Document:

exh10-12.htm

     

     

    
      

      

    

     EXHIBIT
10.12

    

    

    

    SUMMARY
OF KEY TERMS OF COMPENSATION ARRANGEMENTS

     WITH
MIDAMERICAN ENERGY HOLDINGS COMPANY

     NAMED
EXECUTIVE OFFICERS AND DIRECTORS

    

    MidAmerican
Energy Holding Company’s (“MEHC”) continuing named executive officers each
receive an annual salary and participate in health insurance and other benefit
plans on the same basis as other employees, as well as certain other
compensation and benefit plans described in MEHC’s Annual Report on Form
10-K.

    

    The named
executive officers are also eligible to receive a cash incentive award under
MEHC’s Performance Incentive Plan (“PIP”). The PIP provides for a discretionary
annual cash award that is determined on a subjective basis and paid in December.
In addition to the PIP, the named executive officers are eligible to receive
discretionary cash performance awards periodically during the year to reward the
accomplishment of significant non-recurring tasks or projects. Messrs. David L.
Sokol and Gregory E. Abel have not been granted cash performance awards in the
past five years. Messrs. Patrick J. Goodman and Douglas L. Anderson and Ms.
Maureen E. Sammon are participants in MEHC’s Long-Term Incentive Partnership
Plan (“LTIP”). Messrs. Sokol and Abel do not participate in the LTIP. A copy of
the LTIP is attached as Exhibit 10.11 to the MEHC Annual Report on Form 10-K.
Base salary for continuing named executive officers for MEHC’s fiscal year
ending December 31, 2008, is shown in the following table:

    

    
      	 
      

              Name
      and Title

            	 
      

              Base
      Salary

            
	 	 
	
              David
      L. Sokol

              Chairman
      and Chief Executive Officer

            	
              $1,000,000

            
	 	 
	
              Gregory
      E. Abel

              President

            	
              $1,000,000

            
	 	 
	
              Patrick
      J. Goodman

              Senior
      Vice President and Chief Financial Officer

            	
              $   330,000

            
	 	 
	
              Douglas
      L. Anderson

              Senior
      Vice President and General Counsel

            	
              $   300,000

            
	 	 
	
              Maureen
      E. Sammon

              Senior
      Vice President and Chief Administrative Officer

            	
              $   215,000

            

    

    

    Messrs.
Sokol and Abel are directors of MEHC, but do not receive additional compensation
for their service as directors other than what they receive as employees of
MEHC. The other members of the MEHC board of directors do not receive
compensation for their service as directors.Unassociated Document

    

    
      

       

      Exhibit
4.1

    

    
      
 

    (Real
Estate Mortgage)

     

    

     

    

     

    PUGET
SOUND ENERGY, INC.

     

    TO

     

    U.S.
BANK NATIONAL ASSOCIATION,

     

    Trustee

     

    _______________

     

    Eighty-Fifth
Supplemental Indenture

     

    Dated
as of April 27, 2007

     

    _______________

     

    Relating
to First Mortgage Bonds

     

    _______________

     

    Supplemental
to Indenture dated as of

     

    June
2, 1924, as supplemented and modified

     

    _______________

    
      

       

      

    

    
      
 

    (NOT PART OF INDENTURE)

    

    
       

      
         

        
          

        

      

      
         

      

    

    

     

    THIS
EIGHTY-FIFTH SUPPLEMENTAL INDENTURE, made as of the 27th day of April,
2007, by and between Puget Sound Energy, Inc., formerly Puget Sound Power &
Light Company, a corporation duly organized and existing under and by virtue of
the laws of the State of Washington (hereinafter sometimes called the
“Company”), party of the first part, and U.S. Bank National Association, a national banking
association with a
principal corporate trust office at 100 Wall Street, Suite 1600, in the city of
New York and State of New York 10005 (successor to Old Colony Trust Company)
(hereinafter sometimes called the “Trustee”), as Trustee under the First
Mortgage (originally, and before modification thereof by certain supplemental
indentures, called “First and Refunding Mortgage”) from Puget Sound Power &
Light Company, a Massachusetts corporation (hereinafter sometimes called the
“Predecessor Company”), dated as of June 2, 1924 (said Mortgage being
hereinafter sometimes called the “Original Mortgage”), as supplemented and
modified by all indentures supplemental thereto heretofore executed and
delivered, party of the second part;

     

    WITNESSETH:  that

     

    WHEREAS,
the Predecessor Company did by the Original Mortgage, filed for record in the
offices of the Auditors of the Counties of Chelan, Clallam, Cowlitz, Douglas,
Grant, Grays Harbor, Island, Jefferson, King, Kitsap, Kittitas, Lewis, Mason,
Pacific, Pierce, Skagit, Snohomish, Thurston and Whatcom, all in the State of
Washington, and left on file as a chattel mortgage in each of said counties,
convey and pledge certain property therein described to Old Colony Trust
Company, as Trustee, to be held upon the trusts expressed in the Original
Mortgage to equally secure an unlimited authorized amount of mortgage bonds
(therein and herein called the “Bonds”) issued or to be issued in one or more
series, all as more fully provided in the Original Mortgage; and

