Document:

Filed by Automated Filing Services Inc. (604)609-0244 - Silverado Gold Mines Ltd. - Exhibit 10.19

SILVERADO GOLD MINES LTD. 
2006 STOCK OPTION PLAN

ARTICLE 1. THE PLAN

1.1 Title 

This plan is entitled the “2006 Stock Option Plan” (the "Plan")
of Silverado Gold Mines Ltd., a British Columbia corporation (the
"Company”).

1.2 Purpose

The purpose of the Plan is to enhance the long-term stockholder
value of the Company by offering opportunities to directors, officers, employees
and eligible consultants of the Company and any Related Company, as defined
below, to acquire and maintain stock ownership in the Company in order to give
these persons the opportunity to participate in the Company's growth and
success, and to encourage them to remain in the service of the Company or a
Related Company. 

ARTICLE 2. DEFINITIONS 

The following terms will have the following meanings in the
Plan: 

"Board" means the Board of Directors of the Company.

"Cause," unless otherwise defined in the
instrument evidencing the award or in an employment or services agreement
between the Company or a Related Company and a Participant, means a material
breach of the employment or services agreement, dishonesty, fraud, misconduct,
unauthorized use or disclosure of confidential information or trade secrets, or
conviction or confession of a crime punishable by law (except minor violations),
in each case as determined by the Plan Administrator, and its determination
shall be conclusive and binding. 

"Code" means the Internal Revenue Code of 1986, as
amended from time to time. 

"Common Shares" means the common shares, no par value,
of the Company. 

"Consultant Participant" means a Participant who is
defined as a Consultant Participant in Article 5. 

"Corporate Transaction," unless otherwise defined in the
instrument evidencing the Option or in a written employment or services
agreement between the Company or a Related Company and a Participant, means
consummation of either. 

	(a) 	
      a merger or consolidation of the Company with or into any
      other corporation, entity or person or

	 	 
	(b) 	
      a sale, lease, exchange or other transfer in one
      transaction or a series of related transactions of all or substantially
      all the Company's outstanding securities or all or substantially all the
      Company's assets; provided, however, that a Corporate Transaction shall
      not include a Related Party Transaction.

"Disability," unless otherwise defined by the
Plan Administrator, means a mental or physical impairment of the Participant
that is expected to result in death or that has lasted or is expected to last
for a continuous period of 12 months or more and that causes the Participant to
be unable, in the opinion of the Company, to perform his or her duties for the
Company or a Related Company and to be engaged in any substantial gainful
activity. 

"Employment Termination Date" means, with respect to a
Participant, the first day upon which the Participant no longer has an
employment or service relationship with the Company or any Related Company. 

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"Exchange Act" means the Securities Exchange Act of
1934, as amended. 

"Fair Market Value" means the per share value of the
Common Shares determined as follows (a) if the Common Shares are listed on an
established stock exchange or exchanges or the NASDAQ National Market, the
closing price per share on the last trading day immediately preceding such date
on the principal exchange on which it is traded or as reported by NASDAQ; (b) if
the Common Shares are not then listed on an exchange or the NASDAQ National
Market, but is quoted on the NASDAQ Small Cap Market, the NASDAQ electronic
bulletin board or the National Quotation Bureau pink sheets, the average of the
closing bid and asked prices per share for the Common Shares as quoted by NASDAQ
or the National Quotation Bureau, as the case may be, on the last trading day
immediately preceding such date; or (c) if there is no such reported market for
the Common Shares for the date in question, then an amount determined in good
faith by the Plan Administrator.

"Grant Date" means the date on which the Plan
Administrator completes the corporate action relating to the grant of an Option
or such later date specified by the Plan Administrator, and on which all
conditions precedent to the grant have been satisfied, provided that conditions
to the exercisability or vesting of Options shall not defer the Grant Date. 

"Incentive Stock Option" means an Option granted with
the intention, as reflected in the instrument evidencing the Option, that it
qualify as an "incentive stock option" as that term is defined in Section 422 of
the Code. 

"Nonqualified Stock Option" means an Option other than
an Incentive Stock Option. "Option" means the right to purchase Common
Shares granted under Article 7. "Option Expiration Date" has the meaning
set forth in Article 7.6. 

"Option Term" has the meaning set forth in Article 7.3.

"Participant" means the person to whom an Option is
granted and who meets the eligibility requirements imposed by Article 5,
including Consultant Participants, as defined in Article 5. 

"Plan Administrator" has the meaning set forth in
Article 3.1. 

"Related Company" means any entity that, directly or
indirectly, is in control of or is controlled by the Company. 

"Related Party Transaction" means (a) a merger or
consolidation of the Company in which the holders of Common Shares immediately
prior to the merger hold at least a majority of the Common Shares in the
Successor Corporation immediately after the merger; (b) a sale, lease, exchange
or other transaction in one transaction or a series of related transactions of
all or substantially all the Company's assets to a wholly-owned subsidiary
corporation; (c) a mere reincorporation of the Company; or (d) a transaction
undertaken for the sole purpose of creating a holding company that will be owned
in substantially the same proportion by the persons who held the Company's
securities immediately before such transaction. 

"Retirement," unless otherwise defined by the
Plan Administrator from time to time for purposes of the Plan, means retirement
on or after the individual's normal retirement date under the Company's 401(k)
plan or other similar successor plan applicable to salaried employees. 

"Securities Act" means the Securities Act of 1933, as
amended. 

"Successor Corporation" has the meaning set forth in
Article 11.3.1. 

"Vesting Commencement Date" means the Grant Date or such
other date selected by the Plan Administrator as the date from which the Option
begins to vest for purposes of Article 7.4. 

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ARTICLE 3. ADMINISTRATION 

3.1 Plan Administrator 

The Plan shall be administered by the Board or a committee
appointed by, and consisting of two or more members of, the Board (the "Plan
Administrator"). If and so long as the Common Shares are registered under
Section 12(b) or 12(g) of the Exchange Act, the Board shall consider in
selecting the members of any committee acting as Plan Administrator, with
respect to any persons subject or likely to become subject to Section 16 of the
Exchange Act, the provisions regarding (a) "outside directors" as contemplated
by Section 162(m) of the Code and (b) "nonemployee directors" as contemplated by
Rule 16b-3 under the Exchange Act. Committee members shall serve for such term
as the Board may determine, subject to removal by the Board at any time. At any
time when no committee has been appointed to administer the Plan, then the Board
will be the Plan Administrator.

3.2 Administration and Interpretation by Plan Administrator

Except for the terms and conditions explicitly set forth in the
Plan, the Plan Administrator shall have exclusive authority, in its discretion,
to determine all matters relating to Options under the Plan, including the
selection of individuals to be granted Options, the type of Options, the number
of Common Shares subject to an Option, all terms, conditions, restrictions and
limitations, if any, of an Option and the terms of any instrument that evidences
the Option. The Plan Administrator shall also have exclusive authority to
interpret the Plan and the terms of any instrument evidencing the Option and may
from time to time adopt and change rules and regulations of general application
for the Plan's administration. The Plan Administrator's interpretation of the
Plan and its rules and regulations, and all actions taken and determinations
made by the Plan Administrator pursuant to the Plan, shall be conclusive and
binding on all parties involved or affected. The Plan Administrator may delegate
administrative duties to such of the Company's officers as it so determines.

ARTICLE 4. STOCK SUBJECT TO THE PLAN 

4.1 Authorized Number of Shares 

Subject to adjustment from time to time as provided in Article
11.1, the number of shares of Common Shares available for issuance under the
Plan shall be 37,000,000 common shares, no par value.

4.2 Reuse of Shares 

Any Common Shares that have been made subject to an Option that
cease to be subject to the Option (other than by reason of exercise or
settlement of the Option to the extent it is exercised for or settled in shares)
shall again be available for issuance in connection with future grants of
Options under the Plan. In the event shares issued under the Plan are reacquired
by the Company pursuant to any forfeiture provision or right of repurchase, such
shares shall again be available for the purposes of the Plan; provided, however,
that the maximum number of shares that may be issued upon the exercise of
Incentive Stock Options shall equal the share number stated in Article 4.1,
subject to adjustment from time to time as provided in Article 11.1; and
provided, further, that for purposes of Article 4.3, any such shares shall be
counted in accordance with the requirements of Section 162(m) of the Code. 

4.3 Limitations 

Subject to adjustment from time to time as provided in Article
11.1, not more than an aggregate of 37,000,000 common shares shall be available
for issuance pursuant to grants of Stock Options under the Plan.

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ARTICLE 5. ELIGIBILITY 

An Option may be granted to any officer, director or employee
of the Company or a Related Company that the Plan Administrator from time to
time selects. An Option may also be granted to any consultant who provides
services to the Company or any Related Company or to any employee of such
consultant (a “Consultant Participant”), so long as such Consultant Participant
(a) is a natural person or an alter ego entity of the natural person providing
the services; (b) renders bona fide services to the Company that are not in
connection with the offer and sale of the Company's securities in a
capital-raising transaction; and (c) does not directly or indirectly promote or
maintain a market for the Company's securities. 

ARTICLE 6. OPTIONS 

6.1 Form and Grant of Options 

The Plan Administrator shall have the authority, in its sole
discretion, to determine the type or types of Options to be granted under the
Plan. Options may be granted singly or in combination. 

