Representative.
Section 4.02. Acceleration; Termination. Notwithstanding any provision to the
contrary in this Agreement, (a) the applicable Lenders may, at any time after
the occurrence and during the continuance of an Event of Default under the
Financing Documents, declare the unutilized Commitments terminated and
accelerate the Credit Agreement Obligations in accordance with the terms of the
Credit Agreement, (b) the applicable Additional Secured Parties under any Series
of Additional Credit Obligations may, at any time after the occurrence and
during the continuance of an Event of Default under the applicable Additional
Credit Document, terminate all commitments and accelerate such Additional
Obligations under the applicable Additional Credit Documents, and (c) any
applicable Interest Rate Hedge Bank may at any time after the occurrence and
during the continuance of a Hedge Default cause the early termination of the
relevant Interest Hedging Agreement in accordance with the terms thereof. No
Remedies Instruction will be required to be taken or delivered in respect of
such Event of Default or Hedge Default, as the case may be, prior to the
applicable Lenders, any applicable Additional Secured Parties or any applicable
Interest Rate Hedge Bank, as the case may be, taking such action. Section 4.03.
Instructions Upon Event of Default. (a) At any time, if a Remedies Event of
Default has occurred and is continuing and has not been rescinded or waived, the
Controlling Authorized Representative and the Required Voting Parties shall have
the exclusive right to give the Collateral Agent a Remedies Instruction in
respect of such Remedies Event of Default. The Collateral Agent shall follow the
directions of the Required Voting Parties with respect to the time, method and
place of taking any action requested. The Collateral Agent shall be entitled to
rely conclusively on, without independent verification, any written
certification from any Authorized Representative that from time to time
certifies to the Collateral Agent that (i) it is the Controlling Authorized
Representative and (ii) it has the exclusive right to deliver a Remedies
Instruction. (b) If the Collateral Agent has received a copy of a Remedies
Instruction from the Required Voting Parties and has not received written notice
from the Required Voting Parties that such Remedies Instruction has been
withdrawn, the Collateral Agent shall have the right, on behalf of the Secured
Parties, to take any and all actions and to exercise any and all rights,
remedies and options that it may have under any of the Security Documents
(including any direction contained in the Remedies Instruction or in a separate
instrument in writing executed and delivered to the Collateral Agent); provided,
that, if requested by the Collateral Agent, the Collateral Agent shall have
received adequate security or indemnity as provided in Section 2.02(c). (c) The
Collateral Agent shall not be obligated to follow any Remedies Instruction
received pursuant to Section 4.03(a) or otherwise under the Security Documents
to the extent the Collateral Agent has received an opinion of independent
counsel addressed to it to the effect that such Remedies Instruction appear to
be in conflict with any applicable Law or this Agreement or any other Credit
Document or could result in the Collateral Agent's being subject to (i) criminal
liability or (ii) civil liability or civil litigation for which it has not
received adequate indemnity under Section 2.02(c) in any jurisdiction in
question; provided, however, under no circumstances shall the Collateral Agent
be liable NYDOCS01/1212479.10 S-20 Puget- Amended and Restated Collateral Agency
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for acting or refraining from acting in accordance with the Remedies Instruction
of the Required Voting Parties. Section 4.04. Remedies. (a) No remedy conferred
upon or reserved to the Collateral Agent in this Agreement or in the other
Credit Documents is intended to be exclusive of any other remedy or remedies,
but every such remedy shall be cumulative and shall be in addition to every
other remedy conferred in this Agreement or in the other Credit Documents or now
or hereafter existing at law or in equity or by statute. (b) No delay or
omission of the Collateral Agent to exercise any right, remedy or power accruing
upon any Event of Default or Hedge Default shall impair any such right, remedy
or power or shall be construed to be a waiver of or acquiescence in any Event of
Default or Hedge Default. Every right, power and remedy given by this Agreement,
any Security Document or any other Credit Document to the Collateral Agent may
be exercised from time to time and as often as may be deemed expedient by the
Collateral Agent. (c) All suits or proceedings to assert claims upon or under
this Agreement and the other Credit Documents to which the Collateral Agent is a
party shall be brought by the Collateral Agent in its name as Collateral Agent
and any recovery of judgment shall be held as part of the Collateral. Section
4.05. Distribution of Collateral Proceeds. (a) Application of Proceeds. Except
as otherwise herein expressly provided, the proceeds of any collection, sale or
other realization of all or any part of the Collateral pursuant hereto and the
Security Documents, and any other cash at the time held by the Collateral Agent
under this Article 4, shall be applied by the Collateral Agent: First, to the
payment of the costs and expenses of such exercise of remedies, including
reasonable out-of-pocket costs and expenses of the Agents, the reasonable fees
and expenses of their agents and counsel and all other reasonable expenses
incurred and advances made by the Agents in that connection; Next, to the
payment in full of the remaining Secured Obligations equally and ratably in
accordance with their respective amounts then due and owing in respect of the
Credit Documents, or as the Secured Parties holding the same may otherwise
unanimously agree; and Finally, subject to the rights of any other holder or
holders of any Lien on the relevant Collateral, to the payment to the Borrower,
or its respective successors or assigns, or as a court of competent jurisdiction
may direct, of any surplus then remaining. (b) Borrower Remains Obligated. No
sale or other disposition of all or any part of the Collateral pursuant to the
Security Documents shall be deemed to relieve the Borrower of its obligations
under any Credit Document to which it is a party except to the extent the
proceeds thereof are applied to the payment of the Secured Obligations. (c) As
used in this Section 4.05, “proceeds” of the Collateral means cash, securities
and other property realized in respect of, and distributions in kind of, the
Collateral, including any securities entitlements and such proceeds of the
Collateral received under any reorganization, liquidation or adjustment of debt
of the Borrower on any of the Collateral, it being understood and agreed by each
of the parties hereto that any such “proceeds” in respect of funds or property
credited to the Lock-Up NYDOCS01/1212479.10 S-21 Puget- Amended and Restated
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Account shall be the sole and exclusive Collateral of the Lenders and shall be
applied solely toward payment of the Credit Agreement Obligations in accordance
with the applicable provisions of the Finance Documents. (d) If any Authorized
Representative or any holder of any Secured Obligation collects or receives any
proceeds of such foreclosure, collection or other enforcement that should have
been applied to the payment of the Secured Obligations in accordance with clause
(a) of Section 4.05, whether after the commencement of an Insolvency or
Liquidation Proceeding or otherwise, such Authorized Representative or such
Secured Party, as the case may be, will forthwith deliver the same to the
Collateral Agent, for the account of all Secured Parties, to be applied in
accordance with clause (a) of Section 4.05. Until so delivered, such proceeds
will be held by that Authorized Representative or that Secured Party, as the
case may be, for the benefit of all Secured Parties. (e) This Section 4.05 is
intended for the benefit of, and will be enforceable as a third party
beneficiary by, each present and future Secured Party, each present and future
Authorized Representative and the Collateral Agent as holder of the Liens. (f)
In connection with the application of proceeds pursuant to clause (a) of Section
4.05, except as otherwise directed by the Required Voting Parties, the
Collateral Agent may sell any non- cash proceeds for cash prior to the
application of the proceeds thereof. (g) If, in any Insolvency or Liquidation
Proceeding, the Collateral Agent’s security interest under the Security
Documents is enforced with respect to some, but not all, of the Secured
Obligations then outstanding, the Collateral Agent shall nonetheless apply the
proceeds of the Collateral for the benefit of each Secured Party in the
proportions and subject to the priorities specified herein. To the extent that
the Collateral Agent distributes proceeds collected with respect to Secured
Obligations held by one Secured Party or on behalf of Secured Obligations held
by a second holder, the first holder shall be deemed to have purchased a
participation in the Secured Obligations held by the second holder, or shall be
subrogated to the rights of the second holder to receive any subsequent payments
and distributions made with respect to the portion thereof paid or to be paid by
the application of such proceeds. Section 4.06. Sharing. The parties hereto
expressly acknowledge and agree that it is the intention of the Secured Parties,
in committing to extend and in extending credit to the Borrower, that the
proceeds of the Collateral and the proceeds of any action taken pursuant to a
Remedies Instruction are to be distributed equally among the Secured Parties pro
rata according to the percentage of the aggregate Secured Obligations held by
each such Secured Party and, in each case such proceeds shall be distributed,
applied or disposed of in accordance with this Article 4, and the Secured
Parties, as among themselves, agree that, except as otherwise expressly provided
herein, such proceeds shall be distributed on such basis. Section 4.07.
Insolvency or Liquidation Proceedings. (a) In any Insolvency or Liquidation
Proceeding and prior to the Discharge of Obligations, the Collateral Agent
(acting at the direction of the Required Voting Parties) on behalf of all
Secured Parties and Authorized Representatives, may consent to any order: (i)
for use of cash collateral; (ii) approving a debtor-in-possession financing
secured by a Lien upon any property of the estate in such Insolvency or
Liquidation Proceeding; NYDOCS01/1212479.10 S-22 Puget- Amended and Restated
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(iii) granting any relief on account of Secured Obligations as adequate
protection (or its equivalent) for the benefit of the Secured Parties in the
Collateral subject to Liens granted to the Collateral Agent, for the benefit of
the Secured Parties (it being understood that payments or distributions
comprised of any such adequate protection shall not constitute “proceeds” of
Collateral for purposes of Section 4.05(c) or otherwise); or (iv) relating to a
sale of assets of any Loan Party that provides, to the extent the Collateral
sold is to be free and clear of Liens, that all Liens granted to the Collateral
Agent, for the benefit of the Secured Parties will attach to the proceeds of the
sale; provided, however, that any Secured Party shall retain the right to object
to any cash collateral, debtor-in- possession financing or adequate protection
order to the extent such order provides for priming of Liens over any Collateral
if the terms thereof, including the terms of adequate protection (if any)
granted to the Secured Parties in connection therewith, do not provide for
materially equal treatment to all Secured Parties. (b) Unless at the direction
of, or as consented to by, the Required Voting Parties, the Secured Parties will
not file or prosecute in any Insolvency or Liquidation Proceeding any motion for
adequate protection (or any comparable request for relief) based upon their
interest in the Collateral under the Liens granted to the Collateral Agent, for
the benefit of the Secured Parties, except that, without any action by the
Required Voting Parties, they may vote their claims in respect of the Series of
Secured Obligations owed to them in connection with, and have their right to
object to, the confirmation of any plan of reorganization or similar dispositive
restructuring plan to the extent any such action is not inconsistent with their
obligations under this Agreement. (c) If any Secured Party is required in any
Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay
to the estate of the Borrower or any Loan Party for any reason, including
without limitation, because it was found to be a fraudulent or preferential
transfer, any amount paid in respect of the Secured Obligations, whether
received as proceeds of security, enforcement of any right of set-off or
otherwise, then such Secured Party shall be entitled to a reinstatement of the
Secured Obligations with respect to all such recovered amounts. In such event,
(i) the Discharge of Secured Obligations or Discharge of Credit Agreement
Obligations, as applicable, shall be deemed not to have occurred and (ii) if
this Agreement shall have been terminated prior to such recovery or avoidance
action, this Agreement shall be reinstated in full force and effect, and such
prior termination shall not diminish, release, discharge, impair or otherwise
affect the obligations of the parties hereto from such date of reinstatement.
Article 5. Rights of Collateral Agent. Section 5.01. (a) The Collateral Agent
may execute any of its duties under any Security Document by or through agents,
sub-agents or attorneys-in-fact and shall be entitled to rely on the advice of
counsel (including counsel to the Borrower) concerning all matters pertaining to
such duties. The Collateral Agent shall not be responsible for the negligence or
misconduct of any agent or sub-agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct (as determined in the final
judgment of a court of competent jurisdiction). (b) Neither the Collateral Agent
nor its Affiliates nor any of their respective officers, directors, employees,
agents or attorneys-in-fact shall be (i) liable to any of the Secured Parties
for any action lawfully taken or omitted to be taken by it hereunder or under or
in connection with any Security Document (except for its gross negligence,
willful misconduct or unlawful acts, as determined by the final judgment of a
court of competent jurisdiction, in connection with its duties expressly set
forth herein), or NYDOCS01/1212479.10 S-23 Puget- Amended and Restated
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(ii) responsible in any manner to any of the Secured Parties for any recitals,
statements, representations or warranties made by the Borrower or any other Loan
Party or any representative of any thereof contained in any Credit Document or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Collateral Agent under or in connection with, any
Credit Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of the Credit Documents, or the perfection or
priority of any Lien or security interest created or purported to be created
under the Security Documents, or for any failure of the Borrower or any other
Loan Party to perform their obligations thereunder. The Collateral Agent as such
shall not be under any obligation to any Secured Party to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, any Credit Document or to inspect the properties, books or
records of the Borrower or any other Loan Party. (c) The Collateral Agent shall
be entitled to rely conclusively, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, electronic mail message, telex or teletype message, statement, order
or other document believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Collateral Agent. The Collateral
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Credit Document in accordance with a
request or consent of the Required Voting Parties and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Secured Parties. (d) The Borrower agrees to pay, within 15 days after written
demand, to the Collateral Agent the amount of any and all reasonable and
documented out-of-pocket expenses, including the reasonable and documented
Attorney Costs of one New York counsel and one local state counsel in each other
applicable jurisdiction, and the reasonable costs of any experts and agents
which the Collateral Agent may reasonably incur in connection with (i) the
administration of the Security Documents, (ii) the custody or preservation of,
or the sale of, collection from, or other realization upon, any of the
Collateral, (iii) the exercise or enforcement (whether through negotiations,
legal proceedings or otherwise) of any of the rights of the Collateral Agent or
the Secured Parties under any of the Security Documents or (iv) the failure by
the Borrower, any other Loan Party or any Affiliate thereof to perform or
observe any of the provisions of the Security Documents. (e) Whether or not the
transactions contemplated hereby are consummated, the Secured Parties shall
indemnify upon demand the Collateral Agent (to the extent the Collateral Agent
is required to be but is not reimbursed by or on behalf of the Loan Parties and
without limiting the obligation of the Loan Parties to do so), pro rata (at the
time such indemnity is sought), and hold harmless the Collateral Agent from and
against any and all Indemnified Liabilities incurred by it; provided that no
Secured Party shall be liable for the payment to the Collateral Agent of any
portion of such Indemnified Liabilities resulting from the gross negligence or
willful misconduct of the Collateral Agent as determined by the final judgment
of a court of competent jurisdiction; provided further that no action taken in
accordance with the directions of the Controlling Authorized Representative or
the Required Voting Parties shall be deemed to constitute gross negligence or
willful misconduct for purposes of this Section 5.01(e). In the case of any
investigation, litigation or proceeding giving rise to any Indemnified
Liabilities, this Section 5.01(e) applies whether any such investigation,
litigation or proceeding is brought by any Secured Party or any other Person.
The undertaking in this Section 5.01(e) shall survive termination of the Secured
Obligations, the payment of all other Obligations and the resignation of the
Collateral Agent. (f) Whether or not the transactions contemplated hereby are
consummated, the Borrower shall indemnify and hold harmless the Collateral Agent
(“Indemnified Secured Party”) from NYDOCS01/1212479.10 S-24 Puget- Amended and
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and against any and all liabilities, obligations, losses, damages, penalties,
claims, demands, actions, judgments, suits, costs, expenses and disbursements
(including Attorney Costs) of any kind or nature whatsoever which may at any
time be imposed on, incurred by or asserted against the Indemnified Secured
Party in any way relating to or arising out of or in connection with (a) the
execution, delivery, enforcement, performance or administration of any Credit
Document or any other agreement, letter or instrument delivered in connection
with the transactions contemplated thereby, (b) any Commitment or Loan or the
use or proposed use of the proceeds therefrom, or (c) any actual or alleged
presence or release of Hazardous Materials on or from any property currently or
formerly owned or operated by the Borrower or any Subsidiary, or any
Environmental Liability related in any way to the Borrower or any Subsidiary, or
(d) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory (including any investigation of, preparation for or defense of any
pending or threatened claim, investigation, litigation or proceeding), in all
cases, whether or not caused by or arising, in whole or in part, out of the
negligence of the Indemnified Secured Party; provided that such indemnity shall
not, as to the Indemnified Secured Party, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements resulted from the gross
negligence, bad faith or willful misconduct of the Indemnified Secured Party.
Neither the Indemnified Secured Party nor the Borrower shall have any liability
for any special, punitive, indirect or consequential damages relating to this
Agreement or any other Credit Document or arising out of its activities in
connection herewith or therewith (whether before or after the Financial Closing
Date). In the case of an investigation, litigation or other proceeding to which
the indemnity in this Section 5.01(f) applies, such indemnity shall be effective
whether or not any of the transactions contemplated hereunder or under any of
the other Credit Documents is consummated. All amounts due under this Section
5.01(f) shall be paid within ten (10) Business Days after demand therefor. The
agreements in this Section 5.01(f) shall survive the resignation of the
Collateral Agent, the replacement of any Secured Party, the termination of any
Secured Obligation and the repayment, satisfaction or discharge of all the other
Obligations. (g) Each Secured Party acknowledges that no Agent-Related Person
has made any representation or warranty to it, and that no act by any Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of the Borrower or any Affiliate thereof, shall be deemed
to constitute any representation or warranty by any Agent-Related Person to any
Secured Party as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Secured Party
represents to each Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower Group, and all applicable bank or other
regulatory Laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Borrower
under the Credit Documents. Each Secured Party also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Credit Documents, and to
make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Secured Parties by any Agent
herein, such Agent shall not have any duty or responsibility to provide any
Secured Party with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Borrower or any of its Affiliates which may come into
the possession of any Agent-Related Person. (h) Barclays Bank PLC and its
Affiliates may make loans to, accept deposits from, acquire Equity Interests in
and generally engage in any kind of banking, trust, financial advisory,
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underwriting or other business with the Borrower and its Affiliates as though
Barclays Bank PLC were not the Collateral Agent hereunder and without notice to
or consent of the Secured Parties. The Secured Parties acknowledge that,
pursuant to such activities, Barclays Bank PLC or its Affiliates may receive
information regarding the Borrower or its Affiliates (including information that
may be subject to confidentiality obligations in favor of the Borrower or such
Affiliates) and acknowledge that the Collateral Agent shall be under no
obligation to provide such information to them. Article 6. Resignation or
Removal of the Collateral Agent. The Collateral Agent may resign as Collateral
Agent upon ten days' notice to each of the Authorized Representatives and the
Borrower and may be removed at any time with or without cause by the Required
Voting Parties, with any such resignation or removal to become effective only
upon the appointment of a successor collateral agent under this Article 6. If
the Collateral Agent shall resign or be removed as Collateral Agent, then the
Facility Agent and the Required Voting Parties shall (and if no such successor
shall have been appointed within 30 days of the Collateral Agent's notice of
resignation or removal, the Collateral Agent may) appoint a successor collateral
agent for the Secured Parties, which successor collateral agent (so long as no
Default or Hedge Default has occurred and is continuing) shall be reasonably
acceptable to the Borrower, whereupon such successor collateral agent shall
succeed to the rights, powers and duties of the Collateral Agent, and the term
“Collateral Agent” shall mean such successor collateral agent effective upon its
appointment, and the former Collateral Agent's rights, powers and duties as
Collateral Agent shall be terminated, without any other or further act or deed
on the part of such former Collateral Agent (except that the former Collateral
Agent shall deliver all Collateral then in its possession to such successor
collateral agent and execute such documents and instruments as may be necessary
to transfer the Liens of record under the Security Documents in favor of the
Collateral Agent to such successor collateral agent) or any of the other Secured
Parties. After resignation or removal hereunder as collateral agent, the
provisions of this Agreement shall inure to the former Collateral Agent's
benefit, and continue to be binding upon the former Collateral Agent, as to any
actions taken or omitted to be taken by it while it was Collateral Agent.
Article 7. No Impairments of Other Rights. Nothing in this Agreement is intended
or shall be construed to impair, diminish or otherwise adversely affect any
other right the Secured Parties may have or may obtain against the Borrower or
any other Loan Party. Article 8. Termination. This Agreement shall remain in
full force and effect until the Discharge of Secured Obligations has occurred.
Article 9. Miscellaneous. Section 9.01. Waiver. No failure on the part of the
Collateral Agent or the other Secured Parties to exercise and no delay in
exercising, and no course of dealing with respect to, any right, remedy, power
or privilege under this Agreement shall operate as a waiver of such right,
remedy, power or privilege, nor shall any single or partial exercise of any
right, remedy, power or privilege under this Agreement preclude any other or
further exercise of any such right, remedy, power or privilege or the exercise
of any other right, remedy, power or privilege. The rights, remedies, powers and
privileges provided in this Agreement are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law. NYDOCS01/1212479.10
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Section 9.02. Notices. All notices and communications to be given under this
Agreement shall be given or made in writing to the intended recipient at the
address specified below or, as to any party hereto, at such other address as
shall be designated by such party in a notice to each other party hereto. Except
as otherwise provided in this Agreement, all such written notices shall be
mailed, faxed or delivered to the applicable address, facsimile number or
electronic mail address. All such notices and other communications shall be
deemed to be given or made upon the earlier to occur of (i) actual receipt by
the relevant party hereto and (ii) (A) if delivered by hand or by courier, when
signed for by or on behalf of the relevant party hereto; (B) if delivered by
mail, four (4) Business Days after deposit in the mails, postage prepaid; (C) if
delivered by facsimile, when sent and receipt has been confirmed by telephone;
and (D) if delivered by electronic mail, when delivered and receipt has been
confirmed by telephone: To the Borrower: Puget Energy Inc. Level 22, 125 West
55th Street New York, NY 10019 Attention: Christopher Leslie Phone: (212)
231-1686 Facsimile: (212) 231-1828 Email: Christopher.Leslie@macquarie.com To
the Facility Agent: Barclays Bank PLC 745 Seventh Avenue New York, NY 10019
Phone: 212-412-3752 Fax: 212-412-7600 Attention: Ann Sutton To the Collateral
Agent: Barclays Bank PLC 745 Seventh Avenue New York, NY 10019 Phone:
212-526-1126 Fax: 212-526-5115 Attention: Ann Sutton To each Interest Rate Hedge
Bank: As set forth on the signature page hereto or in the Joinder Agreement to
which such Interest Rate Hedge Bank is a party. NYDOCS01/1212479.10 S-27 Puget-
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To each Additional Secured Party: As set forth in the Joinder Agreement to which
such Additional Secured Party is a party. Section 9.03. Amendments, Etc. (a)
Subject to Section 3.03(c) and Section 3.06, no provision of this Agreement may
be modified, supplemented or waived except by an instrument in writing duly
executed by the Collateral Agent acting at the direction of the Required Voting
Parties; provided, however, (i) no amendment, waiver or consent shall become
effective without the prior written consent of the Required Voting Parties and
the Authorized Representative for the affected Series of Secured Obligations if
such amendment, waiver or consent (w) has the effect of changing the definition
of “Required Voting Parties”, the percentage or composition of Secured Parties
required to vote on a matter or this clause (a)(i)(w)), (x) adversely affects
the relative priority of payment due to any Secured Party under the Credit
Documents, whether by way of enforcement or realization on Collateral or
otherwise (including, without limitation, the priorities set forth in Section
4.05), (y) has the effect of changing Section 4.06, or (z) materially adversely
affects any Series of Secured Obligations disproportionately as compared to
other Series of Secured Obligations, (ii) no amendment, waiver or consent that
has the effect of changing the definition of “Unanimous Voting Parties” or
Section 2.07(d) may be effectuated without the prior written consent of the
Unanimous Voting Parties and (iii) no amendment, waiver or consent that affects
the material rights and duties of the Borrower shall be effective without the
prior written consent of the Borrower. (b) No amendment waiver or consent
(including, without limitation, any Intercreditor Vote) of Macquarie Affiliates
in such Person’s capacity as a Lender or Participant (each a “Creditor Side
Person”), shall be effective (x) except, with respect to Loans and Commitments
not in excess of $50,000,000 in the aggregate at any time and (y) unless each
such Person has in place a Wall between such Creditor Side Person and any
Persons authorized to take action on behalf of the Borrower (such Persons,
“Borrower Side Persons”) such that information is not shared between a Creditor
Side Person and Borrower Side Persons (other than on arm's-length, third party
terms) and decisions of Creditor Side Persons are made, and actions taken,
independent of considerations of Borrower Side Persons. Any such modification,
supplement or waiver shall be for such period and subject to such conditions as
shall be specified in the instrument effecting the same and shall be binding
upon the Collateral Agent and each of the other parties hereto, and any such
waiver shall be effective only in the specific instance and for the purposes for
which given. For purposes hereof, “Wall” shall mean with respect to any Creditor
Side Person and Borrower Side Person, such Persons (1) do not have interlocking
officers, directors or employees, (2) have separate offices and information
systems such that a Creditor Side Person does not have access to non-public
information in the possession of a Borrower Side Person (and vice versa), and
(3) have a formalized process or procedure prohibiting the disclosure of
non-public information to the other such Person. A Creditor Side Person shall
provide reasonable evidence of the Wall upon the reasonable request of a Secured
Party or the Collateral Agent. Section 9.04. Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Collateral Agent, the Secured Parties and their respective successors and
permitted assigns. The Collateral Agent may assign or transfer its rights under
this Agreement to any of its Affiliates without the prior written consent of any
party hereto; provided, that the Collateral Agent shall notify the Borrower in
writing of such assignment or transfer promptly following the effectiveness
thereof. Neither the Borrower nor the Parent may assign or transfer its rights
or obligations hereunder. Section 9.05. Survival. All representations and
warranties made in this Agreement or in any certificate or other document
delivered pursuant to or in connection with this Agreement shall
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survive the execution and delivery of this Agreement or such certificate or
other document (as the case may be) or any deemed repetition of any such
representation or warranty. Section 9.06. Severability. Any provision of this
Agreement that is prohibited or becomes unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction, and the parties hereto shall enter into good faith negotiations to
replace such prohibited or unenforceable provision. Section 9.07. Counterparts.
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed and delivered, shall be effective for purposes of binding the parties
hereto, but all of which together shall constitute one and the same instrument.
Section 9.08. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. (a)
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK. (b) ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS
AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, OR THE
TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, EACH AGENT AND EACH
SECURED PARTY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, EACH AGENT AND EACH
SECURED PARTY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR OTHER DOCUMENT RELATED HERETO. (c)
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR
ANY SECURITY DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS
AGREEMENT, THE SECURITY DOCUMENTS, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION 9.08(C) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. Section
9.09. Joinder. (a) Each Lender that becomes a “Lender” under the Credit
Agreement (in accordance with the provisions of Section 10.07(b) of the Credit
Agreement) after the date NYDOCS01/1212479.10 S-29 Puget- Amended and Restated
Collateral Agency Agreement 07771-0276/LEGAL16959722.4 5/4/10