     

    WHEREAS,
the Predecessor Company, prior to September 1, 1954, had executed and delivered
to the Trustee thirty-nine supplemental indentures, supplementing and in certain
respects modifying the Original Mortgage and providing for the execution,
certification and delivery of Bonds of various series from time to time pursuant
thereto (which Original Mortgage, as so supplemented and modified, is therein
and herein sometimes called the “First Mortgage”); and

     

    WHEREAS,
the Predecessor Company executed and delivered to the Trustee a Fortieth
Supplemental Indenture, dated as of September 1, 1954, which Supplemental
Indenture is divided into two parts, designated as Part I and Part II, and Part
I thereof provided for the establishment and the execution, certification and
delivery initially of Twenty-Five Million Dollars ($25,000,000) principal amount
of a series of Bonds, designated as First Mortgage Bonds, 3-1/2% Series due
1984, and contained certain covenants, restrictions, conditions and provisions
affecting, and provided for certain modifications of, the First Mortgage (the
First Mortgage, as so supplemented and modified by said Part I, being sometimes
in said Fortieth Supplemental Indenture and herein called the “Revised First
Mortgage”) and Part II thereof provided for modifications of the Revised First
Mortgage as therein set forth, which modifications became effective on October
20, 1955 (the Revised First Mortgage as so modified by Part II of the Fortieth
Supplemental Indenture as heretofore, hereby, and hereafter supplemented and
modified being sometimes in said Part II and herein called the “Indenture” and
references herein to Sections, Articles or other provisions of the Indenture
being to the revised or modified provisions thereof as set forth in Part II of
the Fortieth Supplemental Indenture); and

     

    WHEREAS,
the Predecessor Company has heretofore executed and delivered to the Trustee a
Forty-First Supplemental Indenture dated as of December 1, 1954, a Forty-Second
Supplemental Indenture dated as of July 1, 1957, a Forty-Third Supplemental
Indenture dated as of May 1, 1958, a Forty-Fourth Supplemental Indenture dated
as of November l, 1959, and a Forty-Fifth Supplemental Indenture dated as of
April 1, 1960, all of which mortgaged, pledged, assigned, conveyed and
transferred to the Trustee and subjected to the lien of the Indenture additional
property acquired or constructed, and betterments, improvements and additions
made to the mortgaged property, since the execution and delivery of the Fortieth
Supplemental Indenture; and

     

    WHEREAS,
the Company has executed and delivered to the Trustee a Forty-Sixth Supplemental
Indenture dated as of November 10, 1960, whereby the Company has succeeded to
the Predecessor Company with the same effect as if the Company had been named in
the Indenture as the mortgagor company and in the Bonds and coupons as the
obligor thereon or maker thereof, and the Predecessor Company merged into the
Company on November 16, 1960, whereupon the Company acquired all the property,
real, personal or mixed, including all rights, privileges, easements, licenses
and franchises, described in the Indenture and thereby conveyed and mortgaged or
intended so to be, including also all such property acquired by the Predecessor
Company since the execution and delivery of the Original Mortgage, which by the
terms of the Indenture is subjected or intended to be subjected to the lien
thereof; and

     

    WHEREAS,
the Company has executed and delivered to the Trustee the supplemental
indentures set forth herein:

    

    
      	
              
                Supplemental
      Indenture

              

            	
              
                Dated
      as of

              

            
	
              Forty-Seventh
      Supplemental Indenture

            	
              February
      1, 1961

            
	
              Forty-Eighth
      Supplemental Indenture

            	
              November
      1, 1963

            
	
              Forty-Ninth
      Supplemental Indenture

            	
              May
      1, 1964

            
	
              Fiftieth
      Supplemental Indenture

            	
              January
      1, 1966

            
	
              Fifty-First
      Supplemental Indenture

            	
              June
      1, 1967

            
	
              Fifty-Second
      Supplemental Indenture

            	
              February
      1, 1969

            
	
              Fifty-Third
      Supplemental Indenture

            	
              July
      1, 1970

            
	
              Fifty-Fourth
      Supplemental Indenture

            	
              October
      1, 1972

            
	
              Fifty-Fifth
      Supplemental Indenture

            	
              March
      1, 1974

            
	
              Fifty-Sixth
      Supplemental Indenture

            	
              November
      1, 1974

            
	
              Fifty-Seventh
      Supplemental Indenture

            	
              August
      1, 1975

            
	
              Fifty-Eighth
      Supplemental Indenture

            	
              October
      1, 1976

            
	
              Fifty-Ninth
      Supplemental Indenture

            	
              July
      1, 1978

            
	
              Sixtieth
      Supplemental Indenture

            	
              December
      1, 1979

            
	
