Document:

exh4-1.htm

    
      

      

    

    

    
      Exhibit
4.1

    

    

    

    

    PACIFICORP

    (An
Oregon Corporation)

    

    

    TO

    

    

    THE
BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

    

    (as
successor to The Bank of New York Mellon)

    

    

    As
Trustee under PacifiCorp’s

    Mortgage
and Deed of Trust,

    Dated
as of January 9, 1989

    

    

    

    _____________________

    

    

    

    

    Twenty-Third
Supplemental Indenture

    Dated
as of January 1, 2009

    

    

    Supplemental
to PacifiCorp’s Mortgage and Deed of Trust

    Dated
as of January 9, 1989

    

    

    

    _____________________

    

    

    

    

    This
Instrument Grants a Security Interest by a Transmitting Utility

    

    

    This
Instrument Contains After-Acquired Property Provisions

    

    

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    TWENTY-THIRD
SUPPLEMENTAL INDENTURE

    

    THIS
INDENTURE, dated as of the 1st day
of January, 2009, made and entered into by and between PACIFICORP, a corporation
of the State of Oregon, whose address is 825 NE Multnomah, Portland, Oregon
97232 (hereinafter sometimes called the “Company”), and THE BANK OF NEW YORK
MELLON TRUST COMPANY, N.A. (as successor to The Bank of New York Mellon), a
national banking association whose address is 700 S. Flower Street, Suite 500,
Los Angeles, California 90017 (the “Trustee”), as Trustee under the Mortgage and
Deed of Trust, dated as of January 9, 1989, as heretofore amended and
supplemented (hereinafter called the “Mortgage”), is executed and delivered by
the Company in accordance with the provisions of the Mortgage, this indenture
(hereinafter called the “Twenty-Third Supplemental Indenture”) being
supplemental thereto.

     

    

     

    WHEREAS, the Mortgage was or is
to be recorded in the official records of the States of Arizona, California,
Colorado, Idaho, Montana, New Mexico, Oregon, Utah, Washington and Wyoming and
various counties within such states, which counties include or will include all
counties in which this Twenty-Third Supplemental Indenture is to be recorded;
and

     

    WHEREAS, by the Mortgage the
Company covenanted that it would execute and deliver such supplemental indenture
or indentures and such further instruments and do such further acts as might be
necessary or proper to carry out more effectually the purposes of the Mortgage
and to make subject to the Lien of the Mortgage any property thereafter
acquired, made or constructed and intended to be subject to the Lien thereof;
and

     

    

     

    WHEREAS, in addition to the
property described in the Mortgage, the Company has acquired certain other
property, rights and interests in property; and

     

    

     

    WHEREAS, the Company has
executed, delivered, recorded and filed supplemental indentures as
follows:

    

    
      	 
      	 
      	
              Dated
      as of

            	 
      
	 
      	 
      	 
      	 
      
	
              First

            	 
      	
              March 31,
      1989

            	 
      
	
              Second

            	 
      	
              December 29,
      1989

            	 
      
	
              Third

            	 
      	
              March 31,
      1991

            	 
      
	
              Fourth

            	 
      	
              December 31,
      1991

            	 
      
	
              Fifth

            	 
      	
              March 15,
      1992

            	 
      
	
              Sixth

            	 
      	
              July 31,
      1992

            	 
      
	
              Seventh

            	 
      	
              March 15,
      1993

            	 
      
	
              Eighth

            	 
      	
              November 1,
      1993

            	 
      
	
              Ninth

            	 
      	
              June 1,
      1994

            	 
      
	
              Tenth

            	 
      	
              August 1,
      1994

            	 
      
	
              Eleventh

            	 
      	
              December 1,
      1995

            	 
      
	
              Twelfth

            	 
      	
              September 1,
      1996

            	 
      
	
              Thirteenth

            	 
      	
              November 1,
      1998

            	 
      
	
              Fourteenth

            	 
      	
              November 15,
      2001

            	 
      
	
              Fifteenth

            	 
      	
              June 1,
      2003

            	 
      
	
              Sixteenth

            	 
      	
              September 1,
      2003

            	 
      
	
              Seventeenth

            	 
      	
              August 1,
      2004

            	 
      
	
              Eighteenth

            	 
      	
              June
      1, 2005

            	 
      
	
              Nineteenth

            	 
      	
              August
      1, 2006

            	 
      
	
              Twentieth

            	 
      	
              March
      1, 2007

            	 
      
	
              Twenty-First

            	 
      	
              October
      1, 2007

            	 
      
	
              Twenty-Second

            	 
      	
              July
      1, 2008

            	 
      

    

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

    and 

     