6.2 Settlement of Options 

The Company may settle Options through the delivery of Common
Shares, the granting of replacement Options or any combination thereof as the
Plan Administrator shall determine. Any Option settlement, including payment
deferrals, may be subject to such conditions, restrictions and contingencies as
the Plan Administrator shall determine. The Plan Administrator may permit or
require the deferral of any Option payment, subject to such rules and procedures
as it may establish, which may include provisions for the payment or crediting
of interest, or dividend equivalents, including converting such credits into
deferred stock equivalents. 

ARTICLE 7. GRANTS OF OPTIONS

7.1 Grant of Options 

The Plan Administrator shall have the authority, in its sole
discretion, to grant Options as Incentive Stock Options or as Nonqualified Stock
Options, which shall be appropriately designated. 

7.2 Option Exercise Price 

The exercise price for shares purchased under an Option shall
be as determined by the Plan Administrator, provided that:

(a) the exercise price for Options granted to Participants
other than Consultant Participants but shall not be less than the minimum
exercise price required by Article 8.3 with respect to Incentive Stock Options
and shall not be less than 85% of Fair Market Value of the Common Shares on the
Grant Date with respect to Nonqualified Stock Options;

(b) the exercise price for Options granted to Consultant
Participants shall not be less than the lesser of 85% of Fair Market Value of
the Common Shares on the Grant Date.

7.3 Term of Options 

Subject to earlier termination in accordance with the terms of
the Plan and the instrument evidencing the Option, the maximum term of an Option
(the "Option Term") shall be as established for that Option by the Plan
Administrator or, if not so established, shall be ten years from the Grant Date.

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7.4 Exercise of Options 

The Plan Administrator shall establish and set forth in each
instrument that evidences an Option the time at which, or the installments in
which, the Option shall vest and become exercisable, any of which provisions may
be waived or modified by the Plan Administrator at any time. 

The Plan Administrator, in its sole discretion, may adjust the
vesting schedule of an Option held by a Participant who works less than
"full-time" as that term is defined by the Plan Administrator or who takes a
Company-approved leave of absence. 

To the extent an Option has vested and become exercisable, the
Option may be exercised in whole or from time to time in part by delivery to the
Company of a written stock option exercise agreement or notice, in a form and in
accordance with procedures established by the Plan Administrator, setting forth
the number of shares with respect to which the Option is being exercised, the
restrictions imposed on the shares purchased under such exercise agreement, if
any, and such representations and agreements as may be required by the Plan
Administrator, accompanied by payment in full as described in Article 7.5. An
Option may be exercised only for whole shares and may not be exercised for less
than a reasonable number of shares at any one time, as determined by the Plan
Administrator. 

7.5 Payment of Exercise Price 

The exercise price for shares purchased under an Option shall
be paid in full to the Company by delivery of consideration equal to the product
of the Option exercise price and the number of shares purchased. Such
consideration must be in accordance with the requirements of the British
Columbia Business Corporations Act and the Articles of Incorporation and Bylaws
of the Company, must be paid before the Company will issue the shares being
purchased and must be in a form or a combination of forms acceptable to the Plan
Administrator for that purchase. 

7.6 Post-Termination Exercises 

The Plan Administrator shall establish and set forth in each
instrument that evidences an Option whether the Option shall continue to be
exercisable, and the terms and conditions of such exercise, if the Participant
ceases to be employed by, or to provide services to, the Company or a Related
Company, which provisions may be waived or modified by the Plan Administrator at
any time. If not so established in the instrument evidencing the Option, the
Option shall be exercisable according to the following terms and conditions,
which may be waived or modified by the Plan Administrator at any time: 

	(a) 	
      Except as otherwise set forth in this Article 7.6, any
      portion of an Option that is not vested and exercisable on the Employment
      Termination Date shall expire on such date.

	 	 	 
	(b) 	
      Any portion of an Option that is vested and exercisable
      on the Employment Termination Date shall expire on the earliest to occur
      of

	 	 	 
		(i) 	
      if the Participant's Employment Termination Date occurs
      for reasons other than Cause, Retirement, Disability or death, the day
      which is three months after such Employment Termination Date;

	 	 	 
		(ii) 	
      if the Participant's Employment Termination Date occurs
      by reason of Retirement, Disability or death, the one-year anniversary of
      such Employment Termination Date; and

	 	 	 
		(iii) 	
      the last day of the Option Term (the "Option Expiration
      Date").

	 	 	 
		
      Notwithstanding the foregoing, if the Participant dies
      after his or her Employment Termination Date but while an Option is
      otherwise exercisable, the portion of the Option that is vested and
      exercisable on such Employment Termination Date shall expire upon the
      earlier to occur of (y) the Option Expiration Date and (z) the one-year
      anniversary of the date of death, unless the Plan Administrator determines
      otherwise.

5

		
      Also notwithstanding the foregoing, in case of
      termination of the Participant's employment or service relationship for
      Cause, all Options granted to that Participant shall automatically expire
      upon first notification to the Participant of such termination, unless the
      Plan Administrator determines otherwise. If a Participant's employment or
      service relationship with the Company is suspended pending an
      investigation of whether the Participant shall be terminated for Cause,
      all the Participant's rights under any Option shall likewise be suspended
      during the period of investigation. If any facts that would constitute
      termination for Cause are discovered after the Participant's relationship
      with the Company or a Related Company has ended, any Option then held by
      the Participant may be immediately terminated by the Plan Administrator,
      in its sole discretion.

	 	 
	(c) 	
      A Participant's transfer of employment or service
      relationship between or among the Company and any Related Company, or a
      change in status from an employee to a consultant, agent, advisor or
      independent contractor or a change in status from a consultant, agent,
      advisor or independent contractor to an employee, shall not be considered
      a termination of employment or service relationship for purposes of this
      Article 7. Unless the Plan Administrator determines otherwise, a
      termination of employment or service relationship shall be deemed to occur
      if a Participant's employment or service relationship is with an entity
      that has ceased to be a Related Company.

	 	 
	(d) 	
      The effect of a Company-approved leave of absence on the
      application of this Article 7 shall be determined by the Plan
      Administrator, in its sole discretion.

	 	 
	(e) 	
      If a Participant's employment or service relationship
      with the Company or a Related Company terminates by reason of Disability
      or death, the Option shall become fully vested and exercisable for all the
      shares subject to the Option. Such Option shall remain exercisable for the
      time period set forth in this Article 7.6.

ARTICLE 8. INCENTIVE STOCK OPTION LIMITATIONS 

Notwithstanding any other provisions of the Plan, and to the
extent required by Section 422 of the Code, Incentive Stock Options shall be
subject to the following additional terms and conditions: 

8.1 Dollar Limitation 

To the extent the aggregate Fair Market Value (determined as of
the Grant Date) of Common Shares with respect to which Incentive Stock Options
are exercisable for the first time during any calendar year (under the Plan and
all other stock option plans of the Company) exceeds $100,000, such portion in
excess of $100,000 shall be treated as a Nonqualified Stock Option. In the event
the Participant holds two or more such Options that become exercisable for the
first time in the same calendar year, such limitation shall be applied on the
basis of the order in which such Options are granted. 

8.2 Eligible Employees 

Individuals who are not employees of the Company or one of its
parent corporations or subsidiary corporations may not be granted Incentive
Stock Options. 

8.3 Exercise Price 

The exercise price of an Incentive Stock Option shall be at
least 100% of the Fair Market Value of the Common Shares on the Grant Date, and
in the case of an Incentive Stock Option granted to a Participant who owns more
than 10% of the total combined voting power of all classes of the stock of the
Company or of its parent or subsidiary corporations (a "Ten Percent
Stockholder"), shall not be less than 110% of the Fair Market Value of the
Common Shares on the Grant Date. 

6

The determination of more than 10% ownership shall be made in
accordance with Section 422 of the Code. 

8.4 Exercisability 

An Option designated as an Incentive Stock Option shall cease
to qualify for favorable tax treatment as an Incentive Stock Option to the
extent it is exercised (if permitted by the terms of the Option) (a) more than
three months after the Employment Termination Date if termination was for
reasons other than death or disability, (b) more than one year after the
Employment Termination Date if termination was by reason of disability, or (c)
after the Participant has been on leave of absence for more than 90 days, unless
the Participant's reemployment rights are guaranteed by statute or contract.

8.5 Taxation of Incentive Stock Options 

In order to obtain certain tax benefits afforded to Incentive
Stock Options under Section 422 of the Code, the Participant must hold the
shares acquired upon the exercise of an Incentive Stock Option for two years
after the Grant Date and one year after the date of exercise. 

A Participant may be subject to the alternative minimum tax at
the time of exercise of an Incentive Stock Option. The Participant shall give
the Company prompt notice of any disposition of shares acquired on the exercise
of an Incentive Stock Option prior to the expiration of such holding periods.

8.6 Code Definitions 

For the purposes of this Article 8, "parent corporation,"
"subsidiary corporation" and "disability" shall have the meanings attributed to
those terms for purposes of Section 422 of the Code. 

ARTICLE 9. WITHHOLDING 

9.1 General 

The Company may require the Participant to pay to the Company
the amount of any taxes that the Company is required by applicable federal,
state, local or foreign law to withhold with respect to the grant, vesting or
exercise of an Option. The Company shall not be required to issue any shares
Common Shares under the Plan until such obligations are satisfied. 