              Sixty-First
      Supplemental Indenture

            	
              December
      1, 1981

            
	
              Sixty-Second
      Supplemental Indenture

            	
              July
      1, 1984

            
	
              Sixty-Third
      Supplemental Indenture

            	
              January
      1, 1986

            
	
              Sixty-Fourth
      Supplemental Indenture

            	
              April
      1, 1986

            
	
              Sixty-Fifth
      Supplemental Indenture

            	
              April
      1, 1986

            
	
              Sixty-Sixth
      Supplemental Indenture

            	
              August
      1, 1986

            
	
              Sixty-Seventh
      Supplemental Indenture

            	
              November
      1, 1986

            
	
              Sixty-Eighth
      Supplemental Indenture

            	
              September
      1, 1987

            
	
              Sixty-Ninth
      Supplemental Indenture

            	
              February
      1, 1990

            
	
              Seventieth
      Supplemental Indenture

            	
              October
      1, 1990

            
	
              Seventy-First
      Supplemental Indenture

            	
              May
      1, 1991

            
	
              Seventy-Second
      Supplemental Indenture

            	
              August
      1, 1991

            
	
              Seventy-Third
      Supplemental Indenture

            	
              March
      1, 1992

            
	
              Seventy-Fourth
      Supplemental Indenture

            	
              October
      1, 1992

            
	
              Seventy-Fifth
      Supplemental Indenture

            	
              April
      1, 1993

            
	
              Seventy-Sixth
      Supplemental Indenture

            	
              December 1,
      1997

            
	
              Seventy-Seventh
      Supplemental Indenture

            	
              March 1, 1999

            
	
              Seventy-Eighth
      Supplemental Indenture

            	
              October
      1, 2000

            
	
              Seventy-Ninth
      Supplemental Indenture

            	
              May
      1, 2003

            
	
              Eightieth
      Supplemental Indenture

            	
              April 30,
      2004

            
	
              Eighty-First
      Supplemental Indenture

            	
              March
      1, 2005

            
	
              Eighty-Second
      Supplemental Indenture

            	
              April 27,
      2005

            
	
              Eighty-Third
      Supplemental Indenture

            	
              April
      28, 2006

            
	
              Eighty-Fourth
      Supplemental Indenture

            	
              September
      1, 2006

            

    

     

    all of
which mortgaged, pledged, assigned, conveyed and transferred to the Trustee and
subjected to the lien of the Indenture additional property acquired or
constructed, and betterments, improvements and additions made to the mortgaged
property since the execution and delivery of the Fortieth Supplemental
Indenture; and

     

    WHEREAS,
all Bonds of any series heretofore executed, authenticated and delivered
pursuant to the Original Mortgage, as from time to time supplemented and
modified, have been retired and canceled or payment duly and irrevocably
provided for, except for the series set forth herein:

    

    

    
      	
              Principal Amount of Bonds

            	
              Series

            
	
              Three
      Hundred Million Dollars

              ($300,000,000)

            	
              First
      Mortgage Bonds,

              Pledged
      Series A due December 1, 2027

            
	
              Two
      Hundred Million Dollars

              ($200,000,000)

            	
              First
      Mortgage Bonds,

              Pledged
      Series A due June 15, 2018

            
	
              One
      Hundred Million Dollars

              ($100,000,000)

            	
              First
      Mortgage Bonds,

              Pledged
      Series B due March 9, 2029

            
	
              One
      Hundred Fifty Million Dollars

              ($150,000,000)

            	
              First
      Mortgage Bonds,

              Pledged
      Series B due March 9, 2009

            
	
              Two
      Hundred Twenty-Five Million Dollars

              ($225,000,000)

            	
              First
      Mortgage Bonds,

              Pledged
      Series B due February 22, 2010

            
	
              Twenty-Five
      Million Dollars

              ($25,000,000)

            	
              First
      Mortgage Bonds,

              Pledged
      Series B due September 8, 2008

            
	
              Two
      Hundred Sixty Million Dollars

              ($260,000,000)

            	
              First
      Mortgage Bonds, Pledged Series C, due February 1, 2011

            
	
              One
      Hundred Thirty-Eight Million Four Hundred Sixty Thousand
      Dollars

              ($138,460,000)

            	
              5%
      First Mortgage Bonds, Pledged Series C due March 1,
2031

            
	
              Twenty-Three
      Million Four Hundred Thousand Dollars

              ($23,400,000)

            	
              5.10%
      First Mortgage Bonds, Pledged Series C due March 1,
2031

            
	
              One
      Hundred Fifty Million Dollars

              ($150,000,000)

            	
              3.363%
      Pledged First Mortgage Bonds due June 1, 2008

            
	
              Two
      Hundred Fifty Million Dollars

              ($250,000,000)

            	
              5.483%
      Pledged First Mortgage

              Bonds
      due June 1, 2035

            
	
              One
      Hundred Fifty Million Dollars

              ($150,000,000)