    WHEREAS, the Company has
heretofore issued, in accordance with the provisions of the Mortgage, bonds
entitled and designated First Mortgage and Collateral Trust Bonds or First
Mortgage Bonds, as the case may be, of the series and in the principal amounts
as follows:

    
      	 
      	 
      	
              Series

            	
              Due

              Date

            	
              Aggregate
      Principal

              Amount
      Issued

            	 
      	
              Aggregate
      Principal Amount Outstanding 1

            
	
              First

            	 
      	
              -10.45% Series due
      January 9,
      1990

            	
              1/9/90

            	
              $

            	
              500,000

            	 
      	
              $

            	
              0

            
	
              Second

            	 
      	
              -Secured Medium-Term Notes,
      Series A

            	
              various

            	 
      	
              250,000,000

            	 
      	 
      	
              0

            
	
              Third

            	 
      	
              -Secured Medium-Term Notes,
      Series B

            	
              various

            	 
      	
              200,000,000

            	 
      	 
      	
              0

            
	
              Fourth

            	 
      	
              -Secured Medium-Term Notes,
      Series C

            	
              various

            	 
      	
              300,000,000

            	 
      	 
      	
              111,000,000

            
	
              Fifth

            	 
      	
              -Secured Medium-Term Notes,
      Series D

            	
              various

            	 
      	
              250,000,000

            	 
      	 
      	
              0

            
	
              Sixth

            	 
      	
              -C-U
    Series

            	
              various

            	 
      	
              250,432,000

            	 
      	 
      	
              81,427,000

            
	
              Seventh

            	 
      	
              -Secured Medium-Term Notes,
      Series E

            	
              various

            	 
      	
              500,000,000

            	 
      	 
      	
              165,000,000

            
	
              Eighth

            	 
      	
              -6 3/4% Series due
      April 1,
      2005

            	
              4/1/2005

            	 
      	
              150,000,000

            	 
      	 
      	
              0

            
	
              Ninth

            	 
      	
              -Secured Medium-Term Notes,
      Series F

            	
              various

            	 
      	
              500,000,000

            	 
      	 
      	
              140,000,000

            
	
              Tenth

            	 
      	
              -E-L
    Series

            	
              various

            	 
      	
              71,200,000

            	 
      	 
      	
              71,200,000

            
	
              Eleventh

            	 
      	
              -Secured Medium-Term Notes,
      Series G

            	
              various

            	 
      	
              500,000,000

            	 
      	 
      	
              100,000,000

            
	
              Twelfth

            	 
      	
              -Series 1994-1
      Bonds

            	
              various

            	 
      	
              216,470,000

            	 
      	 
      	
              216,470,000

            
	
              Thirteenth

            	 
      	
              -Adjustable Rate Replacement
      Series

            	
              2002

            	 
      	
              13,234,000

            	 
      	 
      	
              0

            
	
              Fourteenth

            	 
      	
              -9 3/8% Replacement Series due
      1997

            	
              1997

            	 
      	
              50,000,000

            	 
      	 
      	
              0

            
	
              Fifteenth

            	 
      	
              -Bond Credit Series
      Bonds

            	
              various

            	 
      	
              498,589,753

            	 
      	 
      	
              0

            
	
              Sixteenth

            	 
      	
              -Secured Medium-Term Notes,
      Series H

            	
              various

            	 
      	
              500,000,000

            	 
      	 
      	
              125,000,000

            
	
              Seventeenth
      

            	 
      	
              -5.65% Series due
      2006

            	
              11/1/06

            	 
      	
              200,000,000

            	 
      	 
      	
              0

            
	
              Eighteenth

            	 
      	
              -6.90% Series due November 15,
      2011

            	
              11/15/11

            	 
      	
              500,000,000

            	 
      	 
      	
              500,000,000

            
	
              Nineteenth

            	 
      	
              -7.70% Series due November 15,
      2031

            	
              11/15/31

            	 
      	
              300,000,000

            	 
      	 
      	
              300,000,000

            
	
              Twentieth

            	 
      	
              -Collateral Bonds, First 2003
      Series

            	
              12/1/14

            	 
      	
              15,000,000

            	 
      	 
      	
              15,000,000

            
	
              Twenty-First

            	 
      	
              -Collateral
      Bonds, Second 2003 Series

            	
              12/1/16

            	 
      	
              8,500,000

            	 
      	 
      	
              8,500,000

            
	
              Twenty-Second

            	 
      	
              -Collateral Bonds, Third 2003
      Series

            	
              1/1/14

            	 
      	
              17,000,000

            	 
      	 
      	
              17,000,000

            
	
              Twenty-Third

            	 
      	