9.2 Payment of Withholding Obligations in Cash or Shares

The Plan Administrator may permit or require a Participant to
satisfy all or part of his or her tax withholding obligations by (a) paying cash
to the Company, (b) having the Company withhold from any cash amounts otherwise
due or to become due from the Company to the Participant, (c) having the Company
withhold a portion of any Common Shares that would otherwise be issued to the
Participant having a value equal to the tax withholding obligations (up to the
employer's minimum required tax withholding rate), or (d) surrendering any
Common Shares that the Participant previously acquired having a value equal to
the tax withholding obligations (up to the employer's minimum required tax
withholding rate to the extent the Participant has held the surrendered shares
for less than six months). 

ARTICLE 10. ASSIGNABILITY 

Neither an Option nor any interest therein may be assigned,
pledged or transferred by the Participant or made subject to attachment or
similar proceedings other than by will or by the applicable laws of descent and
distribution, and, during the Participant's lifetime, such Options may be
exercised only by the Participant. Notwithstanding the foregoing, and to the
extent permitted by Section 422 of the Code, the Plan Administrator, in its sole
discretion, may permit a Participant to assign or transfer an Option or may
permit a Participant to designate a beneficiary who may exercise the Option or
receive payment under the Option after the Participant's death; 7

provided, however, that any Option so assigned or transferred
shall be subject to all the terms and conditions of the Plan and those contained
in the instrument evidencing the Option. 

ARTICLE 11. ADJUSTMENTS 

11.1 Adjustment of Shares 

In the event, at any time or from time to time, a stock
dividend, stock split, spin-off, combination or exchange of shares,
recapitalization, merger, consolidation, distribution to stockholders other than
a normal cash dividend, or other change in the Company's corporate or capital
structure, including, without limitation, a Related Party Transaction, results
in (a) the outstanding Common Shares, or any securities exchanged therefor or
received in their place, being exchanged for a different number or kind of
securities of the Company or of any other corporation or (b) new, different or
additional securities of the Company or of any other corporation being received
by the holders of Common Shares of the Company, then the Plan Administrator
shall make proportional adjustments in (i) the maximum number and kind of
securities subject to the Plan and issuable as Incentive Stock Options as set
forth in Article 4 and the maximum number and kind of securities that may be
made subject to Options and to Options to any individual as set forth in Article
4.3, and (ii) the number and kind of securities that are subject to any
outstanding Award and the per share price of such securities, without any change
in the aggregate price to be paid therefor. The determination by the Plan
Administrator as to the terms of any of the foregoing adjustments shall be
conclusive and binding. Notwithstanding the foregoing, a dissolution or
liquidation of the Company or a Corporate Transaction shall not be governed by
this Article 11.1 but shall be governed by Articles 11.2 and 11.3, respectively.

11.2 Dissolution or Liquidation 

To the extent not previously exercised or settled, and unless
otherwise determined by the Plan Administrator in its sole discretion, Options
shall terminate immediately prior to the dissolution or liquidation of the
Company. To the extent a forfeiture provision or repurchase right applicable to
an Option has not been waived by the Plan Administrator, the Option shall be
forfeited immediately prior to the consummation of the dissolution or
liquidation. 

11.3 Corporate Transaction 

Options 

	(a) 	
      In the event of a Corporate Transaction, except as
      otherwise provided in the instrument evidencing an Option (or in a written
      employment or services agreement between a Participant and the Company or
      Related Company) and except as provided in subsection (b) below, each
      outstanding Option shall be assumed or an equivalent option or right
      substituted by the surviving corporation, the successor corporation or its
      parent corporation, as applicable (the "Successor Corporation").

	 	 
	(b) 	
      If, in connection with a Corporate Transaction, the
      Successor Corporation refuses to assume or substitute for an Option, then
      each such outstanding Option shall become fully vested and exercisable
      with respect to 100% of the unvested portion of the Option. In such case,
      the Plan Administrator shall notify the Participant in writing or
      electronically that the unvested portion of the Option specified above
      shall be fully vested and exercisable for a specified time period. At the
      expiration of the time period, the Option shall terminate, provided that
      the Corporate Transaction has occurred.

	 	 
	(c) 	
      For the purposes of this Article 11.3, the Option shall
      be considered assumed or substituted for if following the Corporate
      Transaction the option or right confers the right to purchase or receive,
      for each share of Common Shares subject to the Option immediately prior to
      the Corporate Transaction, the consideration (whether stock, cash, or
      other securities or property) received in the Corporate Transaction by
      holders of Common Shares for each share held on the effective date of the
      transaction (and if holders were offered a choice of consideration, the
      type of consideration chosen by the

8

		
      holders of a majority of the outstanding shares);
      provided, however, that if such consideration received in the Corporate
      Transaction is not solely Common Shares of the Successor Corporation, the
      Plan Administrator may, with the consent of the Successor Corporation,
      provide for the consideration to be received upon the exercise of the
      Option, for each share of Common Shares subject thereto, to be solely
      Common Shares of the Successor Corporation substantially equal in fair
      market value to the per share consideration received by holders of Common
      Shares in the Corporate Transaction. The determination of such substantial
      equality of value of consideration shall be made by the Plan Administrator
      and its determination shall be conclusive and binding.

	 	 
	(d) 	
      All Options shall terminate and cease to remain
      outstanding immediately following the Corporate Transaction, except to the
      extent assumed by the Successor Corporation.

11.4 Further Adjustment of Options 

Subject to Articles 11.2 and 11.3, the Plan Administrator shall
have the discretion, exercisable at any time before a sale, merger,
consolidation, reorganization, liquidation or change of control of the Company,
as defined by the Plan Administrator, to take such further action as it
determines to be necessary or advisable, and fair and equitable to the
Participants, with respect to Options. Such authorized action may include (but
shall not be limited to) establishing, amending or waiving the type, terms,
conditions or duration of, or restrictions on, Options so as to provide for
earlier, later, extended or additional time for exercise, lifting restrictions
and other modifications, and the Plan Administrator may take such actions with
respect to all Participants, to certain categories of Participants or only to
individual Participants. The Plan Administrator may take such action before or
after granting Options to which the action relates and before or after any
public announcement with respect to such sale, merger, consolidation,
reorganization, liquidation or change of control that is the reason for such
action. 

11.5 Limitations 

The grant of Options shall in no way affect the Company's right
to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets. 

11.6 Fractional Shares 

In the event of any adjustment in the number of shares covered
by any Option, each such Option shall cover only the number of full shares
resulting from such adjustment. 

ARTICLE 12. AMENDMENT AND TERMINATION 

12.1 Amendment or Termination of Plan 

The Board may suspend, amend or terminate the Plan or any
portion of the Plan at any time and in such respects as it shall deem advisable;
provided, however, that to the extent required for compliance with Section 422
of the Code or any applicable law or regulation, stockholder approval shall be
required for any amendment that would (a) increase the total number of shares
available for issuance under the Plan, (b) modify the class of employees
eligible to receive Options, or (c) otherwise require stockholder approval under
any applicable law or regulation. Any amendment made to the Plan that would
constitute a "modification" to Incentive Stock Options outstanding on the date
of such amendment shall not, without the consent of the Participant, be
applicable to such outstanding Incentive Stock Options but shall have
prospective effect only. 

12.2 Term of Plan 

Unless sooner terminated as provided herein, the Plan shall
terminate ten years after the earlier of the Plan's adoption by the Board and
approval by the stockholders. 

12.3 Consent of Participant 

9

The suspension, amendment or termination of the Plan or a
portion thereof or the amendment of an outstanding Option shall not, without the
Participant's consent, materially adversely affect any rights under any Option
theretofore granted to the Participant under the Plan. Any change or adjustment
to an outstanding Incentive Stock Option shall not, without the consent of the
Participant, be made in a manner so as to constitute a "modification" that would
cause such Incentive Stock Option to fail to continue to qualify as an Incentive
Stock Option. Notwithstanding the foregoing, any adjustments made pursuant to
Article 12 shall not be subject to these restrictions. 

ARTICLE 13. GENERAL 

13.1 Evidence of Options 

Options granted under the Plan shall be evidenced by a written
instrument that shall contain such terms, conditions, limitations and
restrictions as the Plan Administrator shall deem advisable and that are not
inconsistent with the Plan. 

13.2 No Individual Rights 

Nothing in the Plan or any Option granted under the Plan shall
be deemed to constitute an employment contract or confer or be deemed to confer
on any Participant any right to continue in the employ of, or to continue any
other relationship with, the Company or any Related Company or limit in any way
the right of the Company or any Related Company to terminate a Participant's
employment or other relationship at any time, with or without Cause. 

13.3 Issuance of Shares 

Notwithstanding any other provision of the Plan, the Company
shall have no obligation to issue or deliver any Common Shares under the Plan or
make any other distribution of benefits under the Plan unless, in the opinion of
the Company's counsel, such issuance, delivery or distribution would comply with
all applicable laws (including, without limitation, the requirements of the
Securities Act), and the applicable requirements of any securities exchange or
similar entity. 

The Company shall be under no obligation to any Participant to
register for offering or resale or to qualify for exemption under the Securities
Act, or to register or qualify under state securities laws, any Common Shares,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws. 

To the extent the Plan or any instrument evidencing an Option
provides for issuance of stock certificates to reflect the issuance of Common
Shares, the issuance may be effected on a noncertificated basis, to the extent
not prohibited by applicable law or the applicable rules of any stock exchange.

13.4 No Rights as a Stockholder 

No Option or Stock Option denominated in units shall entitle
the Participant to any cash dividend, voting or other right of a stockholder
unless and until the date of issuance under the Plan of the shares that are the
subject of such Option. 