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hereof shall become a party to this Agreement upon its execution of an
Assignment and Assumption Agreement contemplated by such Section 10.07. (b) The
Borrower may designate additional obligations as Additional Secured Obligations
from time to time only if the incurrence of such obligations and the grant of
Liens securing such obligations is permitted under each of the Credit Agreement
and each other Additional Credit Document then in effect and this Agreement. If
so permitted, the Borrower shall only effect such designation by: (i) delivering
to the Collateral Agent and each Authorized Representative, written notice from
an Authorized Officer certifying: (1) that the Borrower intends to incur
additional obligations which shall constitute Additional Secured Obligations,
and specifying the agreement pursuant to which such obligations will be incurred
and designating such agreement as an “Additional Credit Document” hereunder; and
(2) as to the specific name and address of the Authorized Representative for
such Series of Additional Secured Obligations; and (ii) causing the Authorized
Representative to execute and deliver to the Collateral Agent and each other
Authorized Representative, a Joinder Agreement, which shall be acknowledged and
approved by an Authorized Officer of the Borrower. (c) Each notice given by an
Authorized Officer pursuant to Section 9.09(b) shall constitute a representation
and warranty by the Borrower that the incurrence of the Additional Secured
Obligations and the grant of Liens securing such obligations are permitted under
each of the Credit Agreement and each Additional Credit Document then in effect
and this Agreement. In signing a Joinder Agreement, the Collateral Agent and
each Authorized Representative shall be entitled to rely, without inquiry or
investigation, upon such representation and warranty. The Collateral Agent shall
not execute and deliver any Joinder Agreement unless and until such Joinder
Agreement has been executed and delivered by the Borrower, the Parent and the
Authorized Representative for such Additional Secured Obligations. Section 9.10.
Specific Performance. Each Secured Party may demand specific performance of this
Agreement. Each party hereto irrevocably waives any defense based on the
adequacy of a remedy at law and any other defense which might be asserted to bar
the remedy of specific performance in any action which may be brought by any
other Secured Party. Section 9.11. Agreement for Benefit of Parties Hereto.
Except for the Secured Parties and their respective successors and permitted
assigns, nothing in this Agreement, express or implied, is intended or shall be
construed to confer upon, or to give to, any Person other than the parties
hereto and their respective successors and permitted assigns, and Persons for
whom the parties hereto are acting as agents or representatives, any right,
remedy or claim under or by reason of this Agreement or any covenant, condition
or stipulation hereof; and the covenants, stipulations and agreements contained
in this Agreement are and shall be for the sole and exclusive benefit of the
parties hereto and their respective successors and permitted assigns and Persons
for whom the parties hereto are acting as agents or representatives. Section
9.12. Integration. This Agreement constitutes the entire agreement and
understanding among the parties to this Agreement with respect to the matters
covered by this Agreement NYDOCS01/1212479.10 S-30 Puget- Amended and Restated
Collateral Agency Agreement 07771-0276/LEGAL16959722.4 5/4/10

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and supersedes any and all prior agreements and understandings, written or oral,
with respect to such matters. Section 9.13. Original Schedules and Exhibits.
Except as otherwise expressly modified by this Agreement, each of the Schedules,
Exhibits and Appendices attached to the Collateral Agency Agreement, dated as of
February 6, 2009 between the parties hereto, shall be deemed attached to, and
form a part of, this Agreement without any amendment, modification or
supplement. [Signature Pages Follow.] NYDOCS01/1212479.10 S-31 Puget- Amended
and Restated Collateral Agency Agreement 07771-0276/LEGAL16959722.4 5/4/10

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APPENDIX A FORM OF JOINDER AGREEMENT Reference is made to that certain Amended
and Restated Collateral Agency Agreement, dated as of March 31, 2010 (the
“Collateral Agency Agreement”), among PUGET ENERGY INC., a Washington
corporation, BARCLAYS BANK PLC, as Facility Agent, BARCLAYS BANK PLC, as
Collateral Agent and the other parties thereto. The undersigned is party to
[DESCRIBE INTEREST HEDGING AGREEMENT/ADDITIONAL CREDIT DOCUMENT]. Pursuant to
the terms of [Section 3.03(b)] / [Section 9.09(b)] of the Collateral Agency
Agreement, the undersigned hereby agrees to be bound by the Collateral Agency
Agreement as an [“Interest Rate Hedge Bank”] / [Additional Secured Party]
thereunder. Dated: _____________ [Insert Name of Party to be Added] By: Name:
Title: Address for Notices: Attn: [____________] Tel No.: [____________] Fax
No.: [____________] PUGET- AMENDED AND RESTATED COLLATERAL AGENCY AGREEMENT
07771-0276/LEGAL16959722.4 5/4/10

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EXECUTION COPY AMENDMENT NO. 1 TO AMENDED AND RESTATED COLLATERAL AGENCY
AGREEMENT This AMENDMENT NO. 1 TO AMENDED AND RESTATED COLLATERAL AGENCY
AGREEMENT (this “Amendment”), is made as of February 10, 2012, by JPMORGAN CHASE
BANK, N.A. (“JPMorgan”), in its capacity as successor Collateral Agent.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings given to them in the Amended and Restated Collateral Agency
Agreement referred to below. WHEREAS, Puget Energy, Inc., as successor to Puget
Merger Sub Inc. (the “Borrower”), is party to that certain Credit Agreement,
dated as of May 16, 2008, among the financial institutions from time to time
party thereto as lenders and Barclays Bank PLC, as facility agent (as amended,
restated, supplemented or otherwise modified prior to the date hereof, the
“Existing Credit Agreement”); WHEREAS, the Borrower, is party to that certain
Amended and Restated Collateral Agency Agreement, dated as of February 6, 2009
and as amended and restated as of March 31, 2010, among Puget Equico LLC,
Barclays Bank PLC, as collateral agent and Barclays Bank PLC, as facility agent
(as amended, restated, supplemented or otherwise modified prior to the date
hereof, the “Agreement”); WHEREAS, on or about the date hereof, the Borrower
repaid in full all of its Obligations (as defined therein) under the Existing
Credit Agreement; WHEREAS, on the date hereof, the Borrower entered into that
certain Credit Agreement among the financial institutions from time to time
party thereto as Lenders and JPMorgan Chase Bank, N.A., as administrative agent
(the “Administrative Agent”) (as amended, restated, supplemented or otherwise
modified, the “Credit Agreement”); WHEREAS, pursuant to Section 2.06 of the
Agreement, the Lenders signatory hereto and the Administrative Agent became (i)
parties to the Agreement and (ii) the Required Voting Parties upon the execution
of the Credit Agreement; WHEREAS, pursuant to Article 6 of the Agreement,
Barclays Bank PLC resigned as Collateral Agent as of the date hereof; WHEREAS,
in accordance with Article 6 of the Agreement, the Lenders and the
Administrative Agent, which constitute the Required Voting Parties, have (i)
appointed JPMorgan Chase Bank, N.A., as successor Collateral Agent and (ii)
directed the Collateral Agent to enter into this Amendment in that certain
Credit Agreement, dated as of the date hereof, by and among Borrower, the
Lenders (as defined therein) from time to time party thereto and JPMorgan Chase
Bank, N.A., as Administrative Agent (as defined therein); and NOW THEREFORE, in
consideration of the premises set forth above, the terms and conditions
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto have agreed to
enter into this Amendment. SECTION 1. Amendments to Agreement. (a) The first
whereas clause of the Agreement is amended and restated in its entirety to read
as follows:

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WHEREAS, the Company (in such capacity, the “Borrower”) has entered into that
certain Credit Agreement, dated as of February 10, 2012, among the financial
institutions from time to time parties thereto as lenders and JPMorgan Chase
Bank, N.A., as the administrative agent (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”);
(b) Section 1.02 of the Agreement is amended to add the following new
definitions therein in the appropriate alphabetical order: “Financing Documents”
shall have the meaning specified in the Credit Agreement or, if applicable, any
Replacement Credit Agreement; provided, solely with respect to any Replacement
Credit Agreement, shall mean, if necessary, any analogous defined term used in
place thereof in the Replacement Credit Agreement. “Pledge Agreement” means the
Amended and Restated Pledge Agreement, dated as of February 6, 2009 and amended
and restated as of May 10, 2010, from Puget Equico LLC, as pledgor to Collateral
Agent (as amended, restated, supplemented or otherwise modified from time to
time) “Restricted Lender Affiliate” shall have the meaning specified in the
Credit Agreement. “Security Agreement” means the Amended and Restated Borrower
Security Agreement, dated as of February 6, 2009 and as amended and restated as
of May 10, 2010 and as further amended as of February 10, 2012, between the
Borrower and the Collateral Agent (as amended, restated, supplemented or
otherwise modified from time to time) (c) The definitions of “Lock-up Account”
and “Macquarie Affiliates” appearing in Section 1.02 of the Agreement are
deleted in their entirety. (d) Clause (b) of Section 2.02 of the Agreement is
amended and restated in its entirety to read as follows: “[Reserved]”. (e)
Clause (a) of Section 2.05 of the Agreement is amended to (i) delete the phrase
“Secured Document” appearing therein and to replace such phrase with the phrase
“Security Document” and (ii) delete in its entirety the phrase “, the Facility
Agent’s and a Lender’s right to receive its ratable share of any amounts
maintained in the Lock-Up Account,” appearing therein. (f) Clause (b) of Section
2.05 of the Agreement is amended to delete in its entirety the proviso appearing
therein. (g) Clause (a) of Section 2.06 of the Agreement is amended to insert
the phrase “, which, for the avoidance of doubt, shall include any analogous
administrative capacity utilized in place thereof in any Replacement Credit
Agreement,” immediately following the phrase “Collateral set forth herein, and
the new facility agent” appearing therein. (h) Clause (a) of Section 3.01 of the
Agreement is amended to delete the phrase “any provisions of any Credit
Documents” appearing therein and replace such phrase with the phrase “any
provision of any Credit Document”. 2