            	
              5.197%
      Pledged First Mortgage

              Bonds
      due October 1, 2015

            
	
              Three
      Hundred Million Dollars ($300,000,000)

            	
              6.274%
      Pledged First Mortgage Bonds due March 15,
2037

            

    

     

    

     

    which
Bonds are now outstanding and constitute the only Bonds of the Company
outstanding under the Indenture; and

     

    WHEREAS,
effective as of the opening of business on January 4, 1971, The First National
Bank of Boston succeeded Old Colony Trust Company as Trustee under the Indenture
by reason of the merger of Old Colony Trust Company into The First National Bank
of Boston; and

     

    WHEREAS,
effective as of October 2, 1995, State Street Bank and Trust Company
succeeded The First National Bank of Boston as Trustee under the Indenture;
and

     

    WHEREAS,
effective as of February 15, 2003, U.S. Bank National Association succeeded
State Street Bank and Trust Company as Trustee under the Indenture;
and

     

    WHEREAS,
the Company has entered into an Indenture (the “Debenture Indenture”) dated as
of December 1, 1997 with U.S. Bank National Association (as successor to
State Street Bank and Trust Company) as trustee (in such capacity, the
“Debenture Indenture Trustee”) pursuant to which the Company proposes to issue
from time to time its Senior Notes (the “Senior Notes”) and the Company has
agreed to make certain payments to the Debenture Indenture Trustee in respect of
the principal of, premium, if any, and interest on such Senior Notes;
and

     

    WHEREAS,
the Company desires to execute and deliver this Eighty-Fifth Supplemental
Indenture, in accordance with the provisions of the Indenture, for the purpose
of confirming the lien of the Indenture on certain property acquired or
constructed by the Company since the execution and delivery of the Original
Mortgage and on certain betterments, improvements and additions made by the
Company to property previously described in the Indenture.

     

    NOW,
THEREFORE, WITNESSETH, that, pursuant to and in execution of the powers,
authorities and obligations conferred, imposed and reserved in the Indenture,
and pursuant to and in execution of every other power, authority and obligation
thereto appertaining and/or enabling, in order to secure the payment of the
principal of, and the premium, if any, and interest on, the Bonds issued and to
be issued under the Indenture, and secured thereby and hereby at any time
outstanding according to their tenor and effect, and the performance of all the
covenants and conditions therein and herein and in said Bonds contained, and for
the purpose of confirming the lien of the Indenture, said Puget Sound Energy,
Inc., organized and existing under the laws of the State of Washington, in
consideration of the premises and of One Dollar ($1.00) and other good and
valuable consideration to it duly paid by the Trustee, at or before the
execution and delivery of these presents, the receipt whereof is hereby
acknowledged, has granted, bargained, sold, conveyed, transferred, assigned,
remised, released, mortgaged, set over and confirmed and by these presents does
grant, bargain, sell, convey, transfer, assign, remise, release, mortgage, set
over and confirm unto U.S. Bank National Association, as Trustee, and to its
successor or successors in the trust created by the Indenture, and to said
Trustee and its assigns forever, for the uses and purposes created by the
Indenture, all property, real, personal or mixed, including all rights,
privileges, easements, licenses and franchises, described in the Indenture and
thereby conveyed and mortgaged or intended so to be, including also all such
property acquired by the Company since the execution and delivery of the
Original Mortgage, which by the terms of the Indenture is subjected or intended
to be subjected to the lien thereof, and including also all such property as the
Company may hereafter acquire which by the terms of the Indenture is subjected
or intended to be subjected to the lien thereof, excepting from the foregoing,
however, all property included within the foregoing general description, whether
now owned or hereafter acquired, which by the provisions of the Indenture is
excepted or to be excepted from the conveyance and lien of the Indenture, or
which has heretofore been released from the lien of the Indenture or otherwise
disposed of by the Company free from the lien of the Indenture in accordance
with the provisions thereof:

     

    INCLUDING
NEVERTHELESS in the property hereby conveyed and confirmed to the Trustee
(without limiting the generality of the foregoing general description of such
property and without prejudice to the conveyance and confirmance of all such
property by such general description) the following:

     

    All
property, real, personal or mixed, together with all buildings or improvements
thereon and the appurtenances thereto, located in the State of Washington and
described below or conveyed to the Company by the deeds listed on the list of
properties and deeds below, to which deeds and the records thereof in the County
Auditor’s office of the respective counties in the State of Washington below
stated (in all cases where said deeds and/or records are below specified)
reference is hereby made for a more particular description of the property
hereby conveyed and confirmed to the Trustee and its respective successor or
successors and assigns as aforesaid, to wit:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    List
of Real Estate in the State of Washington Acquired by

    Puget
Sound Energy, Inc. to Date, and Not Heretofore Specifically

    Described
in Any Prior Supplemental Indenture**

    Puget
Sound Energy, Inc.