13.5 Compliance With Laws and Regulations 

Notwithstanding anything in the Plan to the contrary, the Plan
Administrator, in its sole discretion, may bifurcate the Plan so as to restrict,
limit or condition the use of any provision of the Plan to Participants who are
officers or directors subject to Section 16 of the Exchange Act without so
restricting, limiting or conditioning the Plan with respect to other
Participants. Additionally, in 

10

interpreting and applying the provisions of the Plan, any
Option granted as an Incentive Stock Option pursuant to the Plan shall, to the
extent permitted by law, be construed as an "incentive stock option" within the
meaning of Section 422 of the Code. 

13.6 Participants in Other Countries 

The Plan Administrator shall have the authority to adopt such
modifications, procedures and subplans as may be necessary or desirable to
comply with provisions of the laws of other countries in which the Company or
any Related Company may operate to assure the viability of the benefits from
Options granted to Participants employed in such countries and to meet the
objectives of the Plan. 

13.7 No Trust or Fund 

The Plan is intended to constitute an "unfunded" plan. Nothing
contained herein shall require the Company to segregate any monies or other
property, or Common Shares, or to create any trusts, or to make any special
deposits for any immediate or deferred amounts payable to any Participant, and
no Participant shall have any rights that are greater than those of a general
unsecured creditor of the Company. 

13.8 Severability 

If any provision of the Plan or any Option is determined to be
invalid, illegal or unenforceable in any jurisdiction, or as to any person, or
would disqualify the Plan or any Option under any law deemed applicable by the
Plan Administrator, such provision shall be construed or deemed amended to
conform to applicable laws, or, if it cannot be so construed or deemed amended
without, in the Plan Administrator's determination, materially altering the
intent of the Plan or the Option, such provision shall be stricken as to such
jurisdiction, person or Option, and the remainder of the Plan and any such
Option shall remain in full force and effect. 

13.9 Choice of Law 

The Plan and all determinations made and actions taken pursuant
heretoshall be governed by the laws of the Province of British Columbia without
giving effect to principles of conflicts of law. 

ARTICLE 14. EFFECTIVE DATE 

The effective date is January 4, 2006, being the date on which
the Plan was adopted by the Board. If the stockholders of the Company do not
approve the Plan within 12 months after the Board's adoption of the Plan, any
Incentive Stock Options granted under the Plan will be treated as Nonqualified
Stock Options. 

11Unassociated Document

    Exhibit
      4.22

    
      
        

      

     

    SECURITY
      AGREEMENT

     

    

     

    This
      is a Security Agreement covering personal property as well as other property
      real and/or personal

     

    

     

    PUGET
      SOUND ENERGY, INC.

     

    TO

     

    BNY
      MIDWEST TRUST COMPANY,

     

    TRUSTEE

     

    ____________________

     

    

     

    THIRTY-SECOND
      SUPPLEMENTAL INDENTURE

     

    

     

    Dated
      as of April 1, 2005

     

    

     

    SUPPLEMENTING

     

    INDENTURE
      OF FIRST MORTGAGE

     

    

     

    Dated
      as of April 1, 1957

     

    

     

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    THIS
      THIRTY-SECOND SUPPLEMENTAL INDENTURE, made as of the 1st day
      of April, 2005, by and between Puget Sound Energy, Inc., 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 BNY Midwest Trust Company, an Illinois trust company, with
      a
      principal corporate trust office at 2 North LaSalle Street, Suite 1020, Chicago,
      Illinois, 60602 (successor to Harris Trust and Savings Bank) (hereinafter
      sometimes called the "Trustee"), as Trustee under the Indenture of First
      Mortgage dated as of April 1, 1957 (hereinafter called the "Original Indenture"
      or, as heretofore supplemented and modified, hereinafter called the
      "Indenture"), as supplemented and modified by all indentures supplemental
      thereto heretofore executed and delivered, party of the second
      part;

     

    WITNESSETH:
      that

     

    WHEREAS,
      Washington Natural Gas Company, a corporation organized and existing under
      the
      laws of the State of Delaware (hereinafter called the "First Predecessor
      Company"), which was merged into Washington Natural Gas Company, a corporation
      organized and existing under the laws of the State of Washington (hereinafter
      called the "Second Predecessor Company") on August 9, 1978, had heretofore
      executed and delivered to the Trustee its Original Indenture, in order, among
      other things, to secure, as provided therein, the payment of the principal
      of
      and premium, if any, and interest on its bonds (in the Indenture and herein
      called the "Bonds") at any time issued and outstanding thereunder according
      to
      their tenor and effect, said Bonds to be designated generally as its "First
      Mortgage Bonds," and to be issued in one or more series as provided in the
      Original Indenture; and

     

    WHEREAS,
      the First Predecessor Company had heretofore executed and delivered sixteen
      indentures supplemental to the Original Indenture as follows: First Supplemental
      Indenture, dated as of April 1, 1957, naming and appointing, pursuant to the
      provisions of Section 15.18 of the Original Indenture, R.H. Long, an individual,
      to act as Co-Trustee jointly with the Trustee, Second Supplemental Indenture
      dated as of October 1, 1959, Third Supplemental Indenture dated as of May 1,
      1961, Fourth Supplemental Indenture dated as of May 1, 1963, Fifth Supplemental
      Indenture dated as of June 1, 1965, Sixth Supplemental Indenture dated as of
      August 1, 1966, Seventh Supplemental Indenture dated as of February 1, 1967,
      Eighth Supplemental Indenture dated as of September 1, 1967, Ninth Supplemental
      Indenture dated as of September 1, 1968, Tenth Supplemental Indenture dated
      as
      of June 1, 1970, Eleventh Supplemental Indenture dated as of April 1, 1971,
      Twelfth Supplemental Indenture dated as of November 1, 1972, Thirteenth
      Supplemental Indenture dated as of September 1, 1975, Fourteenth Supplemental
      Indenture dated as of September 15, 1975, Fifteenth Supplemental Indenture
      dated
      as of March 1, 1977 and Sixteenth Supplemental Indenture dated as of June 1,
      1977, naming and appointing, pursuant to the provisions of Section 15.18 of
      the
      Original Indenture, R.G. Mason, an individual, to act as successor Co-Trustee,
      pursuant to each of which supplemental indentures, except said First, Seventh,
      and Sixteenth Supplemental Indentures, the First Predecessor Company provided
      for the creation of an issue of First Mortgage Bonds, and said Sixth and Seventh
      Supplemental Indentures provided for certain modifications of the Original
      Indenture; and

     

    WHEREAS,
      the Second Predecessor Company has heretofore executed and delivered a
      Seventeenth Supplemental Indenture dated as of August 9, 1978, whereby the
      Second Predecessor Company succeeded to the First Predecessor Company with
      the
      same effect as if the Second Predecessor 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 First Predecessor Company merged into the Second
      Predecessor Company on August 9, 1978 whereupon the Second Predecessor Company
      acquired all the property, real, personal or mixed, including all rights,
      privileges, immunities and franchises, described in the Indenture and thereby
      conveyed and mortgaged or intended so to be, including also all such property
      acquired by the First Predecessor Company since the execution and delivery
      of
      the Original Indenture, which by the terms of the Original Indenture is subject
      or intended to be subjected to the lien thereof; and

     

    WHEREAS,
      the Second Predecessor Company has also heretofore executed and delivered an
      Eighteenth Supplemental Indenture dated as of September 1, 1979, a Nineteenth
      Supplemental Indenture dated as of January 15, 1982, a Twentieth Supplemental
      Indenture dated as of August 15, 1983, a Twenty-first Supplemental Indenture
      dated as of August 15, 1983, a Twenty-second Supplemental Indenture dates as
      of
      July 15, 1986, a Twenty-third Supplemental Indenture dated as of July 15, 1986,
      a Twenty-fourth Supplemental Indenture dated as of December 15, 1987, a
      Twenty-fifth Supplemental Indenture dated as of August 15, 1988, a Twenty-sixth
      Supplemental Indenture dated as of September 1, 1990, a Twenty-seventh
      Supplemental Indenture dated as of September 1, 1990, a Twenty-eighth
      Supplemental Indenture dated as of July 1, 1991, a Twenty-ninth Supplemental
      Indenture dated as of June 1, 1993 and a Thirtieth Supplemental Indenture dated
      as of August 15, 1995 pursuant to each of which supplemental indentures the
      Second Predecessor Company provided for the creation of an issue of First
      Mortgage Bonds, and said Twenty-second and Twenty-eighth Supplemental Indentures
      provided for certain modifications of the Original Indenture; and

     

    WHEREAS,
      the Company has heretofore executed and delivered a Thirty-first Supplemental
      Indenture dated as of February 10, 1997, whereby the Company succeeded to the
      Second Predecessor Company with the same effect as if the Company had been
      named
      in the Original Indenture as the mortgagor company and in the Bonds and coupons
      as the obligor thereon or maker thereof, and the Second Predecessor Company
      merged into the Issuer on February 10, 1997 whereupon the Company acquired
      all
      the property, real, personal or mixed, including all rights, privileges,
      immunities 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 Indenture, which by
      the
      terms of the Indenture is subject or intended to be subjected to the lien
      thereof, such Thirty-first Supplemental Indenture further provided for certain
      modifications of the original indenture;

     

    WHEREAS,
      pursuant to the Original Indenture, as heretofore supplemented and modified,
      there have been executed, authenticated, delivered and issued and there are
      outstanding as of the date hereof, First Mortgage Bonds of series and in
      principal amounts as follows: 

    

    
      	
              Principal
                Amount of Bonds

            	
              Series

            
	
               

              Twenty-Five
                Million Dollars

              ($25,000,000)