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(i) Clause (c) of Section 3.03 of the Agreement is amended to (i) delete the
section reference “Section 10.01” appearing therein and replace such section
reference with the section reference “Section 9.02” and (ii) delete the phrase
“Macquarie Affiliates” appearing therein and replace such phrase with the phrase
“Restricted Lender Affiliate”. (j) Clause (c) of Section 4.05 of the Agreement
is amended to delete in its entirety the phrase “it being understood and agreed
by each of the parties hereto that any such “proceeds” in respect of funds or
property credited to the Lock-Up Account shall be the sole and exclusive
Collateral of the Lenders and shall be applied solely toward payment of the
Credit Agreement Obligations in accordance with the applicable provisions of the
Finance Documents” appearing therein. (k) Section 9.02 of the Agreement is
amended to delete in its entirety the address appearing under the headings “To
the Borrower” and to replace such address with the following address: Puget
Energy, Inc. 10885 NE 4th Street, Suite 1200 Bellevue, WA 98004-5591 Phone:
(425) 462-3870) Facsimile: (424) 462-3300 Attention: Vice President Finance and
Treasurer (l) Section 9.02 of the Agreement is amended to delete in their
entirety the addresses appearing under the headings “To the Facility Agent” and
“To the Collateral Agent” and to replace such addresses with the following
address: JPMorgan Chase Bank 10 S. Dearborn Street, 7th Flood Chicago, IL 60603
Phone: (312) 385-7025 Facsimile: (888) 292-9533 Attention: Nan Wilson (m) Clause
(b) of Section 9.03 of the Agreement is amended and restated in its entirety to
read as follows: (b) Notwithstanding the foregoing, no waiver or consent of any
Restricted Lender Affiliate shall be required for any amendment, waiver or other
modification to this Agreement pursuant to the terms of this Section 9.03. For
the avoidance of doubt, the foregoing shall not apply to any assignee of, or
Person that purchases participations from, a Restricted Lender Affiliate, other
than an assignee or Participant that constitutes a Restricted Lender Affiliate.
The Borrower agrees that upon request by the Collateral Agent, the Borrower
shall promptly (and in any case, not less than 3 Business Days), prior to the
effectiveness of any amendment, waiver or other modification pursuant to this
Section 9.03, provide to the Collateral Agent a list of all Restricted Lender
Affiliates who are, to the Borrower’s knowledge after due inquiry, holding any
Commitments at such time. (n) The Agreement is amended to replace each reference
to “Barclays Bank PLC” with “JPMorgan Chase Bank, N.A.”. 3

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(o) The Agreement is amended to replace each reference to “Facility Agent” with
“Administrative Agent”. (p) Appendix A to the Agreement is deleted in its
entirety and replaced with Exhibit A hereto. SECTION 2. Conditions of
Effectiveness. This Amendment shall become effective as of the date hereof (the
“Effective Date”) when, and only when (i) the Collateral Agent shall have
received an executed counterpart of this Amendment from the Collateral Agent,
the Administrative Agent and each Lender and (ii) the New Credit Agreement shall
become effective in accordance with its terms and conditions. SECTION 3.
Representations and Warranties. Each of the parties hereto represents and
warrants that this Amendment and the Agreement, as amended by this Amendment,
constitute legal, valid and binding obligations of such party enforceable
against such party in accordance with their terms, except as enforceability may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors’ rights generally and general equitable principles. SECTION 4.
Reference to and the Effect on the Agreement. (a) On and after the effective
date of this Amendment, each reference in the Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein” or words of like import referring to the
Agreement and each reference to the Agreement in any certificate delivered in
connection therewith, shall mean and be a reference to the Agreement as amended
hereby. (b) Each of the parties hereto hereby agrees that, except as
specifically amended above, the Agreement is hereby ratified and confirmed and
shall continue to be in full force and effect and enforceable, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors’ rights generally and
general equitable principles. SECTION 5. Headings. Section headings in this
Amendment are included herein for convenience only and shall not constitute a
part of this Amendment for any other purpose. SECTION 6. Execution in
Counterparts. This Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement. Delivery of an
executed counterpart to this Amendment by facsimile, electronic mail, portable
document format (PDF) or similar means shall be effective as delivery of a
manually executed counterpart of this Amendment. SECTION 7. Governing Law. This
Amendment shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York. [REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK] 4

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EXHIBIT A APPENDIX A FORM OF JOINDER AGREEMENT Reference is made to that certain
Amended and Restated Collateral Agency Agreement, dated as of February 6, 2009
and as amended and restated as of March 31, 2010, among PUGET ENERGY, INC., a
Washington corporation, PUGET EQUICO LLC, the other parties from time to time
party thereto and JPMORGAN CHASE BANK, N.A., as successor Collateral Agent (as
amended, restated, supplemented or otherwise modified from time to time, the
“Collateral Agency Agreement”). The undersigned is party to [DESCRIBE INTEREST
HEDGING AGREEMENT/ADDITIONAL CREDIT DOCUMENT]. Pursuant to the terms of [Section
3.03(b)] / [Section 9.09(b)] of the Collateral Agency Agreement, the undersigned
hereby agrees to be bound by the Collateral Agency Agreement as an [“Interest
Rate Hedge Bank”] / [Additional Secured Party] thereunder. Dated: _____________,
20__ [Insert Name of Party to be Added] By: Name: Title: Address for Notices:
Attn: [____________] Tel No.: [____________] Fax No.: [____________]

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EXHIBIT I [FORM OF] INTEREST ELECTION REQUEST [COMPANY NAME/HEADER] To: Mizuho
Bank, Ltd., as Administrative Agent 1800 Plaza Ten, Harborside Financial Center
Jersey City, NJ 07311 Attention of Joyce Raynor Telephone No. (201) 626-9330)
Email: lau_agent@mizuhogroup.com Date: Ladies and Gentlemen: This Interest
Election Request is furnished pursuant to Section 2.08(c) of that certain Term
Loan Agreement, dated as of September 26, 2019 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the “Term Loan
Agreement”), among Puget Energy, Inc., (the “Borrower”), the Lenders from time
to time party thereto and Mizuho Bank, Ltd., as Administrative Agent. Unless
otherwise defined herein, capitalized terms used in this Interest Election
Request have the meanings ascribed thereto in the Term Loan Agreement. The
Borrower is hereby requesting to convert or continue certain Borrowings as
follows: 1. Borrowing to which this Interest Election Request applies:
________________________________ 2. Date of conversion/continuation (must be a
Business Day): __________________, 20____ 2. Amount of Borrowings being
converted/continued: $ _______________ 3. Nature of conversion/continuation: 
a. Conversion of ABR Borrowings to Eurodollar Borrowings  b. Conversion of
Eurodollar Borrowings to ABR Borrowings  c. Continuation of Eurodollar
Borrowings as such 4. If Borrowings are being continued as or converted to
Eurodollar Borrowings, the duration of the new Interest Period that commences on
the conversion/continuation date9: One Week _________ One Month __________ Two
Months _______ Three Months __________ Six Months __________ 9 Shall be subject
to the definition of “Interest Period.” Cannot extend beyond the Maturity Date.
If an Interest Period is not specified, then the Borrower shall be deemed to
have selected an Interest Period of one month’s duration.

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5. The undersigned officer of the Borrower certifies that, both before and after
giving effect to the request above, no Default or Event of Default has occurred
and is continuing under the Agreement. 5

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PUGET ENERGY, INC. By: _______________________ Name: Title:

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EXHIBIT J FORM OF SOLVENCY CERTIFICATE I, [_____________________], the
[_____________________] of Puget Energy, Inc., a Washington corporation, (the
“Borrower”) with responsibility for financial matters of the Borrower, hereby
certify, in my capacity as such and not in my individual capacity, on behalf of
the Borrower that I am the [_____________________] of the Borrower, that I am
familiar with the properties, businesses, assets, finances and operations of the
Borrower Group and that I am duly authorized to execute this Solvency
Certificate on behalf of the Borrower, which is being delivered pursuant to the
Term Loan Agreement, dated as of September 26, 2019 (as amended, amended and
restated, supplemented and/or modified and in effect from time to time, the
“Credit Agreement”), among the Borrower, the Lenders party thereto from time to
time and Mizuho Bank, Ltd., as Administrative Agent. Capitalized terms used
herein but not defined herein shall have the meanings assigned thereto in the
Credit Agreement. In reaching the conclusions set forth in this Solvency
Certificate, I have carefully reviewed the Loan Documents and the contents of
this Solvency Certificate and, in connection herewith, have taken into
consideration all things necessary or material, and I have made appropriate
inquiries and investigation with responsible officers and employees of the
members of the Borrower Group, in order to make the above and the following
certifications. I hereby further certify that: l. To the best of my knowledge,
on the date hereof, immediately after giving effect to the consummation of the
Permitted Acquisition, the fair value of the property of the Borrower and its
Subsidiaries, taken as a whole, is greater than the total amount of liabilities
(including contingent liabilities) of the Borrower and its Subsidiaries. With
respect to any contingent liabilities, the amount of contingent liabilities on
the date hereof shall be computed as the amount that, in light of all of the
facts and circumstances existing on the date hereof, represents the amount that
can reasonably be expected to become an actual or matured liability. 2. To the
best of my knowledge, on the date hereof, immediately after giving effect to the
consummation of the Permitted Acquisition, the present fair saleable value of
the assets of the Borrower and its Subsidiaries, taken as a whole, is not less
than the amount that will be required to pay the probable liabilities of the
Borrower and its Subsidiaries on their debts as they become absolute and
matured. 3. As of the date hereof, neither the Borrower nor any of its
Subsidiaries intends to incur, nor believes that it will incur, including after
giving effect to the consummation of the Permitted Acquisition, debts or
liabilities beyond the ability of the Borrower and its Subsidiaries, taken as
whole, to pay such debts or liabilities as they mature. 4. To the best of my
knowledge, on the date hereof, immediately after giving effect to the
consummation of the Permitted Acquisition, the Borrower and its Subsidiaries,
taken as a whole, is neither engaged in business or in a transaction, nor about
to engage in business or in a transaction, for which the property of the
Borrower and its Subsidiaries, taken as a whole, would constitute unreasonably
small capital. 5. As of the date hereof, after giving effect to the transactions
contemplated by the Permitted Acquisition, the Leverage Ratio is not greater
than 0.65 to 1.00, calculated on the basis of revised financial projections,
prepared in accordance with the methodology of the financial projections
delivered pursuant to Section 5.01 of the Credit Agreement, for the period of
twelve (12) months after the date of the Permitted Acquisition.

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6. As of the date hereof, no Default or Event of Default shall exist immediately
prior to such Permitted Acquisition or, after giving effect to such Permitted
Acquisition, shall have occurred and be continuing, or would result from the
consummation of the proposed Permitted Acquisition. [SIGNATURE PAGE FOLLOWS]

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Dated: ___________________, 20__ PUGET ENERGY, INC. By:
_______________________________ Name: Title: Chief Financial Officer

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EXHIBIT K PLEDGE AGREEMENT [ATTACHED]

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EXECUTION COPY AMENDED AND RESTATED PLEDGE AGREEMENT Dated as of February 6,
2009 as amended and restated as of March 31, 2010 From PUGET EQUICO LLC as
Pledgor to BARCLAYS BANK PLC as Collateral Agent Puget Pledge Agreement
07771-0276/LEGAL16959772.4 5/4/10

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T A B L E O F C O N T E N T S Section Page Section 1. Grant of Security
.................................................................................................................
2 Section 2. Security for Obligations
......................................................................................................
2 Section 3. Pledgor Remains Liable
......................................................................................................
2 Section 4. Delivery and Control of Security Collateral
....................................................................... 3
Section 5. Representations and Warranties
..........................................................................................
3 Section 6. Further Assurances
.............................................................................................................
4 Section 7. Post-Closing Changes; Certain Additional Covenants
....................................................... 5 Section 8. Voting
Rights; Dividends; Etc.
...........................................................................................
6 Section 9. Transfers and Other Liens; Additional Shares
.................................................................... 7 Section
10. Collateral Agent Appointed Attorney-in-Fact
.................................................................... 7 Section
11. Collateral Agent May Perform
............................................................................................
7 Section 12. The Collateral Agent’s Duties
............................................................................................
8 Section 13. Remedies
.............................................................................................................................
8 Section 14. Indemnity and Expenses
.....................................................................................................
9 Section 15. Amendments; Waivers; Etc.
...............................................................................................
9 Section 16. Notices, Etc.
........................................................................................................................
9 Section 17. Continuing Security Interest; Assignments Under the Credit
Agreement .......................... 9 Section 18. Termination
.........................................................................................................................
9 Section 19. Security Interest Absolute
.................................................................................................
10 Section 20. Collateral Agency Agreement Controls
............................................................................ 11
Section 21. Execution in Counterparts
................................................................................................
11 Section 22. Governing Law
.................................................................................................................
11 Section 23. Waiver of Right to Trial by Jury
.......................................................................................
11 i Puget Pledge Agreement 07771-0276/LEGAL16959772.4 5/4/10

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SCHEDULES Schedule I – Location, Chief Executive Office, Type Of Organization,
Jurisdiction Of Organization, Organizational Identification Number and Trade
Names Schedule II – Pledged Equity Schedule III – Changes in Name, Location,
Etc. ii Puget Amended Restated Pledge Agreement 07771-0276/LEGAL16959772.4
5/4/10