     

    

      
        	
                IN KING COUNTY,
      WASHINGTON:

              
	
                Section:

              	
                30

              
	
                Township:

              	
                24
      North

              
	
                Range:

              	
                8
      East, W.M.

              
	
                Description:

              	
                That
      portion of the north half of Section 30, Township 24 North, Range 8 East,
      W.M, King County, Washington, within a 60 foot strip, lying 30 feet
      on each
      side of the following described centerline;

                 

                Commencing
      at the southwest corner of said Section 30;

                 

                THENCE
      N 01°19'03" E, 2,646.39 feet to the west quarter corner of said
      section;

                 

                THENCE
      N 74°59'21" E, 3082.44 feet more or less to the intersection of the
      centerline of S.E. 69th Street, (also known as County Road No. 947) per
      Quit Claim Deed, dated April 15, 1912, recorded in Volume 814, Page
      605, of Quit Claim Deeds, Recording No. 819404, Records of King County,
      Washington, with the westerly right-of-way margin of State Route 202, AND
      the TRUE POINT OF BEGINNING;

                 

                THENCE
      along said centerline of S.E. 69th Street the following
      courses:

              
	 
      	
                Northerly
      34.93 feet along the arc of a non-tangent curve to the left, having a
      radius of 573.14 feet, the radius point of which bears S 45°55'16" W,
      through a central angle of 3°29'30" to a point of
      tangency;

                 

                N
      47°34'14" W, 561.97 feet to a point of curvature;

                 

                Northerly
      47.81 feet along the arc of a tangent curve to the right, having a radius
      of 35.81 feet through a central angle of 76°30'00" to a point of
      tangency;

                 

                N
      28°55'46" E, 31.53 feet more or less to the southerly line of ordinary
      high water of the Snoqualmie River AND the terminus of this centerline
      description.

              
	
                  

              	
                The
      sidelines of said 60 foot wide strip shall be extended or shortened to
      terminate at said westerly margin of State Route 202 and said southerly
      line of ordinary high water of Snoqualmie
      River.

              
	
                Deed
      From:

              	
                Puget
      Western, Inc.

              
	
                Deed
      Records

                Auditors
      File No.:

              	
                20060126000722

              
	
                Assessor's
      Tax

                Parcel
      ID#:

              	
                30-24-08-1111

              

      

       

      

      
        	
                IN KING COUNTY,
      WASHINGTON:

              
	
                Section:

              	
                16

              
	
                Township:

              	
                26
      North

              
	
                Range:

              	
                5
      East, W.M.

              
	
                Description:

              	
                Tract
      A, Kingsgate Vista, according to the plat thereof recorded in Volume 107
      of Plats, pages 52 and 53, in King County, Washington.

                 

                SUBJECT
      TO:  Easements, restrictions, reservations, covenants and
      agreements.

              
	
                Deed
      From:

              	
                Mac
      Land, Inc

              
	
                Deed
      Records

                Auditors
      File No.:

              	
                20061017000451

              
	
                Assessor's
      Tax

                Parcel
      ID#:

              	
                387648-0360-03

              

      

       

      

      
        	
                IN KITTITAS COUNTY,
      WASHINGTON:

              
	
                Section:

              	
                20,21,22,27,28,29
      and 33

              
	
                Township:

              	
                18
      North

              
	
                Range:

              	
                21
      East, W.M.

              
	
                Description:

                 

                 

              	
                All
      of Sections 33, 29, 28, 27, 20, 21, and 22.

                 

                The
      south half of Section 15.

                 

                The
      south half of Section 17.

                 

                All
      in Township 18 North, Range 21 East, W. M., in the County of Kittitas,
      State of Washington.

                 

                All
      of Fractional Section 4.

                 

                All
      that portion of Section 9, lying North of the North right of way line of
      State Highway No. 7

                 

                The
      Northeast quarter of Section 3, and the Northeast quarter of the Northwest
      quarter of Section 3.

                 

                All
      in Township 17 North, Range 21 East, W.M., Kittitas County, State of
      Washington.

                 

                RESERVING
      unto the Grantors from the above described land, all oil, gas, petroleum,
      asphaltum and other hydrocarbon substances and other minerals and mineral
      rights of every kind and character whether similar to those herein
      specified or not, within or underlying, or which may be produced from the
      above described land which lies below the present surface of said land, it
      being expressly understood and agreed that said Grantors, their respective
      heirs, successors and assigns, shall have a limited right to enter upon
      the surface of said land, or to use said land for the purposes as stated
      in that certain Limited Waiver of Rights of even date herewith between
      Grantors and Grantee and recorded concurrently
herewith.

              
	
                Deed
      From:

              	
                American
      Minerals and Land Corporation and Land Development and Promotion Services,
      Inc.