            	
               

              9.57%
                First Mortgage Bonds

              due
                2020

            
	
               

              Four
                Million Five Hundred Thousand Dollars

              ($4,500,000)

            	
               

              6.51%
                and 6.10% Secured Medium-Term Notes, Series B 

              due
                2008

            
	
               

              Thirteen
                Million Dollars

              ($13,000,000)

            	
               

              6.83%
                and 6.90% Secured Medium-Term Notes, Series B 

              due
                2013

            
	
               

              Thirty-One
                Million Dollars

              ($31,000,000)

            	
               

              6.92%
                and 6.93%
                Secured Medium-Term Notes, Series C 

              due
                2005

            
	
               

              Ten
                Million Dollars

              ($10,000,000)

            	
               

              6.58%
                Secured
                Medium-Term Notes, Series C 

              due
                2006

            
	
               

              Twenty-Five
                Million Dollars

              ($25,000,000)

            	
               

              7.02%
                and 7.04% Secured
                Medium-Term Notes, Series C 

              due
                2007

            
	
               

              Eight
                Million Dollars

              ($8,000,000)

            	
               

              6.61%
                and 6.62% Secured
                Medium-Term Notes, Series C 

              due
                2009

            
	
               

              Seven
                Million Dollars

              ($7,000,000)

            	
               

              7.12%
                Secured
                Medium-Term Notes, Series C 

              due
                2010

            
	
               

              Twelve
                Million Dollars

              ($12,000,000)

            	
               

              7.35%
                and 7.36% Secured
                Medium-Term Notes, Series C 

              due
                2015

            
	
               

              Seventeen
                Million Dollars

              ($17,000,000)

            	
               

              7.15%
                and 7.20% Secured
                Medium-Term Notes, Series C 

              due
                2025

            

    

     

    WHEREAS,
      R.G. Mason, the successor Co-Trustee, resigned on July 31, 1993 and no successor
      trustee was appointed to replace him;

     

    WHEREAS,
      Harris Trust and Savings Bank (the "Original Trustee") resigned as Trustee,
      Paying Agent and Registrar under the Indenture on April 1, 2002;

     

    WHEREAS,
      effective April 1, 2002, the Company appointed BNY Midwest Trust Company to
      act
      as Trustee, Paying Agent and Registrar to succeed the Original Trustee in such
      capacities under the Indenture;

     

    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,
      in order to secure the payment and performance of its obligations under such
      Debenture Indenture, the Company has agreed to create new Bonds from time to
      time with substantially the same terms as the Senior Notes; to issue and deliver
      such Bonds to the Debenture Indenture Trustee in trust for the benefit of the
      owners from time to time of the Senior Notes; and

     

    WHEREAS,
      the Board of Directors of the Company has established a new series of Bonds
      to
      be designated as "Pledged First Mortgage Bonds" due Nine Months or More From
      Date of Issue (hereinafter sometimes called "Bonds of the New Series"), and
      has
      authorized the issuance of an unlimited aggregate principal amount thereof,
      and
      the Company has complied or will comply with all provisions required to issue
      additional Bonds provided for in the Indenture; and

     

    WHEREAS,
      the Company desires to execute and deliver this Thirty-Second Supplemental
      Indenture, in accordance with the provisions of the Indenture, for the purpose
      of providing for the creation of the Bonds of the New Series, designating such
      series to be created and specifying the form and provisions of the Bonds of
      the
      New Series; and

     

    WHEREAS,
      all things necessary have been done to authorize the execution, delivery and
      recording of these presents validly to secure the payment of the principal
      of
      and interest on the aggregate principal amount of such Bonds of the New Series
      as may be issued pursuant to this Thirty-Second Supplemental Indenture, and
      to
      make such Bonds, when executed by the Company, authenticated and delivered
      by
      the Trustee and duly issued, the valid and binding legal obligations of the
      Company, and to constitute the Indenture a valid and binding mortgage for the
      security of all the Bonds in accordance with its and their terms;

     

    NOW,
      THEREFORE, this Thirty-Second Supplemental Indenture

     

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

     

    TO
      HAVE
      AND TO HOLD all and singular the said property, and also all other property
      and
      interest of any kind and of every nature that, by virtue of any provision hereof
      or of the Indenture or otherwise, has or shall hereafter become subject to
      the
      Indenture, to the Trustee, its successor or successors and assigns;

     

    BUT
      IN
      TRUST NEVERTHELESS, for the equal and proportionate benefit and security (except
      as otherwise expressly provided) of all present and future holders of the Bonds
      of the New Series issued and to be issued under and secured by this
      Thirty-Second Supplemental Indenture, and to secure the payment of such Bonds
      of
      the New Series and the interest thereon, prior to the Substitution Date (as
      defined herein), in accordance with the provisions of said Bonds of the New
      Series and of this Thirty-Second Supplemental Indenture, without priority or
      distinction as to lien or otherwise of any Bonds of the New Series over any
      other Bonds of the New Series so that, except as otherwise expressly provided,
      the principal of, and the premium, if any, and interest on, every such Bond
      shall be equally and proportionately secured by this Thirty-Second Supplemental
      Indenture, and to secure the performance of and compliance with the covenants
      and conditions of this Thirty-Second Supplemental Indenture, pursuant to and
      under and subject to the provisions and conditions and for the uses hereinafter
      and in this Thirty-Second Supplemental Indenture set forth; provided, however,
      that on the Substitution Date, the Bonds of the New Series will cease to secure
      the Senior Notes, and, at the option of the Company, the Senior Notes either
      (i) will become unsecured general obligations of the Company or
      (ii) will be secured by first mortgage bonds issued under another mortgage
      indenture; it being hereby agreed as follows, to wit:

     

    ARTICLE
      ONE

     

    BONDS
      OF THE NEW SERIES AND CERTAIN

    PROVISIONS
      RELATING THERETO

     

    SECTION
      1.01

     

    
      	 	
              A.

            	
              Terms
                of Bonds of the New Series

            

    

     

    There
      shall be hereby established a series of bonds, known as and entitled "Pledged
      First Mortgage Bonds" (herein referred to as the "Bonds of the New Series").
      The
      aggregate principal amount of the Bonds of the New Series shall not be limited
      and shall be initially authenticated and delivered from time to time upon
      delivery to the Trustee of the documents required by the Indenture, including
      a
      resolution of the Board of Directors of the Company, or the Securities Pricing
      Committee of such Board of Directors, specifying the following with respect
      to
      each issue of the Bonds of the New Series: (i) any limitations on the
      aggregate principal amount of such issue of Bonds of the New Series,
      (ii) the Original Issue Date (as defined below) or Dates for such issue of
      Bonds of the New Series, (iii) the stated maturity of such issue of Bonds
      of the New Series (provided that no Bond of the New Series shall mature on
      a
      date less than nine months from its Original Issue Date), (iv) the interest
      rate or rates, or method of calculation of such rate or rates, for such issue
      of
      Bonds of the New Series, (v) the terms, if any, regarding the optional or
      mandatory redemption of such issue of Bonds of the New Series, including the
      redemption date or dates, if any, and the price or prices applicable to such
      redemption (including any premium), (vi) whether or not such issue of Bonds
      of the New Series shall be entitled to the benefit of any sinking fund, and
      the
      terms, if any, of such sinking fund, (vii) the designation of such issue of
      Bonds of the New Series, (viii) if the form of such Bonds of the New Series
      is not as described herein, the form of such Bonds of the New Series,
      (ix) the maximum annual interest rate, if any, of the Bonds of the New
      Series permitted for such issue, (x) any other information necessary to
      complete the Bonds of the New Series of such issue and (xi) any other terms
      of such issue not inconsistent with the Indenture or this Thirty-Second
      Supplemental Indenture.

     

    The
      definitive Bonds of the New Series shall be issuable in registered form without
      coupons in denominations of $1,000 and integral multiples thereof or such other
      amount or amounts as may be authorized by a resolution of the Board of Directors
      of the Company or the Securities Pricing Committee of such Board of Directors.
      

     

    Both
      principal of and interest on the Bonds of the New Series (and premium, if any)
      are to be paid in any coin or currency of the United States of America which
      at
      the time of payment is legal tender for the payment of public and private debts
      at a corporate trust office, in the City of New York, New York, of the
      Trustee.

     

    The
      definitive Bonds of the New Series may, at the option of the Company, be fully
      engraved or printed or lithographed on steel engraved borders.

     

    Notwithstanding
      any provision in the Indenture to the contrary, each Bond of the New Series
      shall be dated and issued as of the date of its authentication by the Trustee
      (the "Original Issue Date"). Each Bond of the New Series shall bear interest
      from the later of its Original Issue Date or the most recent date to which
      interest has been paid or duly provided for with respect to such Bond of the
      New
      Series until the principal of such Bond of the New Series is paid or made
      available for payment, and interest on each Bond of the New Series shall be
      payable on each interest payment date after the Original Issue
      Date.