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AMENDED AND RESTATED PLEDGE AGREEMENT AMENDED AND RESTATED PLEDGE AGREEMENT
dated as of February 6, 2009, as amended and restated as of March 31, 2010 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, this “Agreement”), made by PUGET EQUICO LLC, a Washington limited
liability company (the “Pledgor”), to BARCLAYS BANK PLC, as collateral agent (in
such capacity, together with any successor collateral agent appointed pursuant
to the Collateral Agency Agreement), the “Collateral Agent”) for the Secured
Parties. RECITALS. (1) Puget Merger Sub Inc. (“Merger Sub”) entered into a
Credit Agreement dated as of May 16, 2008 (said Agreement, as it may hereafter
be amended, amended and restated, supplemented or otherwise modified from time
to time, being the “Credit Agreement”) with the Lenders and the other parties
thereto. (2) Upon the consummation of the Merger, Puget Energy Inc. assumed,
pursuant to the Assumption Agreement, all of the obligations of the Merger Sub
under the Credit Agreement, this Agreement and all of the other Financing
Documents to which the Merger Sub was a party. (3) The Borrower may from time to
time after the date hereof issue or enter into one or more notes, indentures,
promissory notes, credit agreements or such other Additional Credit Documents to
the extent permitted under the Credit Documents, the obligations under which may
be secured by a first priority lien on the Collateral. (4) Pursuant to the
Credit Agreement and the Additional Credit Documents, the Pledgor is entering
into this Agreement in order to grant to the Collateral Agent for the ratable
benefit of the Secured Parties a security interest in the Collateral to secure
the Secured Obligations. (5) The Pledgor is the owner of the shares of stock or
other Equity Interests (the “Initial Pledged Equity”) set forth opposite the
Pledgor’s name on and as otherwise described on Schedule II hereto and issued by
the Borrower. (6) It is a condition precedent to the making of Loans by the
Lenders under the Credit Agreement, the entry into Interest Hedging Agreements
by the Interest Rate Hedge Banks that the Pledgor shall have granted the
security interest contemplated by this Agreement, and the Borrower desires to
secure indebtedness under the Additional Credit Documents in order to induce the
providers of such indebtedness to execute the Additional Credit Documents. (7)
The Pledgor will derive substantial direct and indirect benefit from the
transactions contemplated by the Financing Documents and the Additional Credit
Documents. (8) Capitalized terms used herein but not otherwise defined shall
have the meanings ascribed to such terms in that certain Amended and Restated
Collateral Agency Agreement, dated as of March 31, 2010, among the Borrower, the
Collateral Agent, the Facility Agent, in its capacity as representative for the
Lenders, and each other Authorized Representative from time to time party
thereto (as the same may be amended, restated or supplemented from time to time,
the “Collateral Agency Agreement”). Further, unless otherwise defined in this
Agreement, in the Credit Agreement or in the Collateral Agency Agreement, terms
defined in Article 8 or 9 of the UCC (as defined below) are used in this
Agreement as such terms are defined in such Article 8 or 9. “UCC” means the
Uniform Commercial Code as in effect, from time to time, in the State of New
York; provided that, if perfection or the effect of AMENDED AND RESTATED PLEDGE
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perfection or non-perfection or the priority of any security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, “UCC” means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection or priority. NOW, THEREFORE, in consideration of
the premises and in order to induce the Lenders to make Loans under the Credit
Agreement, to induce the Interest Rate Hedge Banks to enter into Interest
Hedging Agreements from time to time and to induce the Additional Secured
Parties to extend credit under the Additional Credit Documents from time to
time, the Pledgor hereby agrees with the Collateral Agent for the equal and
ratable benefit of the Secured Parties as follows: Section 1. Grant of Security.
The Pledgor hereby grants to the Collateral Agent, for the ratable benefit of
the Secured Parties, a security interest in the Pledgor’s right, title and
interest in and to the following, in each case, as to each type of property
described below, whether now owned or hereafter acquired by the Pledgor,
wherever located, and whether now or hereafter existing or arising
(collectively, the “Collateral”): (a) the following (the “Security Collateral”):
(i) the Initial Pledged Equity and the certificates, if any, representing the
Initial Pledged Equity, and all dividends, distributions, return of capital,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Initial
Pledged Equity and all subscription warrants, rights or options issued thereon
or with respect thereto; (ii) all additional shares of stock and other Equity
Interests in the Borrower from time to time acquired by the Pledgor in any
manner (such shares and other Equity Interests, together with the Initial
Pledged Equity, being the “Pledged Equity”), and the certificates, if any,
representing such additional shares or other Equity Interests, and all
dividends, distributions, return of capital, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares or other Equity
Interests and all subscription warrants, rights or options issued thereon or
with respect thereto; and (b) all proceeds of, collateral for and supporting
obligations relating to, any and all of the Collateral (including, without
limitation, proceeds, collateral and supporting obligations that constitute
property of the types described in clause (a) of this Section 1 and this clause
(b)) and, to the extent not otherwise included, all (A) payments under insurance
(whether or not the Collateral Agent is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral and (B) cash. Section
2. Security for Obligations. This Agreement secures, in the case of the Pledgor,
the payment of all Secured Obligations. Without limiting the generality of the
foregoing, this Agreement secures, as to the Pledgor, the payment of all amounts
that constitute part of the Secured Obligations and would be owed to any Secured
Party under the Financing Documents and the Additional Credit Documents but for
the fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving a Loan Party. Section
3. Pledgor Remains Liable. Anything herein to the contrary notwithstanding, (a)
the Pledgor shall remain liable under the contracts and agreements included in
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extent set forth therein to perform all of its duties and obligations thereunder
to the same extent as if this Agreement had not been executed, (b) the exercise
by the Collateral Agent of any of the rights hereunder shall not release the
Pledgor from any of its duties or obligations under the contracts and agreements
included in the Collateral and (c) no Secured Party shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, any other Financing Document or any Additional Credit
Documents, nor shall any Secured Party be obligated to perform any of the
obligations or duties of the Pledgor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder. Section 4. Delivery and
Control of Security Collateral. (a) All certificates or instruments representing
or evidencing Security Collateral shall be delivered to and held by or on behalf
of the Collateral Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance reasonably
satisfactory to the Collateral Agent. In addition, upon the occurrence of an
Event of Default, the Collateral Agent shall have the right at any time to
exchange certificates or instruments representing or evidencing Security
Collateral for certificates or instruments of smaller or larger denominations.
(b) With respect to any Security Collateral in which the Pledgor has any right,
title or interest and that constitutes an uncertificated security, the Pledgor
will cause the issuer thereof either (i) to register the Collateral Agent as the
registered owner of such security or (ii) to agree in an authenticated record
with the Pledgor and the Collateral Agent that such issuer will comply with
instructions with respect to such security originated by the Collateral Agent
without further consent of the Pledgor, such authenticated record to be in form
and substance satisfactory to the Collateral Agent. (c) With respect to any
Security Collateral in which the Pledgor has any right, title or interest and
that is not an uncertificated security, upon the request of the Collateral
Agent, the Pledgor will notify each such issuer of Pledged Equity that such
Pledged Equity is subject to the security interest granted hereunder. Section 5.
Representations and Warranties. The Pledgor represents and warrants as follows
as of the date hereof: (a) The Pledgor’s exact legal name, as defined in Section
9-503(a) of the UCC, is correctly set forth in Schedule I hereto. The Pledgor
has not used any trade name. The Pledgor is located (within the meaning of
Section 9-307 of the UCC) in the state or jurisdiction set forth in Schedule I
hereto. The information set forth in Schedule I hereto with respect to the
Pledgor is true and accurate in all respects. The Pledgor has not previously
changed its name, type of organization, jurisdiction of organization or
organizational identification number from those set forth in Schedule I hereto
except as disclosed in Schedule III hereto. (b) All Security Collateral
consisting of certificated securities and instruments has been delivered to the
Collateral Agent. (c) The Pledgor is the legal and beneficial owner of the
Collateral free and clear of any Lien, claim, option or right of others, except
for the security interest created under this Agreement or permitted under the
Credit Agreement. No effective financing statement or other instrument similar
in effect covering all or any part of such Collateral or listing the Pledgor or
any trade name of the Pledgor as debtor with respect to such Collateral is on
file in any recording office, except such as may have been filed in favor of the
Collateral Agent relating to the Financing Documents or as otherwise permitted
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(d) The Pledged Equity pledged by the Pledgor hereunder has been duly authorized
and validly issued and is fully paid and non-assessable. With respect to the
Pledged Equity that is an uncertificated security, the Pledgor has caused the
issuer thereof either (i) to register the Collateral Agent as the registered
owner of such security or (ii) to agree in an authenticated record with the
Pledgor and the Collateral Agent that such issuer will comply with instructions
with respect to such security originated by the Collateral Agent without further
consent of the Pledgor. (e) The Initial Pledged Equity pledged by the Pledgor
constitutes the percentage of the issued and outstanding Equity Interests of the
issuers thereof indicated on Schedule II hereto. (f) All filings and other
actions (including without limitation, actions necessary to obtain control of
Collateral as provided in Section 9-106 of the UCC) necessary to perfect the
security interest in the Collateral created under this Agreement have been duly
made or taken and are in full force and effect, and this Agreement creates in
favor of the Collateral Agent for the benefit of the Secured Parties a valid
and, together with such filings and other actions, perfected first priority
security interest in the Collateral (other than Permitted Collateral Liens),
securing the payment of the Secured Obligations. (g) No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or any other third party is required for (i) the
grant by the Pledgor of the security interest granted hereunder or for the
execution, delivery or performance of this Agreement by the Pledgor, (ii) the
perfection or maintenance of the security interest created hereunder (including
the first priority nature of such security interest), except for the filing of
financing and continuation statements under the UCC, which financing statements
have been duly filed and are in full force and effect, and the actions described
in Section 4 with respect to Security Collateral, which actions have been taken
and are in full force and effect or (iii) the exercise by the Collateral Agent
of its voting or other rights provided for in this Agreement or the remedies in
respect of the Collateral pursuant to this Agreement, except as may be required
in connection with the disposition of any portion of the Security Collateral by
laws affecting the offering and sale of securities generally or as may be
required in connection with the disposition of any portion of the Collateral
under Section 203 of the Federal Power Act or chapter 80.12 of the Revised Code
of Washington. Section 6. Further Assurances. (a) The Pledgor agrees that from
time to time, at the expense of the Pledgor, the Pledgor will promptly execute
and deliver, or otherwise authenticate, all further instruments and documents,
and take all further action that may be necessary, or that the Collateral Agent
may reasonably request, in order to perfect and protect any pledge or security
interest granted or purported to be granted by the Pledgor hereunder or to
enable the Collateral Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, the Pledgor will promptly with respect to the Collateral: (i) if any
such Collateral shall be evidenced by a promissory note or other instrument,
deliver and pledge to the Collateral Agent hereunder such note or instrument
duly indorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Collateral Agent; (ii)
file such financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary, or as the Collateral Agent
may request, in order to perfect and preserve the security interest granted or
purported to be granted by the Pledgor hereunder; (iii) deliver and pledge to
the Collateral Agent for benefit of the Secured Parties certificates
representing Security Collateral that constitutes certificated securities,
accompanied by undated stock powers executed in blank; (iv) take all action
necessary to ensure that the Collateral Agent has control of Collateral
consisting of investment property as provided in Section 9-106 of the UCC; and
(v) deliver to the Collateral Agent evidence that all other
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action that the Collateral Agent may deem reasonably necessary or desirable in
order to perfect and protect the security interest created by the Pledgor under
this Agreement has been taken. (b) The Pledgor hereby authorizes the Collateral
Agent to file one or more financing or continuation statements, and amendments
thereto, including, without limitation, one or more financing statements
indicating that such financing statements cover all Equity Interests in the
Borrower owned by the Pledgor, in each case without the signature of the
Pledgor, and regardless of whether any particular asset described in such
financing statements falls within the scope of the UCC or the granting clause of
this Agreement. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law. The Pledgor ratifies
its authorization for the Collateral Agent to have filed such financing
statements, continuation statements or amendments filed prior to the date
hereof. (c) The Pledgor will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with such Collateral as the Collateral Agent
may reasonably request, all in reasonable detail. Section 7. Post-Closing
Changes; Certain Additional Covenants. (a) The Pledgor will not change its name,
type of organization, jurisdiction of organization or organizational
identification number or location from those set forth in Section 5(a) of this
Agreement without first giving at least 20 days’ prior written notice to the
Collateral Agent and taking all action reasonably required by the Collateral
Agent for the purpose of perfecting or protecting the security interest granted
by this Agreement. The Pledgor will hold and preserve its records relating to
the Collateral and will permit representatives of the Collateral Agent to
inspect and make abstracts from such records and other documents as set forth in
Section 6.18 of the Credit Agreement or the applicable provisions of the
Additional Credit Documents (as if such provisions were applicable to the
Pledgor instead of the Borrower). If the Pledgor does not have an organizational
identification number and later obtains one, it will forthwith notify the
Collateral Agent of such organizational identification number. (b) The Pledgor
will not: (i) amend its Organizational Documents unless such amendment could not
reasonably be expected to result in a Material Adverse Effect (with clauses (i)
and (ii) of such definition being applicable to the Pledgor as well as the
Borrower and its Subsidiaries); (ii) engage at any time in any business or
business activity (including, without limitation, any action or transaction that
is required or restricted with respect to the Borrower and its Subsidiaries
under Article VII of the Credit Agreement or the Additional Credit Documents
without regard to any of the enumerated exceptions to such covenants), other
than (A) the ownership and acquisition of Equity Interests in the Borrower,
together with activities reasonably related thereto, (B) the maintenance of its
legal existence, together with activities reasonably related thereto, (C) the
performance of its obligations in connection with the Merger Agreement and the
other agreements contemplated thereby and in the Financing Documents and the
Additional Credit Documents (subject to any limitations contained therein), (D)
actions incidental to the consummation of the Merger and (E) activities
incidental to its maintenance and continuance and to the foregoing activities
(which shall include, without limitation (1) entering into and incurring
obligations under any insurance contract and employment agreements and benefit
plans for management or employees of the Borrower or any of its Subsidiaries,
(2) incurring liabilities incidental to its existence, (3) entering into
agreements with consultants, auditors and service providers to provide services
to the Borrower or any of its Subsidiaries, (4) maintaining any Deposit
Accounts, Securities Accounts and Lock-Up Accounts permitted or
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required pursuant to the Security Agreement, (5) entering into confidentiality
and similar agreements for the Borrower or any of its Subsidiaries and (6)
incurring Indebtedness in the form of Shareholder Funding); provided that (i)
Shareholder Funding in the form of loans or indebtedness to the Pledgor shall
only be permitted to be incurred on or prior to the Financial Closing Date and
(ii) notwithstanding any other provision of clauses (A) through (E) to the
contrary, Indebtedness other than Shareholder Funding or referred to in clause
(2) of the preceding parenthetical shall not be permitted to be incurred by the
Pledgor; or (iii) permit or consent to any amendment or modification of any of
the provisions of the documentation governing or evidencing the Shareholder
Funding, including, without limitation the Shareholder Loan Subordination
Agreement (if applicable), without the consent of the Collateral Agent or unless
such amendment is not adverse to the Required Voting Parties. Section 8. Voting
Rights; Dividends; Etc. (a) So long as no Event of Default shall have occurred
and be continuing: (i) The Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Security Collateral or any
part thereof for any purpose; provided, however, that the Pledgor will not
exercise or refrain from exercising any such right if such action would have a
material adverse effect on the value of the Security Collateral or any part
thereof. (ii) The Pledgor shall be entitled to receive and retain any and all
dividends, interest and other distributions paid in respect of the Security
Collateral if and to the extent that the payment thereof is not otherwise
prohibited by the terms of the Financing Documents; provided, however, that any
and all: (A) dividends, interest and other distributions paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Security Collateral, (B) dividends and other distributions paid or payable in
cash in respect of any Security Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in-surplus, and (C) cash paid, payable or otherwise distributed
in respect of principal of, or in redemption of, or in exchange for, any
Security Collateral shall be, and shall be forthwith delivered to the Collateral
Agent to hold as, Security Collateral and shall, if received by the Pledgor, be
received in trust for the benefit of the Collateral Agent, be segregated from
the other property or funds of the Pledgor and be forthwith delivered to the
Collateral Agent as Security Collateral in the same form as so received (with
any necessary indorsement). (iii) The Collateral Agent will execute and deliver
(or cause to be executed and delivered) to the Pledgor all such proxies and
other instruments as the Pledgor may reasonably request for the purpose of
enabling the Pledgor to exercise the voting and other rights that it is entitled
to exercise pursuant to paragraph (i) above and to receive the dividends or
interest payments that it is authorized to receive and retain pursuant to
paragraph (ii) above. (b) Upon the occurrence and during the continuance of an
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(i) All rights of the Pledgor (x) to exercise or refrain from exercising the
voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 8(a)(i) shall, upon notice to the Pledgor by the
Collateral Agent, cease and (y) to receive the dividends, interest and other
distributions that it would otherwise be authorized to receive and retain
pursuant to Section 8(a)(ii) shall automatically cease, and all such rights
shall thereupon become vested in the Collateral Agent, which shall thereupon
have the sole right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Security Collateral such dividends,
interest and other distributions. (ii) All dividends, interest and other
distributions that are received by the Pledgor contrary to the provisions of
paragraph (i) of this Section 8(b) shall be received in trust for the benefit of
the Collateral Agent, shall be segregated from other funds of the Pledgor and
shall be forthwith paid over to the Collateral Agent as Security Collateral in
the same form as so received (with any necessary indorsement). Section 9.
Transfers and Other Liens; Additional Shares. (a) The Pledgor agrees that it
will not (i) sell, assign or otherwise dispose of, or grant any option with
respect to, any of the Collateral, or (ii) create or suffer to exist any Lien
upon or with respect to any of the Collateral of the Pledgor except for the
pledge, assignment and security interest created under this Agreement and Liens
permitted under the Credit Documents. (b) The Pledgor agrees that it will (i)
cause the Borrower not to issue any Equity Interests in addition to or in
substitution for the Pledged Equity issued by the Borrower, except to the
Pledgor, and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional Equity Interests issued to it.
Section 10. Collateral Agent Appointed Attorney-in-Fact. The Pledgor hereby
irrevocably appoints the Collateral Agent the Pledgor’s attorney-in-fact, with
full authority in the place and stead of the Pledgor and in the name of the
Pledgor or otherwise, from time to time, upon the occurrence and during the
continuance of an Event of Default, in the Collateral Agent’s discretion, to
take any action and to execute any instrument that the Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation: (a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral, (b) to receive, indorse
and collect any drafts or other instruments or documents, in connection with
clause (a) above, and (c) to file any claims or take any action or institute any
proceedings that the Collateral Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Collateral Agent with respect to any of the Collateral. Section 11. Collateral
Agent May Perform. If the Pledgor fails to perform any agreement contained
herein, the Collateral Agent may, as the Collateral Agent deems necessary to
protect the security interest granted hereunder in the Collateral or to protect
the value thereof, but without any obligation to do so and without notice,
itself perform, or cause performance of, such agreement, and the expenses of the
Collateral Agent incurred in connection therewith shall be payable by the
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Section 12. The Collateral Agent’s Duties. (a) The powers conferred on the
Collateral Agent hereunder are solely to protect the Secured Parties’ interest
in the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral, as to ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not any Secured Party has or is
deemed to have knowledge of such matters, or as to the taking of any necessary
steps to preserve rights against any parties or any other rights pertaining to
any Collateral. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which it accords its own property. (b) Anything contained herein to the contrary
notwithstanding, the Collateral Agent may from time to time, when the Collateral
Agent deems it to be necessary, appoint one or more subagents (each a
“Subagent”) for the Collateral Agent hereunder with respect to all or any part
of the Collateral. In the event that the Collateral Agent so appoints any
Subagent with respect to any Collateral, (i) the assignment and pledge of such
Collateral and the security interest granted in such Collateral by the Pledgor
hereunder shall be deemed for purposes of this Agreement to have been made to
such Subagent, in addition to the Collateral Agent, for the ratable benefit of
the Secured Parties, as security for the Secured Obligations, (ii) such Subagent
shall automatically be vested, in addition to the Collateral Agent, with all
rights, powers, privileges, interests and remedies of the Collateral Agent
hereunder with respect to such Collateral, and (iii) the term “Collateral
Agent,” when used herein in relation to any rights, powers, privileges,
interests and remedies of the Collateral Agent with respect to such Collateral,
shall include such Subagent; provided, however, that no such Subagent shall be
authorized to take any action with respect to any such Collateral unless and
except to the extent expressly authorized in writing by the Collateral Agent.
Section 13. Remedies. If any Event of Default shall have occurred and be
continuing: (a) The Collateral Agent may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party upon default
under the UCC (whether or not the UCC applies to the affected Collateral) and
also may: (i) without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at any of the
Collateral Agent’s offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable; and (ii) exercise any and all rights and remedies of
the Pledgor under or in connection with the Collateral, or otherwise in respect
of the Collateral, including, without limitation, those set forth in Section
9-607 of the UCC. The Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten days’ prior written notice to the Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Collateral Agent shall not
be obligated to make any sale of Collateral regardless of notice of sale having
been given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. (b) Any cash held by or on behalf of the Collateral Agent and all
cash proceeds received by or on behalf of the Collateral Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Collateral Agent, be held by the
Collateral Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Collateral Agent pursuant
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part by the Collateral Agent for the ratable benefit of the Secured Parties
against, all or any part of the Secured Obligations, in accordance with the
Collateral Agency Agreement. (c) All payments received by the Pledgor in respect
of the Collateral shall be received in trust for the benefit of the Collateral
Agent, shall be segregated from other funds of the Pledgor and shall be
forthwith paid over to the Collateral Agent in the same form as so received
(with any necessary indorsement). Section 14. Indemnity and Expenses. The
Pledgor agrees to indemnify, defend and save and hold harmless each Secured
Party, and to pay the expenses of the Collateral Agent, in each case in
connection with this Agreement as set forth in Sections 10.04 and 10.05 of the
Credit Agreement as if such Sections were set forth in this Agreement mutatis
mutandis and as if such Sections applied to the Pledgor instead of the Borrower.
Section 15. Amendments; Waivers; Etc. No amendment or waiver of any provision of
this Agreement, and no consent to any departure by the Pledgor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Collateral Agent (and the Pledgor in the case of an amendment or waiver), and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. No failure on the part of the
Collateral Agent or any other Secured Party to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. Section 16. Notices, Etc.
All notices and other communications provided for hereunder shall be provided in
accordance with the Collateral Agency Agreement. Section 17. Continuing Security
Interest; Assignments Under the Credit Documents. This Agreement shall create a
continuing security interest in the Collateral and shall (a) remain in full
force and effect until the indefeasible payment in full in cash of the Secured
Obligations (other than contingent indemnity obligations not then due),
termination of the Commitments and the termination or expiration of the Interest
Hedging Agreements, (b) be binding upon the Pledgor, its successors and assigns
and (c) inure, together with the rights and remedies of the Collateral Agent
hereunder, to the benefit of the Secured Parties and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Lender or Additional Secured Party may assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement (including, without limitation, all or any portion of its
Commitments, the Loans owing to it and the Note or Notes, if any, held by it) or
the Additional Credit Documents, as the case may be, to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender or the Additional Secured Parties, as the case
may be, herein or otherwise, in each case as provided in Section 10.07 of the
Credit Agreement or the applicable provisions of the Additional Credit
Documents, as applicable. Section 18. Termination. Upon the indefeasible payment
in full in cash of the Secured Obligations (other than contingent indemnity
obligations not then due), termination of the Commitments and the termination or
expiration of the Interest Hedging Agreements, the security interest created by
this Agreement shall terminate and all rights to the Collateral shall revert to
the Pledgor, and the Collateral Agent shall (at the written request and sole
cost and expense of the Pledgor) promptly cause to be transferred and delivered,
against receipt but without any recourse, warranty or representation whatsoever,
any remaining Collateral and money received in respect thereof, to or on the
order of the Pledgor. The Collateral Agent shall also (at the written request
and sole cost and expense of the Pledgor) promptly execute and deliver to the
Pledgor upon such termination such Uniform Commercial Code
07771-0276/LEGAL16959772.4 5/4/10 A-9

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termination statements, and such other documentation as shall be reasonably
requested by the Pledgor to effect the termination and release of the Liens on
the Collateral. Section 19. Security Interest Absolute. The obligations of the
Pledgor under this Agreement are independent of the Secured Obligations or any
other Obligations of any other Loan Party under or in respect of the Credit
Documents, and a separate action or actions may be brought and prosecuted
against the Pledgor to enforce this Agreement, irrespective of whether any
action is brought against the Pledgor or any other Loan Party or whether the
Pledgor or any other Loan Party is joined in any such action or actions. All
rights of the Collateral Agent and the other Secured Parties and the pledge,
assignment and security interest hereunder, and all obligations of the Pledgor
hereunder, shall be irrevocable, absolute and unconditional irrespective of, and
the Pledgor hereby irrevocably waives (to the maximum extent permitted by
applicable law) any defenses it may now have or may hereafter acquire in any way
relating to, any or all of the following: (a) any lack of validity or
enforceability of any Credit Document or any other agreement or instrument
relating thereto; (b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations or any other
Obligations of any other Loan Party under or in respect of any of the Credit
Documents or any other amendment or waiver of or any consent to any departure
from any Credit Document, including, without limitation, any increase in the
Secured Obligations resulting from the extension of additional credit to any
Loan Party or any of its Subsidiaries or otherwise; (c) any taking, exchange,
release or non-perfection of any Collateral or any other collateral, or any
taking, release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Secured Obligations; (d) any manner of
application of any Collateral or any other collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any Collateral or any other collateral for all or any of the
Secured Obligations or any other Obligations of any other Loan Party under or in
respect of the Financing Documents, the Additional Credit Documents or any other
assets of any Loan Party or any of its Subsidiaries; (e) any change,
restructuring or termination of the corporate structure or existence of any Loan
Party or any of its Subsidiaries; (f) any failure of any Secured Party to
disclose to any Loan Party any information relating to the business, condition
(financial or otherwise), operations, performance, assets, nature of assets,
liabilities or prospects of any other Loan Party now or hereafter known to such
Secured Party (the Pledgor waiving any duty on the part of the Secured Parties
to disclose such information); (g) the failure of any other Person to execute
this Agreement or any other Security Document, guaranty or agreement or the
release or reduction of liability of the Pledgor or other grantor or surety with
respect to the Secured Obligations; or (h) any other circumstance (including,
without limitation, any statute of limitations) or any existence of or reliance
on any representation by any Secured Party that might otherwise constitute a
defense available to, or a discharge of, the Pledgor or any other Pledgor or a
third party grantor of a security interest. 07771-0276/LEGAL16959772.4 5/4/10
A-10