              
	
                Deed
      Records

                Auditors
      File No.:

              	
                200509300085

              
	
                Assessor's
      Tax

                Parcel
      ID#:

              	
                18-21-33000-0001,
      18-21-29000-0001, 18-21-29000-0002, 18-21-28000-0001, 18-21-27000-0001,
      18-21-20000-0001, 18-21-21000-0001, 18-21-22000-0001, 18-21-20000-0001
      (New P395234), 18-21-22000-0001 (New  P415234),
      17-21-04000-0001, 17-21-04000-0005, 17-21-04000-0007, 17-21-04000-0009,
      17-21-09000-0001, 17-21-09000-0006, 17-21-09000-0008, 17-21-09000-0010,
      17-21-03000-0002

              

      

       

      

      
        	
                IN KITTITAS COUNTY,
      WASHINGTON:

              
	
                Section:

              	
                14
      and 23

              
	
                Township:

              	
                17
      North

              
	
                Range:

              	
                20
      East, W.M.

              
	
                Description:                                

              	
                That
      portion of the Southeast quarter of the Southwest quarter of Section 14
      and the Northeast quarter of the Northwest quarter of Section 23,
      Township 17 North, Range 20 East, W.M., Kittitas County, State
      of Washington, which is bounded by a line described as
      follows:

                 

                Commencing
      at the Southeast corner of said Southeast quarter of the Southwest quarter
      of said Section 14 reference bearing South 89°32'00" East along the
      South boundary line of said Southwest quarter; thence South 81°11'46" West
      430.49 feet to the true point of beginning of said line and to the
      beginning of a curve concave to the Southwest having a radius of 1965.00
      feet and a radius bearing South 31°07'06" West; thence Northwest, along
      said curve 344.39 feet, more or less, through a central angle of 10°02'30"
      to the East right-of-way boundary line of Stevens Road; thence North
      19°21'37" East, along said East right-of-way boundary line of Stevens
      Road, 20.12 feet to the beginning of a curve to the right; thence
      Northeast, along said curve to the right, 229.99 feet, through a central
      angle of 12°18'56"; thence South 75°41'05" East 275.20 feet; thence South
      11°34'11" West 315.81 feet, more or less, to the true point of beginning
      and terminus of said line.

              
	
                Deed
      From:

              	
                Charles
      W. Hopper and Betty J. Hopper, husband and wife

              
	
                Deed
      Records

                Auditors
      File No.:

              	
                200508300069

              
	
                Assessor's
      Tax

                Parcel
      ID#:

              	
                17-20-14030-0007

              

      

    

     

    
 

    
      
        	
                EXCEPTIONS

              
	
                1.

              	
                Real
      property taxes not yet-due and payable.

              
	
                2.

              	
                LIABILITY,
      TO ASSESSMENTS levied by Kittitas Reclamation District.

              
	
                3.

              	
                FUTURE
      LIABILITY, TO ASSESSMENTS levied by Kittitas Reclamation
      District.

              
	
                4.

              	
                MEMORANDUM
      OF OPTION AGREEMENT AND THE TERMS AND CONDITIONS
  THEREOF:

              
	
                Between:

              	
                Charles
      and Betty Hopper

              
	
                And:

              	
                Zilkha
      Renewable Energy, LLC,

              
	
                Recorded:

              	
                December
      30, 2003

              
	
                Recording
      Number:

              	
                200312300003

              

      

       

      

      
        	
                5.

              	
                MEMORANDUM
      OF OPTION AGREEMENT AND THE TERMS AND CONDITIONS
  THEREOF:

              
	
                Between:

              	
                Charles
      W. Hopper and Betty J. Hopper, husband and wife

              
	
                And:

              	
                Wind
      Ridge Power Partners, LLC

              
	
                Recorded:

              	
                October
      29, 2004

              
	
                Recording
      Number:

              	
                200410290019

              

      

      

      

      
        	
                6.

              	
                ASSIGNMENT
      AND CONTRIBUTIONS AGREEMENT AND THE TERMS AND CONDITIONS
      THEREOF:

              
	
                Between:

              	
                Zilkha
      Renewable Energy, LLC

              
	
                And:

              	
                Wind
      Ridge Project Partners, LLC

              
	
                Recorded:

              	
                May
      13, 2005

              
	
                Recording
      Number:

              	
                200505130001

              

      

      

      

      
        	
                7.

              	
                LEASE
      OPTION AGREEMENT AND THE TERMS AND CONDITIONS THEREOF:

              
	
                Between:

              	
                Howard
      F. Clerf and Vivian Clerf, husband and wife, and Helen Jeanne Clerf, a
      single woman

              
	
                And:

              	
                W.E.
      Mays and Associates

              
	
                Recorded:

              	
                August
      15, 1988

              
	
                Recording
      Number:

              	
                514640

              
	
                Lease
      Option Amendment(s) and/or modification(s):

              
	
                Recorded:

              	
                October
      5, 1988

              
	
                Recording
      number(s):

              	
                516019

              
	
                LEASE
      OPTION ASSIGNMENT OF BENEFICIAL INTEREST:

              
	
                Assignee:

              	
                Meridian
      Oil Company

              
	
                Dated:

              	
                August
      15, 1988

              
	
                Recorded:

              	
                January
      4, 1999

              
	
                Recording
      No.:

              	
                517885

              

      

      

      
        	
                8.