     

    Notwithstanding
      any provision in the Indenture to the contrary, the person in whose name any
      Bond of the New Series is registered at the close of business on any record
      date
      (as determined by the Board of Directors of the Company or the Securities
      Pricing Committee of such Board of Directors) with respect to any interest
      payment date for such Bond of the New Series shall be entitled to receive the
      interest payable on such interest payment date notwithstanding the cancellation
      of such Bond of the New Series upon any registration of transfer, exchange
      or
      substitution thereof subsequent to such record date and prior to such interest
      payment date, except that, if and to the extent that the Company shall default
      in the payment of the interest due on such interest payment date, then the
      registered holders of Bonds of the New Series on such record date shall have
      no
      further right to or claim in respect of such defaulted interest as such
      registered holders on such record date, and the persons entitled to receive
      payment of any defaulted interest thereafter payable or paid on any Bonds of
      the
      New Series shall be the registered holders of such Bonds of the New Series
      on
      the record date for payment of such defaulted interest. Unless otherwise
      determined by the Board of Directors of the Company or the Securities Pricing
      Committee of such Board of Directors, the term "record date" as used in this
      Section 1.01, and in the form of the Bonds of the New Series, with respect
      to any interest payment date applicable to any Bond of the New Series, shall
      mean the last day of the calendar month next preceding such interest payment
      date unless such interest payment date is the date of maturity of such Bond
      of
      the New Series, in which event the record date shall be the date of maturity
      of
      such Bond of the New Series.

     

    In
      case
      of failure by the Company to pay any interest when due, the claim for such
      interest shall be deemed to have been transferred by transfer of any Bond of
      the
      New Series registered on the books of the Company, and the Company, by not
      less
      than 10 days' written notice to the bondholders, may fix a subsequent
      record date, not more than 15 days or less than 10 days prior to the date
      fixed for the payment of such interest, for determination of the holders
      entitled to payment of such interest. Such provision for establishment of a
      subsequent record date, however, shall in no way affect the rights of the
      bondholders or of the Trustee consequent on any default.

     

    The
      Trustee hereunder shall, by virtue of its office as such Trustee, be the
      registrar and transfer agent of the Company for the purpose of registering
      and
      transferring Bonds of the New Series; however, the Company may also act as
      the
      registrar and transfer agent in lieu of the Trustee. Notwithstanding any
      provision in the Indenture to the contrary, neither the Company nor the Trustee
      shall be required to make transfers or exchanges of Bonds of the New Series
      for
      a period of 15 days next preceding any designation of Bonds of the New
      Series to be redeemed, and neither the Company nor the Trustee shall be required
      to make transfers or exchanges of any Bonds designated in whole for redemption
      or that part of any Bond designated in part for redemption.

     

    Notwithstanding
      any other provision of the Indenture to the contrary, the Company shall receive
      a credit against its obligations to make any payment in respect of the principal
      of, or premium, if any, or interest on, any Bond of the New Series (whether
      at
      maturity, upon redemption or otherwise), and such obligations shall be fully
      or
      partially, as the case may be, satisfied and discharged to
      the
      extent that, at the time that any such payment shall be due, the then due
      principal of, or premium, if any, or interest on, the Senior Notes initially
      issued contemporaneously with such Bond of the New Series shall have been fully
      or partially paid or there shall have been deposited with the Debenture
      Indenture Trustee pursuant to the Debenture Indenture sufficient available
      funds
      to fully or partially pay the then due principal of, or premium, if any, or
      interest on, such Senior Notes.
      The
      obligations of the Company hereunder to make such payment of principal of,
      premium, if any, or interest on, such Bond of the New Series shall be deemed
      to
      have been reduced by the amount of such credit.

     

    The
      Debenture Indenture requires that if any Senior Note in respect of which this
      Bond was delivered to the Debenture Indenture Trustee pursuant to the Debenture
      Indenture is deemed paid and discharged pursuant to Section 5.01 of the
      Debenture Indenture, the obligation of the Company to make payment with respect
      to the principal of and premium, if any, and interest on this Bond shall be
      satisfied and discharged and this Bond shall cease to secure such Senior Note
      in
      any manner and, the Debenture Indenture Trustee shall surrender this Bond,
      subject to the limitations of the Debenture Indenture, to the Company for
      cancellation. 

     

    The
      Bonds
      of the New Series shall be issued and delivered pursuant to the Debenture
      Indenture to, registered in the name of, and held by, the Debenture Indenture
      Trustee in trust for the benefit of the owners from time to time of the Senior
      Notes. The Debenture Indenture Trustee shall not sell, assign or transfer any
      of
      the Bonds of the New Series except to a successor trustee under the Debenture
      Indenture. The Company may take such actions as it shall deem desirable to
      effect compliance with such restrictions on transfer, including the placing
      of
      an appropriate legend on the Bonds of the New Series.

     

    
      	 	
              B.

            	
              Form
                of Bonds of the New Series

            

    

     

    The
      Bonds
      of the New Series, and the Trustee's authentication certificate to be executed
      on the Bonds of the New Series, shall be in substantially the following forms
      respectively:

     

    [FORM
      OF
      FACE OF BOND OF THE NEW SERIES]

     

    REGISTERED

     

    $___________

     

    No. _____________   

     

    

     

    PUGET
      SOUND ENERGY, INC.

     

    PLEDGED
      FIRST MORTGAGE BOND

    
      	
               

              Original
                Issue Date:

              __________________

            	
               

              Interest
                Rate:

              ______________%

            	
               

              Maturity
                Date:

              _________________

            
	
               

              Initial
                Redemption Date:

               

              __________________

            	
               

              Initial
                Redemption

              Percentage:

              _______________

            	
               

              Annual
                Redemption

              Percentage
                Reduction:

              _________________

            

    

     

    PUGET
      SOUND ENERGY, INC., a corporation of the state of Washington (the "Company"),
      for value received hereby promises to pay to

     

    DOLLARS

     

    or
      registered assigns, the principal sum of _____________ on the Maturity Date
      set
      forth above, and to pay interest thereon from the Original Issue Date set forth
      above or from the most recent date to which interest has been paid or duly
      provided for, semiannually in arrears on __________ and __________ in each
      year
      (each, an "Interest Payment Date"), commencing on the first such Interest
      Payment Date succeeding the Original Issue Date set forth above, at the per
      annum Interest Rate set forth above, until the principal hereof is paid or
      made
      available for payment. No interest shall accrue on the Maturity Date, so long
      as
      the principal amount of this Note is paid in full on the Maturity Date. The
      interest so payable and punctually paid or duly provided for on any such
      Interest Payment Date will be paid to the person in whose name this Bond is
      registered (the "Holder") at the close of business on the ___ calendar day
      next
      preceding such Interest Payment Date (the "Regular Record Date"); provided
      that
      the first Interest Payment Date for any Bond, the Original Issue Date of which
      is after a Regular Record Date but prior to the applicable Interest Payment
      Date, shall be the Interest Payment Date following the next succeeding Regular
      Record Date; and provided, further, that interest payable on the Maturity Date
      set forth above or, if applicable, upon redemption or acceleration, shall be
      payable to the person to whom principal shall be payable. Any such interest
      not
      so punctually paid or duly provided for will forthwith cease to be payable
      to
      the Holder on such Regular Record Date and shall be paid to the person in whose
      name this Bond is registered at the close of business on a Special Record Date
      for the payment of such defaulted interest to be fixed by the Trustee, notice
      whereof shall be given to the Holder not more than 15 days nor fewer than
      10 days prior to such Special Record Date.

     

    Both
      principal of and interest on this Bond (and premium, if any) are to be paid
      in
      any coin or currency of the United States of America which at the time of
      payment is legal tender for the payment of public and private debts at a
      corporate trust office, in the City of New York, New York, of the
      Trustee.

     

    If
      any
      Interest Payment Date or the date on which the principal of this Bond is
      required to paid is not a Business Day, then payment of principal, premium
      or
      interest need not be made on such date but may be made on the next succeeding
      Business Day with the same force and effect as if made on such Interest Payment
      Date or the date on which the principal of this Bond is required to be paid,
      and, in the case of timely payment thereof, no interest shall accrue for the
      period from and after such Interest Payment Date or the date on which the
      principal of this Bond is required to be paid.

     

    "Business
      Day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not
      a
      day on which banking institutions or trust companies in the Borough of
      Manhattan, The City of New York, or in the city where the corporate trust office
      of the Debenture Indenture Trustee (as defined on the reverse hereof) is
      located, are obligated or authorized by law or executive order to
      close.

     

    This
      Bond
      shall not become obligatory for any purpose or be entitled to any security
      or
      benefit under said Indenture until the authentication certificate hereon shall
      have been signed by the Trustee.

     

    The
      provisions of this Bond are continued on the reverse hereof and such continued
      provisions shall for all purposes have the same effect as though fully set
      forth
      at this place.

     

    IN
      WITNESS WHEREOF, PUGET SOUND ENERGY, INC. has caused these presents to be
      executed in its corporate name and behalf by the facsimile of the signature
      of
      its President or one of its Vice Presidents and by the facsimile of the
      signature of its Treasurer or an Assistant Treasurer or its Secretary, thereunto
      duly authorized, and its corporate seal or a facsimile thereof to be hereto
      affixed.

     

    PUGET
      SOUND ENERGY, INC.

     

    Dated:   

     

    By
      _______________________________

    Its
      _______________________________

     

    And
      by
      ____________________________

    Its
      ________________________________

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

         

        

      

    

     

    [FORM
      OF
      REVERSE OF BOND OF THE NEW SERIES]

     

    PUGET
      SOUND ENERGY, INC.