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This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by any Secured Party or by any other Person upon the
insolvency, bankruptcy or reorganization of any Loan Party or otherwise, all as
though such payment had not been made. Section 20. Collateral Agency Agreement
Controls. Notwithstanding anything herein to the contrary, the lien and security
interest granted to the Collateral Agent, for the benefit of the Secured Parties
pursuant to this Agreement and any other Security Document and related
agreements (including any control agreements executed pursuant to the
requirements of this Agreement), and the exercise of any right or remedy by the
Collateral Agent in respect of the Collateral are subject to the provisions of
the Collateral Agency Agreement. In the event of any conflict or inconsistency
between the provisions of this Agreement, any other Security Documents and any
such related document and the Collateral Agency Agreement, the provisions of the
Collateral Agency Agreement shall govern and control. Section 21. Execution in
Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier or
other means of electronic delivery shall be effective as delivery of an original
executed counterpart of this Agreement. Section 22. Governing Law. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York. Any legal action or proceeding arising under this
Agreement or in any way connected with or related or incidental to the dealings
of the parties hereto or any of them with respect to this Agreement, in each
case whether now existing or hereafter arising, may be brought in the courts of
the State of New York sitting in New York City or of the United States for the
Southern District of such state, and by execution and delivery of this
Agreement, the Pledgor consents, for itself and in respect of its property, to
the non-exclusive jurisdiction of those courts. The Pledgor waives any
objection, including any objection to the laying of venue or based on the
grounds of forum non conveniens, which it may now or hereafter have to the
bringing of any action or proceeding in such jurisdiction in respect of this
Agreement or any Financing Document. Section 23. Waiver of Right to Trial by
Jury. Each party to this Agreement hereby expressly waives any right to trial by
jury of any claim, demand, action or cause of action arising under this
Agreement, any Credit Document or in any way connected with or related or
incidental to its dealings with respect to this Agreement, any Credit Document
or the transactions related thereto, in each case whether now existing or
hereafter arising, and whether founded in contract or tort or otherwise; and
each party to this Agreement hereby agrees and consents that any such claim,
demand, action or cause of action shall be decided by court trial without a
jury, and that each party to this Agreement may file an original counterpart or
a copy of this Section 22 with any court as written evidence of the consent of
the signatories hereto to the waiver of its right to trial by jury. Section 24.
Original Schedules and Exhibits. Each of the Schedules and Exhibits attached to
the Pledge Agreement dated as of February 6, 2009 between the parties hereto,
shall be deemed attached to, and form a part of, this Agreement without any
amendment, modification or supplement. [Signature pages follow]
07771-0276/LEGAL16959772.4 5/4/10 A-11

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EXECUTION COPY AMENDMENT NO. 1 TO AMENDED AND RESTATED PLEDGE AGREEMENT This
AMENDMENT NO. 1 TO AMENDED AND RESTATED PLEDGE AGREEMENT (this “Amendment”), is
made as of February 10, 2012, by and between JPMORGAN CHASE BANK, N.A., in its
capacity as successor Collateral Agent (as defined below) and PUGET EQUICO LLC,
as pledgor (the “Pledgor”). Capitalized terms used but not otherwise defined
herein shall have the respective meanings given to them in the Amended and
Restated Collateral Agency Agreement (described below). WHEREAS, on the date
hereof, Barclays Bank PLC resigned as Collateral Agent under than certain
Amended and Restated Collateral Agency Agreement, dated as of February 6, 2009
and as amended and restated as of March 31, 2010, among Puget Energy, Inc.,
Pledgor, Barclays Bank PLC, as collateral agent and Barclays Bank PLC, as
facility agent; WHEREAS, pursuant to Amendment No. 1 to Amended and Restated
Collateral Agency Agreement, dated as of the date hereof, JPMorgan Chase Bank,
N.A. was appointed as successor Collateral Agent (in such capacity, the
“Collateral Agent”); WHEREAS, the Collateral Agent and the Pledgor wish to amend
that certain Amended and Restated Pledge Agreement, dated February 6, 2009 and
as amended and restated as of March 31, 2010, between Collateral Agent, as
successor collateral agent and the Pledgor (as amended, restated, supplemented
or otherwise modified prior to the date hereof, the “Agreement”); NOW THEREFORE,
in consideration of the premises set forth above, the terms and conditions
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto have agreed to
amend the Agreement as follows. SECTION 1. Amendments to Agreement. (a) Recital
(1) to the Agreement is amended and restated in its entirety to read as follows:
(1) Puget Energy, Inc. entered into that certain Credit Agreement dated as of
February 10, 2012 among the Lenders from time to time party thereto and JPMorgan
Chase Bank, N.A., as administrative agent (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”). (b) Recital (6)
to the Agreement is amended to delete the punctuation mark “,” appearing
immediately before the phrase “the entry into Interest Hedging Agreements”
appearing therein and to replace such punctuation mark with the word “and”. (c)
Recital (8) is amended to insert the phrase “the Pledgor,” immediately following
the phrase “March 31, 2010, among the Borrower,” appearing therein. (d) Recital
(2) to the Agreement is deleted in its entirety. (e) Recitals (3), (4), (5), (6)
and (7) are renumbered as recitals (2), (3), (4), (5) and (6) respectively.

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(f) Clause (b)(ii) of Section 7 of the Agreement is amended to (i) delete the
punctuation mark “,” appearing immediately before the number “(5)” appearing
therein and to replace such punctuation mark with the word “and” and (ii) to
delete in its entirety the phrase “and (6) incurring Indebtedness in the form of
Shareholder Funding); provided that (i) Shareholder Funding in the form of loans
or indebtedness to the Pledgor shall only be permitted to be incurred on or
prior to the Financial Closing Date and (ii) notwithstanding any other provision
of clauses (A) through (E) to the contrary, Indebtedness other than Shareholder
Funding or referred to in clause (2) of the preceding parenthetical shall not be
permitted to be incurred by the Pledgor; or” appearing therein. (g) Clause
(b)(iii) of Section 7 of the Agreement is deleted in its entirety. (h) Section
14 of the Agreement is amended to (i) delete the section reference “Sections
10.04 and 10.05” appearing therein and to replace such section reference with
the section reference “Section 9.03”, (ii) delete the phrase “Sections were” and
to replace such phrase with the phrase “Section was” and (iii) to replace the
word “Sections” appearing immediately before the phrase “applied to the Pledgor”
appearing therein with the word “Section”. (i) Section 17 of the Agreement is
amended to delete the section reference “Section 10.07” appearing therein and to
replace such section reference with the section reference “Section 9.04”. (j)
The Agreement is amended to replace each reference to “Barclays Bank PLC” with
“JPMorgan Chase Bank, N.A.”. SECTION 2. Conditions of Effectiveness. This
Amendment shall become effective as of the date hereof (the “Effective Date”)
when, and only when (i) the Collateral Agent shall have received an executed
counterpart of this Amendment from the Collateral Agent and the Pledgor and (ii)
the New Credit Agreement shall become effective in accordance with its terms and
conditions. SECTION 3. Representations and Warranties. Each of the parties
hereto represents and warrants that this Amendment and the Agreement, as amended
by this Amendment, constitute legal, valid and binding obligations of such party
enforceable against such party in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors’ rights generally and general equitable
principles. SECTION 4. Reference to and the Effect on the Agreement. (a) On and
after the effective date of this Amendment, each reference in the Agreement to
“this Agreement”, “hereunder”, “hereof”, “herein” or words of like import
referring to the Agreement and each reference to the Agreement in any
certificate delivered in connection therewith, shall mean and be a reference to
the Agreement as amended hereby. (b) Each of the parties hereto hereby agrees
that, except as specifically amended above, the Agreement is hereby ratified and
confirmed and shall continue to be in full force and effect and enforceable,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors’ rights
generally and general equitable principles. SECTION 5. Headings. Section
headings in this Amendment are included herein for convenience only and shall
not constitute a part of this Amendment for any other purpose. SECTION 6.
Execution in Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same agreement.
Delivery of an executed counterpart to this Amendment by facsimile, electronic
mail, 2

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portable document format (PDF) or similar means shall be effective as delivery
of a manually executed counterpart of this Amendment. SECTION 7. Governing Law.
This Amendment shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York. [REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK] 3

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the day and year first
above written. By: ...:....:....t;...!:~=,£.-U;_,....::;..__,4:f,,M..!~~r­ Name:
Title: Vice Pre i e Finance and Treasurer Signature Page Jo Amendment No. I to
Amended and Restated Pledge Agreement

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JPMORGAN CHASE BANK, N.A. as successor Collateral Agent B~~- Name: He l.en D.
Davis Title: Vice President Signature Page to Amendment No. I lO Amended and
Restated Pledge Agree,ment

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EXHIBIT L SECURITY AGREEMENT [ATTACHED]

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EXECUTION COPY AMENDED AND RESTATED BORROWER SECURITY AGREEMENT Dated as of
February 6, 2009 as amended and restated as of March 31, 2010 From PUGET ENERGY
INC. as Borrower to BARCLAYS BANK PLC as Collateral Agent Security Agreement
07771-0276/LEGAL17986459.2 5/4/10

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T A B L E O F C O N T E N T S Section Page Section 1. Grant of Security
.......................................................................................................................
2 Section 2. Security for Obligations
............................................................................................................
6 Section 3. Borrower Remain Liable
...........................................................................................................
6 Section 4. Delivery and Control of Security Collateral
............................................................................. 6
Section 5. Deposit Accounts
......................................................................................................................
7 Section 6. Reserved
....................................................................................................................................
7 Section 7. Release of Amounts
..................................................................................................................
7 Section 8. Representations and Warranties
................................................................................................
8 Section 9. Further Assurances
..................................................................................................................
10 Section 10. Reserved
................................................................................................................................
11 Section 11. Reserved
................................................................................................................................
11 Section 12. Post-Closing Changes; Collections on Assigned Agreements,
Receivables and Related Contracts
........................................................................................................................
11 Section 13. As to Intellectual Property Collateral
....................................................................................
12 Section 14. Voting Rights; Dividends; Etc.
.............................................................................................
12 Section 15. Reserved
................................................................................................................................
13 Section 16. As to Letter-of-Credit Rights
................................................................................................
13 Section 17. Commercial Tort Claims
.......................................................................................................
13 Section 18. Transfers and Other Liens; Additional Shares
...................................................................... 13
Section 19. Collateral Agent Appointed Attorney in Fact
....................................................................... 14
Section 20. Collateral Agent May Perform
..............................................................................................
14 Section 21. The Collateral Agent’s Duties
...............................................................................................
14 Section 22. Remedies
...............................................................................................................................
15 Section 23. Indemnity and Expenses
.......................................................................................................
16 Section 24. Amendments; Waivers; Additional Borrower; Etc.
.............................................................. 16 Section 25.
Notices, Etc.
..........................................................................................................................
16 Section 26. Continuing Security Interest; Assignments under the Credit
Agreement ............................. 16 Security Agreement
07771-0276/LEGAL17986459.2 5/4/10

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Section 27. Termination
...........................................................................................................................
16 Section 28. Collateral Agency Agreement Controls
................................................................................
16 Section 29. Execution in Counterparts
.....................................................................................................
17 Section 30. Governing Law
.....................................................................................................................
17 Section 31. Waiver of Right to Trial by Jury
...........................................................................................
17 Schedules Schedule I - Investment Property Schedule II - Pledged Deposit
Accounts Schedule III - Assigned Agreements Schedule IV - Intellectual Property
Schedule V - Commercial Tort Claims Schedule VI - Location, Chief Executive
Office, Type of Organization, Jurisdiction of Organization and Organizational
Identification Number Schedule VII - Changes in Name, Location, Etc. Schedule
VIII - Letters of Credit Exhibits Exhibit A - Form of Withdrawal Certificate
Security Agreement 07771-0276/LEGAL17986459.2 5/4/10

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AMENDED AND RESTATED BORROWER SECURITY AGREEMENT AMENDED AND RESTATED BORROWER
SECURITY AGREEMENT (as amended, amended and restated, supplemented or otherwise
modified from time to time, this “Agreement”) dated as of February 6, 2009, as
amended and restated as of March 31, 2010 made by Puget Energy Inc., a
Washington corporation (successor in interest by merger to Puget Merger Sub
Inc.) (the “Company”) to Barclays Bank PLC, as collateral agent (together with
any successor collateral agent appointed pursuant to the Collateral Agency
Agreement referred to below, the “Collateral Agent”) for the Secured Parties.
PRELIMINARY STATEMENTS. (1) Puget Merger Sub Inc. (“Merger Sub”) entered into a
Credit Agreement dated as of May 16, 2008 (said agreement, as it may hereafter
be amended, amended and restated, supplemented or otherwise modified from time
to time, being the “Credit Agreement”) with the Lenders and the other parties
thereto. (2) Upon the consummation of the Merger, the Company assumed, pursuant
to the Assumption Agreement, all of the obligations of the Merger Sub under the
Credit Agreement, this Agreement and all of the other Financing Documents to
which the Merger Sub was a party, and is the owner of the shares of stock or
other Equity Interests (the “Initial Pledged Equity”) set forth opposite the
Borrower’s name on and as otherwise described in Part I of Schedule I hereto and
issued by Puget Sound Energy, Inc. (“PSE”). The Merger Sub (prior to the
Effective Time) and the Company (upon and after the Effective Time) are referred
to herein as the “Borrower”. (3) The Borrower may from time to time after the
date hereof issue or enter into one or more notes, indentures, promissory notes,
credit agreements or such other Additional Credit Documents to the extent
permitted under the Credit Documents, the obligations under which may be secured
by a first priority lien on the Collateral. (4) The Borrower is the owner of the
deposit accounts (the “Pledged Deposit Accounts”) set forth opposite its name on
Schedule II hereto. (5) The Borrower is the owner of Account No. 110789 (the
“Lock-Up Account”), with The Bank of New York Mellon at its office at 101
Barclay Street, Floor 8W, New York, NY 10286, Attention: Corporate Finance
Group. (6) It is a condition precedent to the making of Loans by the Lenders
under the Credit Agreement, the entry into Interest Hedging Agreements by the
Interest Rate Hedge Banks that the Borrower shall have granted the to the
Collateral Agent, for the ratable benefit of the Secured Parties, the security
interest contemplated by this Agreement, and the Borrower desires to secure
indebtedness under the Additional Credit Documents in order to induce the
providers of such indebtedness to execute the Additional Credit Documents. The
Borrower will derive substantial direct and indirect benefit from the
transactions contemplated by the Financing Documents and the Additional Credit
Documents. (7) Capitalized terms used herein but not otherwise defined shall
have the meanings ascribed to such terms in that certain Amended and Restated
Collateral Agency Agreement, dated as of March 31, 2010, among the Borrower, the
Collateral Agent, the Facility Agent, in its capacity as representative for the
Lenders, and each other Authorized Representative from time to time party
thereto (as the same may be amended, restated or supplemented from time to time,
the “Collateral Agency Agreement”). Further, unless otherwise defined in this
Agreement, in the Credit Agreement or in the Collateral Agency Agreement, terms
defined in Article 8 or 9 of the UCC (as defined below) are used in Security
Agreement 07771-0276/LEGAL17986459.2 5/4/10

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this Agreement as such terms are defined in such Article 8 or 9. The term
“Withdrawal Certificate” shall mean a certificate substantially in the form of
Exhibit A, and the term “Withdrawal Date” shall mean any date on which a
withdrawal is to be made from the Lock-Up Account. (8) “UCC” means the Uniform
Commercial Code as in effect from time to time in the State of New York;
provided that, if perfection or the effect of perfection or non perfection or
the priority of the security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, “UCC” means the Uniform Commercial Code as in effect from time to time
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection, effect of perfection or non perfection or priority. NOW,
THEREFORE, in consideration of the premises and in order to induce the Lenders
to make Loans under the Credit Agreement, to induce the Interest Rate Hedge
Banks to enter into Interest Hedging Agreements from time to time and to induce
the Additional Secured Parties to extend credit under the Additional Credit
Documents from time to time, the Borrower hereby agrees with the Collateral
Agent for the ratable benefit of the Secured Parties as follows: Section 1.
Grant of Security. The Borrower hereby grants to the Collateral Agent, for the
ratable benefit of the Secured Parties, a security interest in the Borrower’s
right, title and interest in and to the following, in each case, as to each type
of property described below, whether now owned or hereafter acquired by the
Borrower, wherever located, and whether now or hereafter existing or arising
(collectively, the “Collateral”): (a) all equipment in all of its forms,
including, without limitation, all machinery, tools, motor vehicles, vessels,
aircraft, furniture and fixtures, and all parts thereof and all accessions
thereto, including, without limitation, computer programs and supporting
information that constitute equipment within the meaning of the UCC (any and all
such property being the “Equipment”); (b) all inventory in all of its forms,
including, without limitation, (i) all raw materials, work in process, finished
goods and materials used or consumed in the manufacture, production, preparation
or shipping thereof, (ii) goods in which the Borrower has an interest in mass or
a joint or other interest or right of any kind (including, without limitation,
goods in which the Borrower has an interest or right as consignee) and (iii)
goods that are returned to or repossessed or stopped in transit by the Borrower,
and all accessions thereto and products thereof and documents therefor,
including, without limitation, computer programs and supporting information that
constitute inventory within the meaning of the UCC (any and all such property
being the “Inventory”); (c) all accounts (including, without limitation,
health-care-insurance receivables), chattel paper (including, without
limitation, tangible chattel paper and electronic chattel paper), instruments
(including, without limitation, promissory notes), letter-of-credit rights,
general intangibles (including, without limitation, payment intangibles) and
other obligations of any kind, whether or not arising out of or in connection
with the sale or lease of goods or the rendering of services and whether or not
earned by performance, and all rights now or hereafter existing in and to all
supporting obligations and in and to all security agreements, mortgages, Liens,
leases, letters of credit and other contracts securing or otherwise relating to
the foregoing property (any and all of such accounts, chattel paper,
instruments, letter-of-credit rights, general intangibles and other obligations,
to the extent not referred to in clause (d), (e), (f) or (g) below, being the
“Receivables,” and any and all such supporting obligations, security agreements,
mortgages, Liens, leases, letters of credit and other contracts being the
“Related Contracts”); Security Agreement 07771-0276/LEGAL17986459.2 5/4/10