              	
                RESERVATIONS
      AND EXCEPTIONS, including the terms and conditions
  thereof:

              
	
                Reserving:

              	
                Minerals

              
	
                Reserved
      by:

              	
                Helen
      Jean Clerf

              
	
                Recorded:

              	
                May
      2, 1975

              
	
                Recording
      No.:

              	
                386622

              

      

      

      
        	
                9.

              	
                RESERVATIONS
      AND EXCEPTIONS, including terms and conditions thereof:

              
	
                Reserving:

              	
                Minerals

              
	
                Reserved
      by:

              	
                Howard
      F. Clerf and Vivian Clerf

              
	
                Recorded:

              	
                September
      14, 1982

              
	
                Recording
      No.:

              	
                464380

              

      

      

      
        	
                10.

              	
                RESERVATIONS
      AND EXCEPTIONS, including terms and conditions thereof:

              
	
                Reserving:

              	
                Minerals

              
	
                Reserved
      by:

              	
                Howard
      F. Clerf and Vivian Clerf

              
	
                Recorded:

              	
                February
      14, 1984

              
	
                Recording
      No.:

              	
                477243

              

      

       

      

      
        	
                11.

              	
                A
      RECORD OF SURVEY and any and all matters relating thereto and disclosed
      thereby:

              
	
                Recorded:

              	
                January
      7, 2005

              
	
                Recording
      No.:

              	
                200501070009

              
	
                Book:

              	
                30

              
	
                Page.:

              	
                219

              

      

       

      

      
        	
                12.

              	
                TERMS
      AND CONDITIONS OF AMENDATORY CONTRACT:

              
	
                Between:

              	
                United
      States of America

              
	
                And:

              	
                Kittitas
      Reclamation District

              
	
                Dated:

              	
                January
      20, 1949

              
	
                Recording
      no.:

              	
                208267

              

      

       

      

      
        	
                13.

              	
                PENDENCY
      OF YAKIMA COUNTY SUPERIOR COURT CAUSE NUMBER

              
	
                77-2-01484-5,
      State of Washington Department of Ecology, plaintiff v. James J.
      Acquavella, et al, defendants; notice of which is given by Lis Pendens
      recorded on October 14, 1977 under Auditor's file number 417302 and
      by supplemental notice of Lis Pendens recorded on June 4, 1980 under
      Auditor's file number 442263; being an action for the determination of the
      rights to divert, withdraw, or otherwise make use of the surface waters of
      the Yakima River Drainage Basin, in accordance with the provisions of
      Chapters 90.03 and 90.44, Revised Code of
  Washington.

              

      

     

    
      
        	
                IN SKAGIT COUNTY,
      WASHINGTON:

              
	
                Section:

              	
                11

              
	
                Township:

              	
                35
      North

              
	
                Range:

              	
                8
      East,W.M.

              
	
                Description:

                 

              	
                The
      West 1⁄2 of the Northeast 1⁄4 of the Northwest 1⁄4 of Section 11,
      Township 35 North, Range 8 East, W.M. (Also known as
      Parcel "A" of that Survey recorded April 2, 1991, in
      Volume 11 of Surveys, page 14, Auditor's File
      No. 9104020044, records of Skagit County,
      Washington.)  EXCEPT those portions thereof conveyed to Skagit
      County for road purposes by deeds recorded as Auditor's File Nos. 185508
      (137D222) and 193867 (139D448) AND ALSO EXCEPT the existing as-built
      county road rights-of-way, if any, commonly known as the Baker Lake and
      Lake Shannon Roads.

                 

                SUBJECT
      TO:  Easements, restrictions, reservations, covenants and
      agreements.

              
	
                Deed
      From:

              	
                Amber
      Enterprises, Inc.

              
	
                Deed
      Records

                Auditors
      File No.:

              	
                200611090124

              
	
                Assessor's
      Tax

                Parcel
      ID#:

              	
                P43777

              

      

    

     

    

      

    

      
      ** All
numbers in the row following the designation "Township," indicate townships
north of the Willamette Base Line, and the Letters "E" and "W" in the row
following the designation "Range," indicate east or west, as the case may be, of
the Willamette Meridian.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
ONE

     

                
MISCELLANEOUS

     

    
      	
               
      

            	
              SECTION
      1.01

            

    

     

    This
Eighty-Fifth Supplemental Indenture is executed and shall be construed as an
indenture supplemental to the Indenture, and shall form a part thereof, and the
Indenture, as hereby supplemented and modified, is hereby
confirmed.  Except to the extent inconsistent with the express terms
hereof, all the provisions, terms, covenants, and conditions of the Indenture
shall be applicable to the Bonds of the New Series to the same extent as if
specifically set forth herein.