     

    Pledged
      First Mortgage Bond

     

    This
      Bond
      is one of the Bonds of the above-designated series, of an unlimited authorized
      amount of Bonds of the Company known as First Mortgage Bonds, all issued or
      to
      be issued in one or more series under and secured by a First Mortgage dated
      as
      of April 1, 1957, executed and delivered by the Company to Harris Trust and
      Savings Bank (BNY
      Midwest Trust Company,
      successor) as Trustee, as supplemented and/or modified by indentures
      supplemental thereto, including particularly the Thirty-Second Supplemental
      Indenture dated as of April 1, 2005, relating, among other things, to the Bonds
      of the above-designated series, and by all other instruments supplemental
      thereto (herein sometimes called the "Indenture"), reference to each and all
      of
      which is hereby made for a description of the property mortgaged and pledged
      as
      security for said Bonds, the rights and remedies of the Holder of this Bond
      in
      regard thereto, and the terms and conditions upon which Bonds may be
      issued.

     

    The
      Bonds
      of this series shall be issuable in registered form without coupons in
      denominations of $1,000 and integral multiples thereof or such other amount
      or
      amounts as may be authorized by a resolution of the Board of Directors or the
      Securities Pricing Committee of the Board of Directors. 

     

    This
      Bond
      is issued to secure the payment and performance of the Company's obligations
      under the Indenture, dated as of December 1, 1997 (the "Debenture
      Indenture"), with U.S. Bank National Association (successor to State Street
      Bank
      and Trust Company), as Trustee (the "Debenture Indenture Trustee") to make
      payments in respect of the principal of, premium, if any, and interest on Senior
      Notes of the Company (the "Senior Notes") initially issued contemporaneously
      with this Bond.

     

    Notwithstanding
      any other provision of the Indenture to the contrary, the Company shall receive
      a credit against its obligations to make any payment in respect of the principal
      of, or premium, if any, or interest on, this Bond (whether at maturity, upon
      redemption or otherwise), and such obligations shall be fully or partially,
      as
      the case may be, satisfied and discharged to
      the
      extent that, at the time that any such payment shall be due, the then due
      principal of, or premium, if any, or interest on, the Senior Notes of the
      Company initially issued contemporaneously with this Bond shall have been fully
      or partially paid or there shall have been deposited with the Debenture
      Indenture Trustee pursuant to the Debenture Indenture sufficient available
      funds
      to fully or partially pay the then due principal of, or premium, if any, or
      interest on, such Senior Notes.
      The
      obligations of the Company to make such payment of principal of, premium, if
      any, or interest on, this Bond shall be deemed to have been reduced by the
      amount of such credit.

     

    This
      Bond
      is not transferable except as required to effect transfer to any successor
      trustee under the Debenture Indenture.

     

    This
      Bond
      is subject to redemption at the option of the Company on any date on and after
      the Initial Redemption Date, if any, specified on the face hereof (any date
      fixed for redemption shall hereafter be referred to as a "Redemption Date").
      If
      no Initial Redemption Date is set forth on the face hereof, this Bond may not
      be
      redeemed at the option of the Company prior to the Maturity Date specified
      on
      the face hereof. On and after the Initial Redemption Date, if any, this Bond
      may
      be redeemed at any time in whole or from time to time in part at the option
      of
      the Company at the applicable Redemption Price (as defined below) together
      with
      interest thereon payable to the Redemption Date, on notice given not less than
      30 days nor more than 60 days prior to the Redemption Date. In the event of
      redemption of this Bond in part only, a new Bond of like tenor and series for
      the unredeemed portion hereof shall be issued in the name of the Holder hereof
      upon the surrender hereof.

     

    If
      this
      Bond is redeemable in the foregoing manner at the option of the Company, the
      "Redemption Price" shall initially be the Initial Redemption Percentage,
      specified on the face hereof, of the principal amount of this Bond to be
      redeemed and shall decline at each anniversary of the Initial Redemption Date
      by
      the Annual Redemption Percentage Reduction, if any, specified on the face
      hereof, of the principal amount to be redeemed until the Redemption Price is
      100% of such principal amount.

     

    If
      this
      Bond or any portion hereof ($1,000 or any multiple thereof) is duly designated
      for redemption, if payment of the principal hereof or of such portion, together
      with accrued interest and premium, if any, is irrevocably provided for, and
      if
      notice of such redemption shall have been duly given, this Bond shall cease
      to
      be entitled to the lien of the Indenture from and after the date such payment
      is
      irrevocably so provided for and shall cease to bear interest from and after
      the
      date fixed for redemption.

     

    The
      Indenture provides that (1) the Company and the Trustee, with the consent
      of the holders of not less than 66-2/3% in principal amount of the Bonds at
      the
      time outstanding (determined as provided in the Indenture) including, if more
      than one series of Bonds shall be at the time outstanding, not less than 66-2/3%
      in principal amount of the Bonds at the time outstanding of each series
      affected, may effect, by an indenture supplemental to the Indenture, further
      modifications or alterations of the Indenture and of the rights and obligations
      of the Company and of the holders of the Bonds; provided, however, that no
      such
      modification or alteration shall be made without the consent of the registered
      owner hereof which will (a) extend the maturity of this Bond or reduce the
      rate or extend the time of payment of interest hereon or reduce the amount
      of
      the principal hereof or reduce any premium payable on the redemption hereof,
      or
      (b) permit the creation of any lien, not otherwise permitted, prior to or
      on a parity with the lien of the Indenture, or alter the equal and proportionate
      security afforded by the lien of the Indenture for the Bonds issued thereunder,
      or (c) reduce the number or percentage of the principal amount of the Bonds
      upon the consent of the holders of which modifications or alterations may be
      made as aforesaid or defaults may be waived; and (2) the holders of like
      percentages of the principal amount of the Bonds outstanding and of each such
      series thereof may waive certain uncured past defaults and the consequences
      thereof.

     

    In
      certain events of default, the principal of this Bond may be declared due and
      payable before maturity as provided in said Indenture.

     

    The
      registered owner of this Bond is the Debenture Indenture Trustee. The
      Debenture Indenture requires that if any Senior Note in respect of which this
      Bond was delivered to the Debenture Indenture Trustee pursuant to the Debenture
      Indenture is deemed paid and discharged pursuant to Section 5.01 of the
      Debenture Indenture, the obligation of the Company to make payment with respect
      to the principal of and premium, if any, and interest on this Bond shall be
      satisfied and discharged and this Bond shall cease to secure such Senior Note
      in
      any manner, and the Debenture Indenture Trustee shall surrender this Bond,
      subject to the limitations of the Debenture Indenture, to the Company for
      cancellation. 

     

    The
      Thirty-Second Supplemental Indenture provides that in the event of any default
      of the interest due on any interest payment date, such interest shall not be
      payable to the holder of the Bond on the original record date but shall be
      paid
      to the registered holder of such Bond on the subsequent record date established
      for payment of such defaulted interest.

     

    It
      is
      part of the contract herein contained that each holder hereof waives all right
      of recourse to any personal, statutory or other liability of any promoter,
      shareholder, officer or director, past, present or future, of the Company or
      of
      any predecessor or successor corporation for the collection of any indebtedness
      hereunder as more fully provided in said Indenture.

     

    [FORM
      OF
      TRUSTEE'S AUTHENTICATION CERTIFICATE]

     

    This
      is
      one of the Bonds, of the series designated herein, described in the
      within-mentioned Indenture.

     

    BNY
      MIDWEST TRUST COMPANY,
      as
      Trustee

     

    By
      ___________________________________

    Authorized
      Officer

     

     

    
      	 
              
              SECTION
                1.02

            	
               

              Redemption Provisions

            	 

    

     

        As
      designated
      by resolution of the Board of Directors of the Company or the Securities Pricing
      Committee of such Board of Directors, the Bonds of the New Series may be subject
      to redemption prior to maturity, as a whole at any time or in part from time
      to
      time, at the option of the Company, upon payment of the Redemption Price
      designated by such Board of Directors, or Securities Pricing Committee of the
      Board of Directors, together with interest accrued thereon to the date fixed
      for
      redemption, upon not less than 30 days' nor more than 60 days' notice
      given by first class mail, postage prepaid, to the holder of record at the
      date
      of such notice of each Bond of the New Series affected, at his address as shown
      on the Bond register. Such notice shall be sufficiently given if deposited
      in
      the United States mail within such period.  Neither
      the failure to mail such notice, nor any defect in any notice so mailed to
      any
      holder, shall affect the sufficiency of such notice. The foregoing provision
      with respect to notice shall be subject to all other conditions and provisions
      of the Indenture not inconsistent herewith.

     

     

    
      	 

              SECTION
                1.03

            	
               

              Renewal Fund

            	 

    

     

    Notwithstanding
      the provisions of Section 4.06 of the Original Indenture, the Company
      hereby covenants that, so long as any of the Bonds of the New Series shall
      remain outstanding, (a) the covenants made by the Company in Section 4.04
      of the Original Indenture shall continue in full force and effect and
      (b) Bonds delivered, redeemed or purchased pursuant to said Section Four
      and any amount of unfunded Bond credits used as a credit in Item 7 of any
      renewal fund certificate shall be deemed to be funded, unless and until the
      same
      shall have been reinstated as provided in said Section 4.04 or in
      Section 2.03 of the Indenture. Cash deposited in the depreciation fund may
      not be applied to the redemption of the Bonds of the New Series.

     

     

    
      	 

              SECTION
                1.04

            	
               

              Duration of Effectiveness of Article One

            	 

    

     

        This
      Article
      shall be in force and effect only so long as any of the Bonds of the New Series
      are outstanding.

     

     

    
      	 

              SECTION
                1.05

            	
               

              Execution and Delivery

            	 

    

     

    An
      unlimited aggregate principal amount of Bonds of the New Series may forthwith,
      upon execution and delivery of the Thirty-Second Supplemental Indenture, or
      from
      time to time thereafter, and upon compliance by the Company with the provisions
      of Article Five of the Indenture, be executed by the Company and delivered
      to
      the Trustee and shall thereupon be authenticated and delivered by the Trustee
      to
      or upon the written order of the Company.