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(d) the following (the “Security Collateral”): (i) the Initial Pledged Equity
and the certificates, if any, representing the Initial Pledged Equity, and all
dividends, distributions, return of capital, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Initial Pledged Equity and all
warrants, rights or options issued thereon or with respect thereto; (ii) all
additional shares of stock and other Equity Interests in PSE from time to time
acquired by the Borrower in any manner (such shares and other Equity Interests,
together with the Initial Pledged Equity, being the “Pledged Equity”), and the
certificates, if any, representing such additional shares or other Equity
Interests, and all dividends, distributions, return of capital, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such shares
or other Equity Interests and all warrants, rights or options issued thereon or
with respect thereto; (iii) all indebtedness from time to time owed to the
Borrower (such indebtedness being the “Pledged Debt”) and the instruments, if
any, evidencing such indebtedness, and all interest, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness; (iv) the Lock-Up
Account, all security entitlements with respect to all financial assets from
time to time credited to the Lock-Up Account, and all financial assets, and all
dividends, distributions, return of capital, interest, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such security entitlements or
financial assets and all warrants, rights or options issued thereon or with
respect thereto; and (v) all other investment property (including, without
limitation, all (A) securities, whether certificated or uncertificated, (B)
security entitlements, (C) securities accounts, (D) commodity contracts and (E)
commodity accounts) in which the Borrower has now, or acquires from time to time
hereafter, any right, title or interest in any manner, and the certificates or
instruments, if any, representing or evidencing such investment property, and
all dividends, distributions, return of capital, interest, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such investment property and all
warrants, rights or options issued thereon or with respect thereto; (e) each of
the agreements listed on Schedule III hereto and each Interest Hedging Agreement
to which the Borrower is now or may hereafter become a party, in each case as
such agreements may be amended, amended and restated, supplemented or otherwise
modified from time to time (collectively, the “Assigned Agreements”), including,
without limitation, (i) all rights of the Borrower to receive moneys due and to
become due under or pursuant to the Assigned Agreements, (ii) all rights of the
Borrower to receive proceeds of any insurance, indemnity, warranty or guaranty
with respect to the Assigned Agreements, (iii) claims of the Borrower for
damages arising out of or for breach of or default under the Assigned Agreements
and (iv) the right of the Borrower to terminate the Assigned Agreements, to
perform thereunder and to compel performance and otherwise exercise all remedies
thereunder (all such Collateral being the “Agreement Collateral”); Security
Agreement 07771-0276/LEGAL17986459.2 5/4/10