     

    
      	
               
      

            	
              SECTION
      1.02

            

    

     

    The Trustee has accepted the amendment of the Indenture effected by
this Eighty-Fifth Supplemental Indenture and agrees to execute the trust created
by the Indenture as hereby amended, but only upon the terms and conditions set
forth in the Indenture, including the terms and provisions defining and limiting
the liabilities and responsibilities of the Trustee, and without limiting the
generality of the foregoing, the Trustee shall not be responsible in any manner
whatsoever for or with respect of any of the recitals or statements contained
herein, all of which recitals or statements are made solely by the Company, or
for or with respect to (a) the validity or sufficiency of this Eighty-Fifth
Supplemental Indenture or any of the terms or provisions hereof, (b) the
proper authorization hereof by the Company by corporate action or otherwise, and
(c) the due execution hereof by the Company.

     

    
      	
               
      

            	
              SECTION
      1.03

            

    

     

    The
Company covenants that it is lawfully seized and possessed of all the trust
estate at the date of the execution of the Eighty-Fifth Supplemental Indenture
except as in the Indenture otherwise stated or permitted; that on said date the
trust estate is free and clear from all liens and encumbrances other than
permitted encumbrances, except as in the Indenture otherwise stated or
permitted; that the Company will warrant and forever defend the trust estate and
the title thereto to the Trustee against the claims of all persons whomsoever
except as in the Indenture otherwise stated or permitted; that it will maintain
and preserve the lien of the Indenture, as a first mortgage lien, except as in
the Indenture otherwise stated or permitted so long as any of the Bonds issued
under the Indenture are outstanding; and that it has good right and lawful
authority to subject said property to the lien of the Indenture, as provided in
and by the Indenture.

     

    
      	
               
      

            	
              SECTION
      1.04

            

    

     

    This
Eighty-Fifth Supplemental Indenture may be executed in several counterparts, and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts, or as many of them as the Company and the Trustee
shall preserve undestroyed, shall together constitute but one and the same
instrument.

     

    
      	
               
      

            	
              SECTION
      1.05

            

    

     

    Although
this Eighty-Fifth Supplemental Indenture is dated for convenience and for the
purpose of reference as of April 27, 2007, the actual date or dates of
execution by the Company and by the Trustee are as indicated by their respective
acknowledgments hereto annexed.

     

    

     

    [The
remainder of this page intentionally left blank]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, Puget Sound Energy, Inc. has caused this Eighty-Fifth
Supplemental Indenture to be signed in its corporate name and behalf by its
President or one of its Vice Presidents and the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary, all on April _26__, 2007, but as of
the day and year first above written.

     

    PUGET
SOUND ENERGY, INC.

     

    

     

    

     

    

     

    

     

    By       /s/ Donald E.
Gaines                                                                

    Donald E. Gaines

    Vice President Finance and
Treasurer

     

    

     

    Attest:

    

     

        /s/ James D.
Sant                                                      

    James D. Sant

    Assistant Treasurer

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    

    

      
        	
                STATE
      OF WASHINGTON

              	
                )

              
	 
      	
                )  ss:

              
	
                COUNTY
      OF KING

              	
                )

              

      

       

    

    On this
__26__ day of
_April_________, 2007,
before me, a Notary Public in and for the State of Washington, duly commissioned
and sworn, personally appeared Donald E. Gaines, to me known to be the Vice
President Finance and Treasurer of Puget Sound Energy, Inc., a Washington
corporation, the corporation named in and which executed the foregoing
instrument; and he acknowledged to me that he signed the same as the free and
voluntary act and deed of said corporation for the uses and purposes therein
mentioned, being authorized so to do.

     

    WITNESS
my hand and official seal the day and year in this certificate above
written.

     

    __/s/ Corinne
Scowcroft_________________

    Notary Name:  Corinne
Scowcroft

    Notary Public in and for the State
of

    Washington__,
residing at _Sammamish______.

    My commission expires _12/30/2010_.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    
      
        	
                STATE
      OF WASHINGTON

              	
                )

              
	 
      	
                )  ss:

              
	
                COUNTY
      OF KING

              	
                )

              

      

       

    

    On this
__26__ day of
_April_________, 2007,
before me, a Notary Public in and for the State of Washington, duly commissioned
and sworn, personally appeared James D. Sant, to me known to be the Assistant
Treasurer of Puget Sound Energy, Inc., a Washington corporation, the corporation
named in and which executed the foregoing instrument; and he acknowledged to me
that he signed the same as the free and voluntary act and deed of said
corporation for the uses and purposes therein mentioned, being authorized so to
do.

     

    WITNESS
my hand and official seal the day and year in this certificate above
written.

     

    __/s/ Corinne
Scowcroft_________________

    Notary Name:  Corinne
Scowcroft

    Notary Public in and for the State
of

    Washington__,
residing at _Sammamish______.

    My commission expires _12/30/2010_.

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