     

     

    
      	 

              SECTION
                1.06

            	
               

              Substitution

            	 

    

     

    On
      the
      Substitution Date (as defined below), the Trustee will deliver to the Company
      for cancellation all Bonds of the New Series. The Company will cause the Trustee
      to provide notice to all holders of Bonds of the New Series prior to the
      occurrence of the Substitution Date. "Substitution Date" shall mean the date
      that all Bonds issued and outstanding under the Indenture ("Gas Bonds"), other
      than the Bonds of the New Series or any other Bonds issued to secure the
      Company's obligations on its Senior Notes, and all first mortgage bonds of
      the
      Company issued and outstanding under the First Mortgage (originally, and before
      modification thereof by certain supplemental indentures, called "First and
      Refunding Mortgage"), dated as of June 2, 1924 (the "Electric Mortgage"),
      from the Company, formerly Puget Sound Power & Light Company, to BNY Midwest
      Trust Company, successor to Old Colony Trust Company, as trustee, as
      supplemented and amended ("Electric Bonds" and, together with the Gas Bonds,
      the
      "First Mortgage Bonds"), other than Electric Bonds issued to secure the
      Company's obligations on its Senior Notes, have been retired (at, before or
      after the maturity thereof) through payment, redemption or otherwise (including
      those Gas Bonds deemed to be paid within the meaning of the Indenture and those
      Electric Bonds deemed to be paid within the meaning of the Electric Mortgage).
      

     

    SECTION
      1.07       Definitions

     

    All
      other
      terms used but not otherwise defined in this Thirty-Second Supplemental
      Indenture shall be taken to have the same meaning as in the Indenture, except
      in
      cases where the context herein clearly indicates otherwise.

     

    ARTICLE
      TWO

     

    PRINCIPAL
      AMOUNT PRESENTLY TO BE OUTSTANDING

     

    SECTION
      2.01 

     

    The
      total
      aggregate principal amount of Bonds of the Company issued and outstanding and
      presently to be issued and outstanding under the provisions of and secured
      by
      the Indenture will be One Hundred Fifty-Two Million Five Hundred Thousand
      Dollars ($152,500,000); namely, the series of Bonds set forth
      herein:

    
      	
              Principal
                Amount of Bonds

            	
              Series

            
	
               

              Twenty-Five
                Million Dollars

              ($25,000,000)

            	
               

              9.57%
                First Mortgage Bonds 

              due
                2020

            
	
               

              Four
                Million Five Hundred Thousand Dollars

              ($4,500,000)

            	
               

              6.51%
                and 6.10% Secured Medium-Term Notes, Series B 

              due
                2008

            
	
               

              Thirteen
                Million Dollars

              ($13,000,000)

            	
               

              7.19%
                Secured Medium-Term Notes, Series B 

              due
                2023

            
	
               

              Thirty-One
                Million Dollars

              ($31,000,000)

            	
               

              6.92%
                and 6.93%
                Secured Medium-Term Notes, Series C 

              due
                2005

            
	
               

              Ten
                Million Dollars

              ($10,000,000)

            	
               

              6.58%
                Secured
                Medium-Term Notes, Series C 

              due
                2006

            
	
               

              Twenty-Five
                Million Dollars

              ($25,000,000)

            	
               

              7.02%
                and 7.04% Secured
                Medium-Term Notes, Series C 

              due
                2007

            
	
               

              Eight
                Million Dollars

              ($8,000,000)

            	
               

              6.61%
                and 6.62% Secured
                Medium-Term Notes, Series C 

              due
                2009

            
	
               

              Seven
                Million Dollars

              ($7,000,000)

            	
               

              7.12%
                Secured
                Medium-Term Notes, Series C 

              due
                2010

            
	
               

              Twelve
                Million Dollars

              ($12,000,000)

            	
               

              7.35%
                and 7.36% Secured
                Medium-Term Notes, Series C 

              due
                2015

            
	
               

              Seventeen
                Million Dollars

              ($17,000,000)

            	
               

              7.15%
                and 7.20% Secured
                Medium-Term Notes, Series C 

              due
                2025

            

    

     

    now
      issued and outstanding, and the aggregate principal amount of Bonds of the
      New
      Series that may be authenticated and delivered pursuant to Section 2.02 of
      this
      Thirty-Second Supplemental Indenture. Additional Bonds of the New Series and
      of
      any other series established after the execution and delivery of this
      Thirty-Second Supplemental
      Indenture may from time to time be authenticated, delivered and issued pursuant
      to the terms of the Indenture and indentures supplemental thereto.

     

    SECTION
      2.02

     

    Without
      limitation as to aggregate principal amount, Bonds of the New Series may
      forthwith, upon execution and delivery of this Thirty-Second Supplemental
      Indenture, or from time to time thereafter, and upon compliance by the Company
      with the provisions of Article Five of the Indenture, be executed by the Company
      and delivered to the Trustee and shall thereupon be authenticated and delivered
      by the Trustee to or upon the written order of the Company.

     

    ARTICLE
      THREE

     

    MISCELLANEOUS

     

    SECTION
      3.01

     

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

     

    SECTION
      3.02

     

    The
      Trustee has accepted the amendment of the Indenture effected by this
      Thirty-Second 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
      Thirty-Second Supplemental Indenture or any of the terms or provisions hereof,
      (b) the proper authorization hereof by the Company by corporate action or
      otherwise, and (c) the due execution hereof by the
      Company.

     

    SECTION
      3.03

     

    The
      Company covenants that it is lawfully seized and possessed of all the trust
      estate at the date of the execution of the Thirty-Second 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
      3.04

     

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

     

    SECTION
      3.05

     

    Although
      this Thirty-Second Supplemental Indenture is dated for convenience and for
      the
      purpose of reference as of April 1, 2005, the actual date or dates of
      execution by the Company and by the Trustee are as indicated by their respective
      acknowledgments hereto annexed.

     

    

     

    

    
       

      
        
        

        
          

        

      

      
         

        

      

    

     

    IN
      WITNESS WHEREOF, Puget Sound Energy, Inc. has caused this Thirty-Second
      Supplemental Indenture to be signed in its corporate name and behalf by its
      President or one of its Vice Presidents and its corporate seal to be hereunto
      affixed and attested by its Secretary or one of its Assistant Secretaries,
      and
BNY
      Midwest Trust Company,
      in token
      of its acceptance of the trust hereby created has caused this Thirty-Second
      Supplemental Indenture to be signed in its corporate name and behalf by its
      Vice
      President or one of its Assistant Vice Presidents, and its corporate seal to
      be
      hereunto affixed and attested by one of its Vice Presidents, Assistant Vice
      Presidents or one of its Assistant Secretaries, all on April __, 2005, 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 W. Eldredge_

    James
      W.
      Eldredge

    Corporate
      Secretary

     

    

    

     

    BNY
      MIDWEST TRUST COMPANY

     

    By
/s/
      J. Bartolini  

    J.
      Bartolini

    Vice
      President

     

     

     

    Attest:

     

    /s/
      D. G. Donovan_

    D.
      G.
      Donovan

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
         

        

      

    

    

    

    STATE
      OF
      WASHINGTON )

    ) ss.

    COUNTY
      OF
      KING  )

     

    On
      this
      22nd day of April 2005, before me personally appeared Donald E. Gaines
      and James W. Eldredge to me known to be a Vice President Finance and Treasurer
      and Corporate Secretary, respectively, of PUGET SOUND ENERGY, INC., one of
      the
      corporations that executed the within and foregoing instrument and acknowledged
      the said instrument to be the free and voluntary act and deed of said
      corporation for the uses and purposes therein mentioned, and on oath stated
      that
      they were authorized to execute and attest said instrument, and that the seal
      affixed is the corporate seal of said corporation.

     

    IN
      WITNESS THEREOF I have hereunto set my hand and affixed my official seal the
      day
      and year first above written.

     

    

    _____________________________________

    Carol
      A.
      Nelson

    

    Notary
      Public for the State of Washington

    Residing
      at Redmond

    My
      commission expires: July 20, 2005

    
      
        
        

      

      
        
        

        
          

        

      

      
         

        

      

    

    

    

    STATE
      OF
      ILLINOIS     )

    ) ss.

    COUNTY
      OF
      COOK     )

     

    On
      this
      ____ day of April 2005, before me personally appeared

     

    J.
      Bartolini and D.G. Donovan, to me known to be a Vice President and Assistant
      Vice President, respectively, of BNY Midwest Trust Company, one of the
      corporations that executed the within and foregoing instrument and acknowledged
      the said instrument to be the free and voluntary act and deed of said
      corporation for the uses and purposes therein mentioned, and on oath stated
      that
      they were authorized to and did in the name and on behalf of said corporation
      execute and attest said instrument, and that the seal affixed is the corporate
      seal of said corporation.

     

    IN
      WITNESS WHEREOF I have hereunto set my hand and affixed my official seal the
      day
      and year first above written.

     

    

     

    

    _____________________________________

    [Signature
      of Notary]

    _______________________________________

    [Printed
      Name of Notary]

    Notary
      Public for the State Illinois

    Residing
      at ______________________________

    [City
      of
      Residence] 

    My
      commission expires: ______________20___

       
      [Month
      Day Year]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00098-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00098-of-00352.parquet"}]]