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(f) the following (collectively, the “Account Collateral”): (i) the Pledged
Deposit Accounts, other deposit accounts and all funds from time to time
credited thereto, and all certificates and instruments, if any, from time to
time representing or evidencing the Pledged Deposit Accounts; (ii) all
promissory notes, certificates of deposit, checks and other instruments from
time to time delivered to or otherwise possessed by the Collateral Agent for or
on behalf of the Borrower in substitution for or in addition to any or all of
the then existing Account Collateral; and (iii) all interest, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then existing
Account Collateral; (g) the following (collectively, the “Intellectual Property
Collateral”): (i) all patents, patent applications, utility models and statutory
invention registrations, all inventions claimed or disclosed therein and all
improvements thereto (“Patents”); (ii) all trademarks, service marks, domain
names, trade dress, logos, designs, slogans, trade names, business names,
corporate names and other source identifiers, whether registered or unregistered
(provided that no security interest shall be granted in United States
intent-to-use trademark applications to the extent that, and solely during the
period in which, the grant of a security interest therein would impair the
validity or enforceability of such intent-to-use trademark applications under
applicable federal law), together, in each case, with the goodwill symbolized
thereby (“Trademarks”); (iii) all copyrights, including, without limitation,
copyrights in Computer Software (as hereinafter defined), internet web sites and
the content thereof, whether registered or unregistered (“Copyrights”); (iv) all
computer software, programs and databases (including, without limitation, source
code, object code and all related applications and data files), firmware and
documentation and materials relating thereto, together with any and all
maintenance rights, service rights, programming rights, hosting rights, test
rights, improvement rights, renewal rights and indemnification rights and any
substitutions, replacements, improvements, error corrections, updates and new
versions of any of the foregoing (“Computer Software”); (v) all confidential and
proprietary information, including, without limitation, know-how, trade secrets,
manufacturing and production processes and techniques, inventions, research and
development information, databases and data, including, without limitation,
technical data, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and supplier lists and
information (collectively, “Trade Secrets”), and all other intellectual,
industrial and intangible property of any type, including, without limitation,
industrial designs and mask works (in each case, subject to the exclusion for
intent to use applications set forth in clause (ii) above); Security Agreement
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(vi) all registrations and applications for registration for any of the
foregoing, including, without limitation, those registrations and applications
for registration set forth in Schedule IV hereto, together with all reissues,
divisions, continuations, continuations- in-part, extensions, renewals and
reexaminations thereof (in each case, subject to the exclusion for intent to use
applications set forth in clause (ii) above); (vii) all tangible embodiments of
the foregoing, all rights in the foregoing provided by international treaties or
conventions, all rights corresponding thereto throughout the world and all other
rights of any kind whatsoever of the Borrower accruing thereunder or pertaining
thereto; (viii) all agreements, permits, consents, orders and franchises
relating to the license, development, use or disclosure of any of the foregoing
to which the Borrower, now or hereafter, is a party or a beneficiary, including,
without limitation, the agreements set forth in Schedule IV hereto; and (ix) any
and all claims for damages and injunctive relief for past, present and future
infringement, dilution, misappropriation, violation, misuse or breach with
respect to any of the foregoing, with the right, but not the obligation, to sue
for and collect, or otherwise recover, such damages; (h) the commercial tort
claims described in Schedule V hereto (together with any commercial tort claims
as to which the Borrower have complied with the requirements of Section 17); (i)
all books and records (including, without limitation, customer lists, credit
files, printouts and other computer output materials and records) of the
Borrower pertaining to any of the Collateral; and (j) all proceeds of,
collateral for, income, royalties and other payments now or hereafter due and
payable with respect to, and supporting obligations relating to, any and all of
the Collateral (including, without limitation, proceeds, collateral and
supporting obligations that constitute property of the types described in
clauses (a) through (i) of this Section 1) and, to the extent not otherwise
included, all (A) payments under insurance (whether or not the Collateral Agent
is the loss payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the foregoing
Collateral, and (B) cash. Provided, however, that in no event shall Collateral
(or any of the sub-categories of Collateral defined above) include: (a) any
lease, license, contract or agreement to which the Borrower is a party, and any
of its rights or interest thereunder, if and to the extent that a security
interest is prohibited by or in violation of (i) any law, rule or regulation
applicable to the Borrower, or (ii) a term, provision or condition of any such
lease, license, contract, property right or agreement (unless such law, rule,
regulation, term, provision or condition would be rendered ineffective with
respect to the creation of the security interest hereunder pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law (including
the Bankruptcy Code) or principles of equity; provided further that in no event
shall the Security Collateral be excluded by the first proviso in this
paragraph, or (b) in any of the outstanding capital stock of (i) a Controlled
Foreign Corporation (within the meaning of Section 957 of the Internal Revenue
Code of 1986, as amended) in excess of 65% of the voting power of all classes of
capital stock of such Controlled Foreign Corporation entitled to vote and (ii)
any subsidiary of any such Controlled Foreign Corporation. Security Agreement
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Section 2. Security for Obligations. This Agreement secures, in the case of the
Borrower, the payment of all Secured Obligations of the Borrower. Without
limiting the generality of the foregoing, this Agreement secures, as to the
Borrower, the payment of all amounts that constitute part of the Secured
Obligations and would be owed by the Borrower to any Secured Party under the
Credit Documents but for the fact that they are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding
involving the Borrower. Section 3. Borrower Remain Liable. Anything herein to
the contrary notwithstanding, (a) the Borrower shall remain liable under the
contracts and agreements included in the Borrower’s Collateral to the extent set
forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by the
Collateral Agent of any of the rights hereunder shall not release the Borrower
from any of its duties or obligations under the contracts and agreements
included in the Collateral and (c) no Secured Party shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement or any other Financing Document, nor shall any Secured
Party be obligated to perform any of the obligations or duties of the Borrower
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder. Section 4. Delivery and Control of Security Collateral. (a)
All certificated securities or instruments representing or evidencing Security
Collateral shall be delivered to and held by or on behalf of the Collateral
Agent pursuant hereto and shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Collateral Agent. The
Collateral Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing Security Collateral for certificates or
instruments of smaller or larger denominations. (b) With respect to the Lock-Up
Account and any Security Collateral that constitutes a security entitlement as
to which the financial institution acting as Collateral Agent hereunder is not
the securities intermediary, the Borrower will cause the securities intermediary
with respect to such Account or security entitlement either (i) to identify in
its records the Collateral Agent as the entitlement holder thereof or (ii) to
agree with the Borrower and the Collateral Agent that such securities
intermediary will comply with entitlement orders originated by the Collateral
Agent without further consent of the Borrower, such agreement to be in form and
substance reasonably satisfactory to the Collateral Agent (a “Securities Account
Control Agreement” or “Securities/Deposit Account Control Agreement,”
respectively) (c) With respect to any Security Collateral that constitutes an
uncertificated security, the Borrower will cause the issuer thereof either (i)
to register the Collateral Agent as the registered owner of such security or
(ii) to agree with the Borrower and the Collateral Agent that such issuer will
comply with instructions with respect to such security originated by the
Collateral Agent without further consent of the Borrower, such agreement to be
in form and substance satisfactory to the Collateral Agent (such agreement being
an “Uncertificated Security Control Agreement”). (d) The Collateral Agent shall
have the right at any time to convert Security Collateral consisting of
financial assets credited to the Securities Account to Security Collateral
consisting of financial assets held directly by the Collateral Agent, and to
convert Security Collateral consisting of financial assets held directly by the
Collateral Agent to Security Collateral consisting of financial assets credited
to the Lock-Up Account. (e) The balance from time to time in the Lock-Up Account
shall constitute part of the Collateral of the Lenders hereunder and, except as
otherwise provided herein, shall not constitute payment Security Agreement
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of the Credit Agreement Obligations until the occurrence of a Cash Sweep Date,
whereupon a portion of such amounts standing to the credit of the Lock-Up
Account shall be applied as provided in Section 2.03(b)(i)(B) of the Credit
Agreement. Section 5. Deposit Accounts. So long as any Secured Obligation shall
remain unpaid, any Interest Hedging Agreement shall be in effect or any Lender
shall have any Commitment: (a) The Borrower will maintain deposit accounts only
with the financial institution acting as Collateral Agent hereunder or with a
bank (a “Pledged Account Bank”) that has agreed with the Borrower and the
Collateral Agent to comply with instructions originated by the Collateral Agent
directing the disposition of funds in such deposit account without the further
consent of the Borrower, such agreement to be in form and substance reasonably
satisfactory to the Collateral Agent (a “Deposit Account Control Agreement”);
provided, however, this Section 5(a) shall not apply to deposit accounts (i)
with an aggregate balance of no more than $250,000 at any time or (ii) operated
solely as a payroll account. (b) The Borrower agrees to terminate any or all
Pledged Deposit Accounts and related Deposit Account Control Agreements upon
request by the Collateral Agent. (c) The Collateral Agent may, at any time and
without notice to, or consent from, the Borrower, transfer, or direct the
transfer of, funds from the Pledged Deposit Accounts to satisfy the Borrower’s
obligations under the Financing Documents if an Event of Default shall have
occurred and be continuing. In the event that such a transfer shall take place,
the Collateral Agent agrees to provide notice to the Borrower thereafter as
required by law, provided that the failure to provide such notice shall not
result in any liability under this Agreement. Section 6. Reserved. Section 7.
Release of Amounts. (a) So long as no Default under Section 8.01(a), (f) or (k)
of the Credit Agreement or an Event of Default shall have occurred and be
continuing, the Collateral Agent will pay and release, or direct the applicable
Pledged Account Bank to pay and release, to the Borrower or at its order such
amount, if any, as is then on deposit in the Pledged Deposit Accounts, in each
case to the extent permitted to be released under the terms of the Credit
Documents. (b) The following provisions shall apply to withdrawals from the
Lock-Up Account: (i) Withdrawal Certificate. (A) Upon the conclusion of a
Lock-Up Period, the Borrower shall be entitled to withdraw monies from the
Lock-Up Account by delivering to the Collateral Agent a Withdrawal Certificate
signed by the Borrower. (B) The Borrower shall not be entitled to request any
withdrawal from the Lock-Up Account during the Lock-Up Period except withdrawals
permitted pursuant to Section 7.05(d) of the Credit Agreement. Any Withdrawal
Certificate provided to the Collateral Agent by the Borrower during a Lock-Up
Period shall be accompanied by a certification of an Authorized Officer of the
Borrower in accordance with clause (C) below, (including a certification with
respect to the Distributable Cash balance, if applicable); and Security
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(C) No later than three Business Days prior to the Withdrawal Date, the Borrower
shall deliver to the Facility Agent, each other Authorized Representative and
the Collateral Agent, for purposes of any withdrawal, a Withdrawal Certificate
signed by an Authorized Officer of the Borrower specifying: (i) the amount
requested to be withdrawn from the Lock-Up Account; (ii) the relevant Withdrawal
Date on which such withdrawal is to be made; (iii) the purpose for which the
amount so withdrawn is to be used; (iv) for any withdrawal under clause (A)
above, that the Borrower is not and will not be, after giving effect to such
withdrawal in Default and, no Default or Event of Default may reasonably be
expected to occur as a result of such withdrawal or the application of the
withdrawn amounts in the manner contemplated by such Withdrawal Certificate; and
(v) a certificate with respect to the Distributable Cash Balance on the date of
the Withdrawal Certificate. (ii) Agents’ Review of Certificates; Delivery to
Collateral Agent. (A) In the event that prior to the relevant Withdrawal Date,
the Facility Agent shall reasonably determine that a Withdrawal Certificate is
inconsistent with or otherwise fails to satisfy the provisions of this Agreement
and the other Financing Documents, the Facility Agent shall notify the
Collateral Agent and the Borrower in writing promptly but in no case later than
the third Business Day following the Facility Agent’s receipt of such Withdrawal
Certificate and may either (A) return such Withdrawal Certificate to the
Borrower with its determinations noted thereon; or (B) in consultation with the
Borrower, make such corrections as it reasonably deems necessary to satisfy the
requirements of this Agreement. The Facility Agent and the Borrower will
endeavor to agree and complete the final form Withdrawal Certificate and deliver
such certificate to the Collateral Agent, no later than the Business Day prior
to the Withdrawal Date to which such certificate relates. (B) The Facility Agent
and the Collateral Agent shall countersign any accepted Withdrawal Certificate
(which acceptance or counter-signature shall not be unreasonably withheld,
conditioned or delayed), and the Collateral Agent shall implement such
Withdrawal Certificate in accordance with Section 7(b)(iii). (iii)
Implementation of Withdrawal. Except as otherwise provided in this Agreement,
following receipt of an executed Withdrawal Certificate, the Collateral Agent
shall pay or transfer the amount(s) specified in such Withdrawal Certificate by
requesting that the Account Bank initiate such payment or transfer not later
than 12:00 Noon (New York City time) on the Withdrawal Date set out in such
Withdrawal Certificate for such payment or transfer (or if such certificate is
not received by the Collateral Agent at least one Business Day prior to such
Withdrawal Date, by 12:00 Noon (New York City time) on the next succeeding
Business Day following delivery of such Withdrawal Certificate to the Collateral
Agent). Section 8. Representations and Warranties. The Borrower represents and
warrants as follows as of the date hereof: Security Agreement
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(a) The Borrower’s exact legal name, type of organization, jurisdiction of
organization and organizational identification number is set forth in Schedule
VI hereto. The Borrower has no trade names other than as listed on Schedule VI
hereto. Within the five years preceding the date hereof, the Borrower has not
changed its name, type of organization, jurisdiction of organization or
organizational identification number from those set forth in Schedule VI hereto
except as set forth in Schedule VII hereto. (b) The Borrower is the legal and
beneficial owner of the Collateral granted or purported to be granted by it free
and clear of any Lien, claim, option or right of others, except for the security
interest created under this Agreement or permitted under the Credit Agreement.
No effective financing statement or other instrument similar in effect covering
all or any part of such Collateral or listing the Borrower or any trade name of
the Borrower as debtor is on file in any recording office, except such as may
have been filed in favor of the Collateral Agent relating to the Financing
Documents. (c) The Borrower has no material Equipment or Inventory. (d) None of
the Receivables or Agreement Collateral is evidenced by a promissory note or
other instrument in excess of $250,000 that has not been delivered to the
Collateral Agent. (e) PSE, as an issuer of Security Collateral, has received
notice of the security interest granted hereunder. (f) The Pledged Equity
pledged by the Borrower hereunder has been duly authorized and validly issued
and is fully paid and non assessable. The Pledged Debt pledged by the Borrower
hereunder has been duly authorized, authenticated or issued and delivered, is
the legal, valid and binding obligation of the issuers thereof, is evidenced by
one or more promissory notes (which promissory notes have been delivered to the
Collateral Agent) and is not in default. (g) The Initial Pledged Equity pledged
by the Borrower constitutes 100% of the issued and outstanding Equity Interests
of PSE. (h) The Borrower has no investment property, other than the investment
property listed on Schedule I hereto and additional investment property as to
which the Borrower has complied with the requirements of Section 4. (i) The
Assigned Agreements to which the Borrower is a party, true and complete copies
of which (other than the Interest Hedging Agreements) have been furnished to the
Collateral Agent, have been duly authorized, executed and delivered by all
parties thereto, have not been amended, amended and restated, supplemented or
otherwise modified, are in full force and effect and are binding upon and
enforceable against all parties thereto in accordance with their terms. The
Borrower is not in default and, to the Borrower’s knowledge, there exists no
default under any Assigned Agreement to which the Borrower is a party by any
other party thereto. (j) The Borrower has no deposit accounts, other than the
Pledged Deposit Accounts listed on Schedule II hereto and additional Pledged
Deposit Accounts as to which the Borrower has complied with the applicable
requirements of Section 5. (k) The Borrower is not a beneficiary or assignee
under any letter of credit, other than the letter of credit described in
Schedule VIII hereto and additional letters of credit as to which the Borrower
has complied with the requirements of Section 16. Security Agreement
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(l) This Agreement creates in favor of the Collateral Agent for the benefit of
the Secured Parties a valid security interest in the Collateral granted by the
Borrower, securing the payment of the Secured Obligations; all actions necessary
to obtain control of Collateral as provided in Sections 9-104, 9-106 and 9-107
of the UCC have been taken (other than deposit accounts described in Section
5(a)) and upon the filing with the Washington Department of Licensing of an
appropriate UCC financing statement naming the Borrower as debtor and the
Collateral Agent as secured party and describing the collateral as “all assets”
the security interest of the Collateral Agent in all collateral that can be
perfected by the filing of a UCC financing statement will be taken and such
security interest will be perfected and will be first priority, subject to no
other Liens other than Permitted Collateral Liens. (m) No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or any other third party is required for (i) the
grant by the Borrower of the security interest granted hereunder or for the
execution, delivery or performance of this Agreement by the Borrower, (ii) the
perfection or maintenance of the security interest created hereunder (including
the first priority nature of such security interest), except for the filing of
financing and continuation statements under the UCC, which financing statements
have been duly filed and are in full force and effect, the recordation of the
Intellectual Property Security Agreements referred to in Section 13(f) with the
U.S. Patent and Trademark Office and the U.S. Copyright Office, and the actions
described in Section 4 with respect to the Security Collateral, which actions
have been taken and are in full force and effect, or (iii) the exercise by the
Collateral Agent of its voting or other rights provided for in this Agreement or
the remedies in respect of the Collateral pursuant to this Agreement, except as
may be required in connection with the disposition of any portion of the
Security Collateral by laws affecting the offering and sale of securities
generally or as may be required in connection with the disposition of any
portion of the Collateral under Section 203 of the Federal Power Act or chapter
80.12 of the Revised Code of Washington. (n) The Borrower has no material
Intellectual Property Collateral. (o) The Borrower has no commercial tort claims
other than those listed in Schedule V hereto and additional commercial tort
claims as to which the Borrower has complied with the requirements of Section
17. Section 9. Further Assurances. (a) The Borrower agrees that from time to
time, at the expense of the Borrower, the Borrower will promptly execute and
deliver, or otherwise authenticate, all further instruments and documents, and
take all further action that may be necessary or desirable, or that the
Collateral Agent may reasonably request, in order to perfect and protect any
pledge or security interest granted or purported to be granted by the Borrower
hereunder or to enable the Collateral Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral of the Borrower; provided,
however, that in no event shall the Borrower be required to cause the notation
of any security interest on any certificate of title. (b) The Borrower hereby
authorizes the Collateral Agent to file one or more financing or continuation
statements, and amendments thereto, including, without limitation, one or more
financing statements indicating that such financing statements cover all assets
or all personal property (or words of similar effect) of the Borrower,
regardless of whether any particular asset described in such financing
statements falls within the scope of the UCC or the granting clause of this
Agreement. A photocopy or other reproduction of this Agreement shall be
sufficient as a financing statement where permitted by law. The Borrower
ratifies its authorization for the Collateral Agent to have filed such financing
statements, continuation statements or amendments filed prior to the date
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(c) The Borrower will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral of
the Borrower and such other reports in connection with such Collateral as the
Collateral Agent may reasonably request, all in reasonable detail. Section 10.
Reserved. Section 11. Reserved. Section 12. Post-Closing Changes; Collections on
Assigned Agreements, Receivables and Related Contracts. (a) The Borrower will
not change its name, type of organization, jurisdiction of organization or
organizational identification number from those set forth in Section 8(a) of
this Agreement (except in connection with the Merger) without first giving at
least 20 days’ prior written notice to the Collateral Agent and taking all
action reasonably required by the Collateral Agent for the purpose of perfecting
or protecting the security interest granted by this Agreement. The Borrower will
hold and preserve its records relating to the Collateral, including, without
limitation, the Assigned Agreements and Related Contracts, and will permit
representatives of the Collateral Agent to inspect and make abstracts from such
records and other documents as set forth in Section 6.18 of the Credit Agreement
and otherwise specified in the Additional Credit Documents. If the Borrower does
not have an organizational identification number and later obtains one, it will
forthwith notify the Collateral Agent of such organizational identification
number. (b) Except as otherwise provided in this subsection (b), the Borrower
will continue to collect, at its own expense, all amounts due or to become due
the Borrower under the Assigned Agreements, Receivables and Related Contracts.
In connection with such collections, the Borrower may take such action as the
Borrower or the Collateral Agent may deem necessary to enforce collection of the
Assigned Agreements, Receivables and Related Contracts; provided, however, that,
subject to the terms of the Collateral Agency Agreement, the Collateral Agent
shall have the right at any time, upon the occurrence and during the continuance
of an Event of Default and upon written notice to the Borrower of its intention
to do so, to notify the Obligors under any Assigned Agreements, Receivables and
Related Contracts of the assignment of such Assigned Agreements, Receivables and
Related Contracts to the Collateral Agent and to direct such Obligors to make
payment of all amounts due or to become due to the Borrower thereunder directly
to the Collateral Agent and, upon such notification and at the expense of the
Borrower, to enforce collection of any such Assigned Agreements, Receivables and
Related Contracts, to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as the Borrower might have
done, and to otherwise exercise all rights with respect to such Assigned
Agreements, Receivables and Related Contracts, including, without limitation,
those set forth in Section 9-607 of the UCC. After receipt by the Borrower of
the notice from the Collateral Agent referred to in the proviso to the preceding
sentence, (i) all amounts and proceeds (including, without limitation,
instruments) received by the Borrower in respect of the Assigned Agreements,
Receivables and Related Contracts of the Borrower shall be received in trust for
the benefit of the Collateral Agent hereunder, shall be segregated from other
funds of the Borrower and shall be forthwith paid over to the Collateral Agent
in the same form as so received (with any necessary indorsement) to be deposited
in an account secured for the benefit of the Collateral Agent on behalf of the
Secured Parties and either (A) released to the Borrower on the terms set forth
in Section 7 so long as no Default under Section 8.01(a), (f) or (k) of the
Credit Agreement, any substantially similar Default under any Additional Credit
Document or any Event of Default shall have occurred and be continuing or (B) if
any such event shall have occurred and be continuing, applied as provided in
Section 22(b) and (ii) the Borrower will not adjust, settle or compromise the
amount or payment of any Receivable or amount due on any Assigned Agreement or
Related Contract, release wholly or partly any Obligor thereof or allow any
credit or discount thereon. The Borrower will not permit or consent to the
subordination of its right to payment under any of the Security Agreement
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Assigned Agreements, Receivables and Related Contracts to any other Indebtedness
or obligations of the Obligor thereof. Section 13. As to Intellectual Property
Collateral. The Borrower agrees that should it obtain an ownership interest in
any item of the type set forth in Section 1(g), (a) the provisions of this
Agreement shall automatically apply thereto and (b) the Borrower shall execute
and deliver to the Collateral Agent any agreement, instrument or other document
reasonably requested by the Collateral Agent to perfect the security interest in
such Collateral. Section 14. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default hall have occurred and be continuing: (i) The Borrower shall be
entitled to exercise any and all voting and other consensual rights pertaining
to the Security Collateral of the Borrower or any part thereof for any purpose;
provided however, that the Borrower will not exercise or refrain from exercising
any such right if such action would have a material adverse effect on the value
of the Security Collateral or any part thereof. (ii) The Borrower shall be
entitled to receive and retain any and all dividends, interest and other
distributions paid in respect of the Security Collateral of the Borrower if and
to the extent that the payment thereof is not otherwise prohibited by the terms
of the Credit Documents; provided, however, that any and all (A) dividends,
interest and other distributions paid or payable other than in cash in respect
of, and instruments and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Security Collateral, (B)
dividends and other distributions paid or payable in cash in respect of any
Security Collateral in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus or
paid in surplus, and (C) cash paid, payable or otherwise distributed in respect
of principal of, or in redemption of, or in exchange for, any Security
Collateral shall be, and shall be forthwith delivered to the Collateral Agent to
hold as, Security Collateral and shall, if received by the Borrower, be received
in trust for the benefit of the Collateral Agent, be segregated from the other
property or funds of the Borrower and be forthwith delivered to the Collateral
Agent as Security Collateral in the same form as so received (with any necessary
indorsement). (iii) The Collateral Agent will execute and deliver (or cause to
be executed and delivered) to the Borrower all such proxies and other
instruments as the Borrower may reasonably request for the purpose of enabling
the Borrower to exercise the voting and other rights that it is entitled to
exercise pursuant to paragraph (i) above and to receive the dividends or
interest payments that it is authorized to receive and retain pursuant to
paragraph (ii) above. (b) Upon the occurrence and during the continuance of an
Event of Default: (i) All rights of the Borrower (x) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 14(a)(i) shall, upon notice to the
Borrower by the Collateral Agent, cease and (y) to receive the Security
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dividends, interest and other distributions that it would otherwise be
authorized to receive and retain pursuant to Section 14(a)(ii) shall
automatically cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall thereupon have the sole right to exercise or
refrain from exercising such voting and other consensual rights and to receive
and hold as Security Collateral such dividends, interest and other
distributions. (ii) All dividends, interest and other distributions that are
received by the Borrower contrary to the provisions of paragraph (i) of this
Section 14(b) shall be received in trust for the benefit of the Collateral
Agent, shall be segregated from other funds of the Borrower and shall be
forthwith paid over to the Collateral Agent as Security Collateral in the same
form as so received (with any necessary indorsement). Section 15. Reserved .
Section 16. As to Letter-of-Credit Rights. (a) The Borrower, by granting a
security interest in its Receivables consisting of letter-of-credit rights to
the Collateral Agent, intends to (and hereby does) assign to the Collateral
Agent its rights (including its contingent rights) to the proceeds of all
Related Contracts consisting of letters of credit of which it is or hereafter
becomes a beneficiary or assignee. The Borrower will promptly use commercially
reasonable efforts to cause the issuer of each letter of credit and each
nominated person (if any) with respect thereto to consent to such assignment of
the proceeds thereof pursuant to a consent in form and substance reasonably
satisfactory to the Collateral Agent and deliver written evidence of such
consent to the Collateral Agent. (b) Upon the occurrence of an Event of Default,
the Borrower will, promptly upon request by the Collateral Agent, (i) notify
(and the Borrower hereby authorizes the Collateral Agent to notify) the issuer
and each nominated person with respect to each of the Related Contracts
consisting of letters of credit that the proceeds thereof have been assigned to
the Collateral Agent hereunder and any payments due or to become due in respect
thereof are to be made directly to the Collateral Agent or its designee and (ii)
with respect to any letters of credit that are transferable, arrange for the
Collateral Agent to become the transferee beneficiary of letter of credit.
Section 17. Commercial Tort Claims. The Borrower will promptly give notice to
the Collateral Agent of any commercial tort claim that may arise after the date
hereof and will immediately execute or otherwise authenticate a supplement to
this Agreement, and otherwise take all necessary action, to subject such
commercial tort claim to the first priority security interest created under this
Agreement. Section 18. Transfers and Other Liens; Additional Shares. (a) The
Borrower agrees that it will not (i) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Collateral other than as permitted
under the terms of the Credit Documents, or (ii) create or suffer to exist any
Lien upon or with respect to any of the Collateral of the Borrower except for
the pledge, assignment and security interest created under this Agreement and
Liens permitted under the Credit Documents. (b) The Borrower agrees that it will
(i) cause PSE not to issue any Equity Interests in addition to or in
substitution for the Pledged Equity issued by such issuer, except to the
Borrower, and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional Equity Interests issued to it.
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Section 19. Collateral Agent Appointed Attorney in Fact. The Borrower hereby
irrevocably appoints the Collateral Agent the Borrower’s attorney in fact, with
full authority in the place and stead of the Borrower and in the name of the
Borrower or otherwise, from time to time, upon the occurrence and during the
continuance of an Event of Default, in the Collateral Agent’s discretion, to
take any action and to execute any instrument that the Collateral Agent may deem
necessary to accomplish the purposes of this Agreement, including, without
limitation: (a) to ask for, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral, (b) to receive, indorse and collect any
drafts or other instruments, documents and chattel paper, in connection with
clause (a) above, and (c) to file any claims or take any action or institute any
proceedings that the Collateral Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce compliance with the
terms and conditions of any Assigned Agreement or the rights of the Collateral
Agent with respect to any of the Collateral. Section 20. Collateral Agent May
Perform. If the Borrower fails to perform any agreement contained herein, the
Collateral Agent may, but without any obligation to do so and without notice,
itself perform, or cause performance of, such agreement, and the expenses of the
Collateral Agent incurred in connection therewith shall be payable by the
Borrower under Section 23. Section 21. The Collateral Agent’s Duties. (a) The
powers conferred on the Collateral Agent hereunder are solely to protect the
Secured Parties’ interest in the Collateral and shall not impose any duty upon
it to exercise any such powers. Except for the safe custody of any Collateral in
its possession and the accounting for moneys actually received by it hereunder,
the Collateral Agent shall have no duty as to any Collateral, as to ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not any Secured
Party has or is deemed to have knowledge of such matters, or as to the taking of
any necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which it accords its own property. (b) Anything contained herein to the
contrary notwithstanding, the Collateral Agent may from time to time, when the
Collateral Agent deems it to be necessary, appoint one or more subagents (each a
“Subagent”) for the Collateral Agent hereunder with respect to all or any part
of the Collateral. In the event that the Collateral Agent so appoints any
Subagent with respect to any Collateral, (i) the assignment and pledge of such
Collateral and the security interest granted in such Collateral by the Borrower
hereunder shall be deemed for purposes of this Security Agreement to have been
made to such Subagent, in addition to the Collateral Agent, for the ratable
benefit of the Secured Parties, as security for the Secured Obligations, (ii)
such Subagent shall automatically be vested, in addition to the Collateral
Agent, with all rights, powers, privileges, interests and remedies of the
Collateral Agent hereunder with respect to such Collateral, and (iii) the term
“Collateral Agent,” when used herein in relation to any rights, powers,
privileges, interests and remedies of the Collateral Agent with respect to such
Collateral, shall include such Subagent; provided, however, that no such
Subagent shall be authorized to take any action with respect to any such
Collateral unless and except to the extent expressly authorized in writing by
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Section 22. Remedies. If any Event of Default shall have occurred and be
continuing: (a) The Collateral Agent may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party upon default
under the UCC (whether or not the UCC applies to the affected Collateral) and
also may: (i) require the Borrower to, and the Borrower hereby agrees that it
will at its expense and upon request of the Collateral Agent forthwith, assemble
all or part of the Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place and time to be designated by the
Collateral Agent that is reasonably convenient to both parties; (ii) without
notice except as specified below, sell the Collateral or any part thereof in one
or more parcels at public or private sale, at any of the Collateral Agent’s
offices or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Collateral Agent may deem commercially reasonable; (iii)
occupy any premises owned or leased by any of the Borrower where the Collateral
or any part thereof is assembled or located for a reasonable period in order to
effectuate its rights and remedies hereunder or under law, without obligation to
the Borrower in respect of such occupation; and (iv) exercise any and all rights
and remedies of the Borrower under or in connection with the Collateral, or
otherwise in respect of the Collateral, including, without limitation, (A) any
and all rights of the Borrower to demand or otherwise require payment of any
amount under, or performance of any provision of, the Assigned Agreements, the
Receivables, the Related Contracts and the other Collateral, (B) withdraw, or
cause or direct the withdrawal, of all funds with respect to the Account
Collateral and (C) exercise all other rights and remedies with respect to the
Assigned Agreements, the Receivables, the Related Contracts and the other
Collateral, including, without limitation, those set forth in Section 9-607 of
the UCC. The Borrower agrees that, to the extent notice of sale shall be
required by law, at least ten days’ prior written notice to the Borrower of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Collateral Agent shall not
be obligated to make any sale of Collateral regardless of notice of sale having
been given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. (b) Any cash held by or on behalf of the Collateral Agent and all
cash proceeds received by or on behalf of the Collateral Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Collateral Agent, be held by the
Collateral Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Collateral Agent pursuant
to Section 23) in whole or in part by the Collateral Agent for the ratable
benefit of the Secured Parties against, all or any part of the Secured
Obligations, in accordance with the Collateral Agency Agreement. (c) All
payments received by the Borrower under or in connection with any Assigned
Agreement or otherwise in respect of the Collateral shall be received in trust
for the benefit of the Collateral Agent, shall be segregated from other funds of
the Borrower and shall be forthwith paid over to the Collateral Agent in the
same form as so received (with any necessary indorsement). (d) The Collateral
Agent may, without notice to the Borrower except as required by law and at any
time or from time to time, charge, set off and otherwise apply all or any part
of the Secured Obligations against any funds held with respect to the Account
Collateral or in any other deposit account of the Borrower. Security Agreement
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(e) The Collateral Agent may send to each bank, securities intermediary or
issuer party to any Deposit Account Control Agreement, Securities/Deposit
Account Control Agreement, Securities Account Control Agreement or
Uncertificated Security Control Agreement a “Notice of Exclusive Control” as
defined in and under such Agreement. Section 23. Indemnity and Expenses. The
Borrower agrees to indemnify, defend and save and hold harmless each Secured
Party, and to pay the expenses of the Collateral Agent, in each case in
connection with this Agreement, as set forth in Sections 10.04 and 10.05 of the
Credit Agreement as if such sections were set forth in this Agreement mutatis
mutandis. Section 24. Amendments; Waivers; Additional Borrower; Etc. No
amendment or waiver of any provision of this Agreement, and no consent to any
departure by the Borrower herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Collateral Agent (and the Borrower in
the case of an amendment or waiver), and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Collateral Agent or any other Secured Party
to exercise, and no delay in exercising any right hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. Section 25. Notices, Etc. All notices and other communications provided
for hereunder shall be provided in accordance with the Collateral Agency
Agreement. Section 26. Continuing Security Interest; Assignments under the
Credit Documents. This Agreement shall create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the
indefeasible payment in full in cash of the Secured Obligations (other than any
contingent indemnity obligations not then due), termination of the Commitments
and the termination or expiration of the Interest Hedging Agreements, (b) be
binding upon the Borrower, its successors and assigns and (c) inure, together
with the rights and remedies of the Collateral Agent hereunder, to the benefit
of the Secured Parties and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), any Lender or
Additional Secured Party may assign or otherwise transfer all or any portion of
its rights and obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitments, the Loans owing to it and the
Note or Notes, if any, held by it) or Additional Credit Document, as the case
may be, to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to such Lender or Additional
Secured Party, as the case may be, herein or otherwise, in each case as provided
in Section 10.07 of the Credit Agreement or in the Additional Credit Documents,
as applicable. Section 27. Termination. Upon the indefeasible payment in full in
cash of the Secured Obligations (other than any contingent indemnity obligations
not then due), termination of the Commitments and the termination or expiration
of the Interest Hedging Agreements, the security interest created by this
Agreement shall terminate and all rights to the Collateral shall revert to the
Borrower, and the Collateral Agent shall (at the written request and sole cost
and expense of the Borrower) promptly cause to be transferred and delivered,
against receipt but without any recourse, warranty or representation whatsoever,
any remaining Collateral and money received in respect thereof, to or on the
order of the Borrower. The Collateral Agent shall also (at the written request
and sole cost and expense of the Borrower) promptly execute and deliver to the
Borrower upon such termination such Uniform Commercial Code termination
statements, and such other documentation as shall be reasonably requested by the
Borrower to effect the termination and release of the Liens on the Collateral.
Section 28. Collateral Agency Agreement Controls. Notwithstanding anything
herein to the contrary, the lien and security interest granted to the Collateral
Agent, for the benefit of the Secured Security Agreement
07771-0276/LEGAL17986459.2 5/4/10

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Parties pursuant to this Agreement and any other Security Document and related
agreements (including any control agreements executed pursuant to the
requirements of this Agreement), and the exercise of any right or remedy by the
Collateral Agent in respect of the Collateral are subject to the provisions of
the Collateral Agency Agreement. In the event of any conflict or inconsistency
between the provisions of this Agreement, any other Security Documents and any
such related document and the Collateral Agency Agreement, the provisions of the
Collateral Agency Agreement shall govern and control. Notwithstanding anything
herein to the contrary, in accordance with the provisions of Sections 2.02(b),
2.05(b) and 4.05(c), the Lock-Up Account and any funds, cash, Securities
Entitlements credited thereto and any proceeds thereof shall be held by the
Collateral Agent solely for the benefit of the Lenders until all Credit
Agreement Obligations shall have been indefeasibly paid in full in cash. Section
29. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier or other means of electronic delivery shall be effective as delivery
of an original executed counterpart of this Agreement. Section 30. Governing
Law. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York. Any legal action or proceeding arising under this
Agreement or in any way connected with or related or incidental to the dealings
of the parties hereto or any of them with respect to this Agreement, in each
case whether now existing or hereafter arising, may be brought in the courts of
the State of New York sitting in New York City or of the United States for the
Southern District of such state, and by execution and delivery of this
Agreement, the Borrower consents, for itself and in respect of its property, to
the non-exclusive jurisdiction of those courts. The Borrower waives any
objection, including any objection to the laying of venue or based on the
grounds of forum non conveniens, which it may now or hereafter have to the
bringing of any action or proceeding in such jurisdiction in respect of this
Agreement or any Financing Document. Section 31. Waiver of Right to Trial by
Jury. Each party to this Agreement hereby expressly waives any right to trial by
jury of any claim, demand, action or cause of action arising under this
Agreement or in any way connected with or related or incidental to its dealings
with respect to this Agreement, or the transactions related thereto, in each
case whether now existing or hereafter arising, and whether founded in contract
or tort or otherwise; and each party to this Agreement hereby agrees and
consents that any such claim, demand, action or cause of action shall be decided
by court trial without a jury, and that any party to this Agreement may file an
original counterpart or a copy of this Section 31 with any court as written
evidence of the consent of the signatories hereto to the waiver of its right to
trial by jury. Section 32. Original Schedules and Exhibits. Each of the
Schedules and Exhibits attached to the Security Agreement, dated as of February
6, 2009 between the parties hereto, shall be deemed attached to, and form a part
of, this Agreement without any amendment, modification or supplement. [Signature
pages to follow.] Security Agreement 07771-0276/LEGAL17986459.2 5/4/10

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EXECUTION COPY AMENDMENT NO. 1 TO AMENDED AND RESTATED BORROWER SECURITY
AGREEMENT This AMENDMENT NO. 1 TO AMENDED AND RESTATED BORROWER SECURITY
AGREEMENT (this “Amendment”), is made as of February 10, 2012, by and between
JPMORGAN CHASE BANK, N.A., in its capacity as successor Collateral Agent (as
defined below) and PUGET ENERGY, INC., as borrower (the “Borrower”). Capitalized
terms used but not otherwise defined herein shall have the respective meanings
given to them in the Amended and Restated Collateral Agency Agreement (described
below). WHEREAS, on the date hereof, Barclays Bank PLC resigned as Collateral
Agent under than certain Amended and Restated Collateral Agency Agreement, dated
as of February 6, 2009 and as amended and restated as of March 31, 2010, among
the Borrower, Puget Equico LLC, Barclays Bank PLC, as collateral agent and
Barclays Bank PLC, as facility agent; WHEREAS, pursuant to Amendment No. 1 to
Amended and Restated Collateral Agency Agreement, dated as of the date hereof,
JPMorgan Chase Bank, N.A. was appointed as successor Collateral Agent (in such
capacity, the “Collateral Agent”); WHEREAS, the Collateral Agent and the
Borrower wish to amend that certain Amended and Restated Borrower Security
Agreement, dated February 6, 2009 and as amended and restated as of March 31,
2010, between Collateral Agent, as successor collateral agent and the Borrower
(as amended, restated, supplemented or otherwise modified prior to the date
hereof, the “Agreement”); NOW THEREFORE, in consideration of the premises set
forth above, the terms and conditions contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto have agreed to amend the Agreement as follows.
SECTION 1. Amendments to Agreement. (a) The preamble of the Agreement is amended
to replace the word “Company” appearing therein with the word “Borrower”. (b)
Recital (1) to the Agreement is amended and restated in its entirety to read as
follows: (1) The Borrower is party to that certain Credit Agreement, dated as of
February 10, 2012, among the financial institutions from time to time party
thereto as lenders and JPMorgan Chase Bank, N.A., as administrative agent (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”). (c) Recital (6) to the Agreement is amended to (i) delete
the punctuation mark “,” appearing immediately following the phrase “under the
Credit Agreement” appearing therein and to replace such punctuation mark with
the word “and” and (ii) to delete the word “the” appearing immediately following
the phrase “Borrower shall have granted” appearing therein. (d) Recital (7) to
the Agreement is amended to (i) insert the phrase “Puget Equico LLC,”
immediately following the phrase “among the Borrower,” appearing therein and
(ii) to delete the last sentence thereof in its entirety. (e) Recitals (2) and
(5) to the Agreement are deleted in their entirety.

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(f) Recitals (3), (4), (6), (7) and (8) are renumbered as recitals (2), (3),
(4), (5) and (6) respectively. (g) Clause (d) of Section 1 of the Agreement is
amended to (x) insert the word “and” at the end of clause (iii) thereof, (y)
delete clause (iv) appearing therein in its entirety and (z) renumber clause (v)
appearing therein as clause (iv). (h) Section 4 of the Agreement is amended to
(i) delete the phrase “the Lock-Up Account and” appearing in clause (a) thereof,
(ii) delete the phrase “, and to convert Security Collateral consisting of
financial assets held directly by the Collateral Agent to Security Collateral
consisting of financial assets credited to the Lock-Up Account” appearing in
clause (c) thereof and (iii) to delete clause (e) thereof in its entirety. (i)
Clause (b) of Section 4 of the Agreement is amended to insert at the end thereof
the following proviso “provided, the deadline for delivery of a Securities
Account Control Agreement in respect of Account No. 13014261 maintained at Wells
Fargo Securities, LLC shall be February 29, 2012 (or such later date as may be
agreed to by the Collateral Agent in its sole discretion). (j) Clause (a) of
Section 5 of the Agreement is amended to (i) insert the sub-heading “(x)”
immediately preceding the phrase “this Section 5(a) shall not” appearing therein
and (ii) insert immediately following the phrase “(ii) operated solely as a
payroll account” the phrase “and (y) the deadline for delivery of a Deposit
Account Control Agreement in respect of Account No. 1139127 maintained at The
Bank of New York Mellon shall be February 29, 2012 (or such later date as may be
agreed to by the Collateral Agent in its sole discretion). (k) Clause (a) of
Section 7 of the Agreement is amended to delete the section reference “Section
8.01(a), (f) or (k)” appearing therein and to replace such section reference
with the section reference “clauses (a), (h) or (i) of Article VII”. (l) Clause
(b), including all subsections thereof, of Section 7 of the Agreement is deleted
in its entirety. (m) Clause (a) of Section 12 of the Agreement is amended to (i)
delete the section reference “Section 6.18” appearing therein and to replace
such section reference with the section reference “Section 5.15” and (ii) delete
in its entirety the parenthetical “(except in connection with the Merger)”
appearing therein. (n) Clause (b) of Section 12 of the Agreement is amended to
delete the section reference “Section 8.01(a), (f) or (k)” appearing therein and
to replace such section reference with the section reference “clauses (a), (h)
or (i) of Article VII”. (o) Section 23 of the Agreement is amended to delete the
section reference “Sections 10.04 and 10.05” appearing therein and to replace
such section reference with the section reference “Section 9.03”. (p) Section 26
of the Agreement is amended to delete the section reference “Section 10.07”
appearing therein and to replace such section reference with the section
reference “Section 9.04”. (q) Section 28 of the Agreement is amended to delete
the last sentence thereof in its entirety. 2

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(r) The Agreement is amended to replace each reference to “Barclays Bank PLC”
with “JPMorgan Chase Bank, N.A.”. SECTION 2. Conditions of Effectiveness. This
Amendment shall become effective as of the date hereof (the “Effective Date”)
when, and only when (i) the Collateral Agent shall have received an executed
counterpart of this Amendment from the Collateral Agent and the Borrower and
(ii) the New Credit Agreement shall become effective in accordance with its
terms and conditions. SECTION 3. Representations and Warranties. Each of the
parties hereto represents and warrants that this Amendment and the Agreement, as
amended by this Amendment, constitute legal, valid and binding obligations of
such party enforceable against such party in accordance with their terms, except
as enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors’ rights generally and general equitable
principles. SECTION 4. Reference to and the Effect on the Agreement. (a) On and
after the effective date of this Amendment, each reference in the Agreement to
“this Agreement”, “hereunder”, “hereof”, “herein” or words of like import
referring to the Agreement and each reference to the Agreement in any
certificate delivered in connection therewith, shall mean and be a reference to
the Agreement as amended hereby. (b) Each of the parties hereto hereby agrees
that, except as specifically amended above, the Agreement is hereby ratified and
confirmed and shall continue to be in full force and effect and enforceable,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors’ rights
generally and general equitable principles. SECTION 5. Headings. Section
headings in this Amendment are included herein for convenience only and shall
not constitute a part of this Amendment for any other purpose. SECTION 6.
Execution in Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same agreement.
Delivery of an executed counterpart to this Amendment by facsimile, electronic
mail, portable document format (PDF) or similar means shall be effective as
delivery of a manually executed counterpart of this Amendment. SECTION 7.
Governing Law. This Amendment shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York. [REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK] 3

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lN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the day and year first
above written. By:
__;::~---=-::::....:......::....:._.,c..._...LJ[.1t..--~a..t-. Name: Donald E.
Title: Vice Presid Signature Page lo A111end111e11t No. l to Amended and
Restated Borrower Security Agreement

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JPMORGAN CHASE BANK, N.A .. as successor Collateral Agent B~:e~. Name: Helen D.
Davis Title: Vic;e President Signature Page to Amendment No. I lo Amended and
Resfaled Borrower Security Agreement

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EXHIBIT M TERMS OF SUBORDINATION [ATTACHED]

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EXHIBIT M TERMS OF SUBORDINATION These terms refer to the Amended and Restated
Credit Agreement, dated as of October 25, 2017 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Puget Energy, Inc., a Washington corporation (the “Borrower”), the Lenders
party thereto from time to time and JPMorgan Chase Bank, N.A., in its capacity
as administrative agent for the Lenders (in such capacity, the “Administrative
Agent”). Capitalized terms shall, unless otherwise defined in these terms, have
the meaning given in the Credit Agreement or, if not defined therein, the
meaning given in the Collateral Agency Agreement. All Management Fees payable by
the Borrower and its Subsidiaries shall include or be subject to the following
terms: 1. General. To the extent and in the manner set forth herein, the payment
of any Management Fee is expressly made subordinate and subject in right of
payment to the prior payment in full of all the Obligations. Except to the
extent permitted pursuant to the last sentence of this paragraph, any Person
entitled to payment of Management Fees (each a “Payee”) agrees that it will not
ask, demand, sue for, take or receive from the Borrower, by set-off or in any
other manner, or retain payment (in whole or in part) of the Management Fees, or
any security therefor, unless and until all of the Obligations have been paid in
full in cash and the Commitments terminated (other than contingent obligations
not then due). Each Payee directs the Borrower to make, and the Borrower agrees
to make, such prior payment of the Obligations. Notwithstanding the foregoing,
payment by the Borrower of or in respect of the Management Fees may be made, and
the Payees may ask, demand, sue for, take or receive from the Borrower, by
set-off or in any other manner, or retain payment of (in whole or in part) the
Management Fees. 2. Payment Upon Dissolution, Etc. In the event of: (a) any
insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection therewith,
relative to the Borrower or any of its Subsidiaries or to any of their creditors
as such, or to any of their assets; or (b) any liquidation, dissolution or other
winding up of the Parent or the Borrower or any of its Subsidiaries, whether
partial or complete and whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy; or (c) any assignment for the benefit of
creditors or any other marshalling of all or any substantial part of the assets
and liabilities of the Parent or the Borrower or any of its Subsidiaries; then
and in any such event the Secured Parties shall be entitled to receive payment
in full of all amounts due or to become due on or in respect of all the
Obligations before the Payees shall be entitled to receive any payment on
account of the Management Fees, and to that end, any payment or distribution of
any kind or character, whether in cash, property or securities which may be
payable or deliverable in respect of the Management Fees, proceeding,
dissolution, liquidation or other winding up or event shall instead be paid or
delivered directly to the Secured ACTIVE 226113196v.1

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Parties for application to the Obligations, whether or not due, until the
Obligations shall have first been fully paid and satisfied in cash (other than
contingent obligations not then due). 3. No Payment When Credit Agreement in
Default. Except as may be permitted pursuant to the Credit Agreement, if any
Default or Event of Default has occurred and is continuing, then no payment
shall be made by the Borrower on or in respect of the Management Fees. 4.
Proceedings Against Borrower; No Collateral. The Payees shall not, without the
prior written consent of the Unanimous Voting Parties (as long as any Obligation
is outstanding): (a) commence any judicial action or proceeding to collect
payment of principal of or interest on the Management Fees; or (b) commence any
judicial action or proceeding against the Borrower in bankruptcy, insolvency or
receivership law; or (c) take any collateral security for the Management Fees.
5. Further Assurances. Each Payee agrees to execute and deliver to the Secured
Parties all such further instruments, proofs of claim, assignments of claim and
other instruments, and take all such other action, as may be reasonably
requested by the Secured Parties to enforce the Secured Parties rights
hereunder. 6. Notice; Disclosure. The Payees agree, for the benefit of each
Secured Party, that they will give the Collateral Agent on behalf of each
Secured Party prompt notice of any default by the Borrower of which the Payees
are aware in respect of the Management Fees. 7. No Waiver; Modification to
Credit Agreement. (a) No failure on the part of the Secured Parties, and no
delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof by the Secured Parties, nor shall any single or partial exercise
by the Secured Parties of any right, remedy or power hereunder shall preclude
any other or future exercise of any other right remedy or power. Each and every
right, remedy and power hereby granted to the Secured Parties or allowed to the
Secured Parties by law or other agreement shall be cumulative and not exclusive
of any other, and may be exercised by the Secured Parties from time to time. All
rights and interests of the Secured Parties hereunder and all agreements and
obligations of the Payees and the Borrower hereunder shall remain in full force
and effect irrespective of: (i) any lack of validity or enforceability of the
Financing Documents; or (ii) any other circumstance that might otherwise
constitute a defense available to, or discharge of, the Borrower. (b) Without in
any way limiting the generality of the foregoing paragraph (a), the Secured
Parties may, at any time and from time to time, without the consent of or notice
to the Payees, without incurring responsibility to the Payees, and without
impairing or releasing the subordination provided herein or the obligations
hereunder of the Payees, do anyone or more of the following: 2

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(i) change the manner, place or terms of payment of or extend the time of
payment of, or renew or alter, the Obligations under the Credit Agreement, or
otherwise amend or supplement in any manner the Credit Agreement or any
instruments evidencing the same or any agreement under which the Obligations are
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing the Obligations; (iii) release any
person liable in any manner for the Obligations; and (iv) exercise or refrain
from exercising any rights against the Borrower or any other person. 8. Benefit
of Subordination Provisions. These subordination provisions are intended to
benefit the Secured Parties. 9. Provisions Solely to Define Relative Rights.
These subordination provisions are intended solely for the purpose of defining
the relative rights of the Payees and their successors and assigns, on the one
hand, and the Secured Parties and their successors and assigns, on the other
hand. 10. Transfers of Subordinated Debt. The Payees shall not sell, assign,
pledge, encumber or transfer the interests in the Management Fees unless such
sale, assignment, pledge, encumbrance or transfer is to a party that agrees to
be bound by the terms hereof. The interests in the Management Fees shall remain
expressly subject to the terms hereof, notwithstanding any sale, assignment,
pledge, encumbrance or transfer. 11. Further Assurances. The Payees, at their
cost (to be reimbursed by the Borrower on the same terms as payment of the
Management Fees, other than nominal costs), shall take all further action as the
Secured Parties may reasonably request in order more fully to carry out the
intent and purpose of these subordination provisions. 12. Governing Law. THESE
SUBORDINATION PROVISIONS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. 13. Amendment. These subordination provisions
may not be amended, modified or supplemented without the prior written consent
of each of the Secured Parties. 14. Successors and Assigns. These subordination
provisions shall be binding and inure to the benefit of the Payees, the Secured
Parties and their respective successors and permitted assigns. 3

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EXHIBIT N [FORM OF] PREPAYAMENT NOTICE [COMPANY NAME/HEADER] [Date] To: Mizuho
Bank, Ltd., as Administrative Agent 1800 Plaza Ten, Harborside Financial Center
Jersey City, NJ 07311 Attention of Joyce Raynor Telephone No. (201) 626-9330)
Email: lau_agent@mizuhogroup.com Re: Puget Energy, Inc. This Notice of
Prepayment is delivered to you pursuant to Section 2.11 of that certain Term
Loan Agreement, dated as of September 26, 2019 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Term Loan
Agreement”), among Puget Energy, Inc., as borrower (the “Borrower”), the lender
parties party thereto and Mizuho Bank, Ltd. as administrative agent (in such
capacity, the “Administrative Agent”). Unless otherwise defined herein or the
context otherwise requires, capitalized terms used herein have the meanings
provided in the Term Loan Agreement. The Borrower hereby notifies the
Administrative Agent that on [Date], which is a Business Day (the “Prepayment
Date”), the Borrower shall prepay $[___________] of the principal amount of the
Loans outstanding under the Term Loan Agreement, together with interest accrued
thereon through the Prepayment Date.

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PUGET ENERGY, INC. By: _______________________ Name: Title:

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