              -Collateral Bonds, Fourth 2003
      Series

            	
              1/1/16

            	 
      	
              45,000,000

            	 
      	 
      	
              45,000,000

            
	
              Twenty-Fourth

            	 
      	
              -Collateral Bonds, Fifth 2003
      Series

            	
              11/1/25

            	 
      	
              5,300,000

            	 
      	 
      	
              5,300,000

            
	
              Twenty-Fifth

            	 
      	
              -Collateral Bonds, Sixth 2003
      Series

            	
              11/1/25

            	 
      	
              22,000,000

            	 
      	 
      	
              22,000,000

            
	
              Twenty-Sixth

            	 
      	
              -4.30% Series due
      2008

            	
              9/15/08

            	 
      	
              200,000,000

            	 
      	 
      	
              0

            
	
              Twenty-Seventh

            	 
      	
              -5.45% Series due
      2013

            	
              9/15/13

            	 
      	
              200,000,000

            	 
      	 
      	
              200,000,000

            
	
              Twenty-Eighth

            	 
      	
              -4.95% Series due
      2014

            	
              8/15/14

            	 
      	
              200,000,000

            	 
      	 
      	
              200,000,000

            
	
              Twenty-Ninth

            	 
      	
              -5.90% Series due
      2034

            	
              8/15/34

            	 
      	
              200,000,000

            	 
      	 
      	
              200,000,000

            
	
              Thirtieth

            	 
      	
              -5.25%
      Series due 2035

            	
              6/15/35

            	 
      	
              300,000,000

            	 
      	 
      	
              300,000,000

            
	
              Thirty-First

            	 
      	
              -6.10%
      Series due 2036

            	
              8/1/36

            	 
      	
              350,000,000

            	 
      	 
      	
              350,000,000

            
	
              Thirty-Second

            	 
      	
              5.75%
      Series due 2037

            	
              4/1/37

            	 
      	
              600,000,000

            	 
      	 
      	
              600,000,000

            
	
              Thirty-Third

            	 
      	
              6.25%
      Series due 2037

            	
              10/15/37

            	 
      	
              600,000,000

            	 
      	 
      	
              600,000,000

            
	
              Thirty-Fourth

            	 
      	
              5.65%
      Series due 2018

            	
              7/15/18

            	 
      	
              500,000,000

            	 
      	 
      	
              500,000,000

            
	
              Thirty-Fifth

            	 
      	
              6.35%
      Series due 2038

            	
              7/15/38

            	 
      	
              300,000,000

            	 
      	 
      	
              300,000,000

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              1 Amount
      outstanding as of January 1,
2009

            

    

     

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

    and

     

    WHEREAS, Section 2.03 of the
Mortgage provides that the form or forms, terms and conditions of and other
matters not inconsistent with the provisions of the Mortgage, in connection with
each series of bonds (other than the First Series) issued thereunder, shall be
established in or pursuant to one or more Resolutions and/or shall be
established in one or more indentures supplemental to the Mortgage, prior to the
initial issuance of bonds of such series; and

    

     

    WHEREAS, Section 22.04 of the
Mortgage provides, among other things, that any power, privilege or right
expressly or impliedly reserved to or in any way conferred upon the Company by
any provision of the Mortgage, whether such power, privilege or right is in any
way restricted or is unrestricted, may be in whole or in part waived or
surrendered or subjected to any restriction if at the time unrestricted or to
additional restriction if already restricted, and the Company may enter into any
further covenants, limitations, restrictions or provisions for the benefit of
any one or more series of bonds issued thereunder and provide that a breach
thereof shall be equivalent to a Default under the Mortgage, or the Company may
cure any ambiguity contained therein, or in any supplemental indenture, or may
(in lieu of establishment in or pursuant to a Resolution in accordance with
Section 2.03 of the Mortgage) establish the forms, terms and provisions of any
series of bonds other than said First Series, by an instrument in writing
executed by the Company; and

    

     

    WHEREAS, the Company now desires
to create two new series of bonds and (pursuant to the provisions of Section
22.04 of the Mortgage) to add to its covenants and agreements contained in the
Mortgage certain other covenants and agreements to be observed by it;
and

    

    

    WHEREAS, the execution and
delivery by the Company of this Twenty-Third Supplemental Indenture, and the
terms of the bonds of the Thirty-Sixth Series and the Thirty-Seventh Series
herein referred to, have been duly authorized by the Board of Directors in or
pursuant to appropriate Resolutions;

    

     

    Now, Therefore, This Indenture
Witnesseth:

    

     

    That PACIFICORP, an Oregon corporation,
in consideration of the premises and of good and valuable consideration to it
duly paid by the Trustee at or before the ensealing and delivery of these
presents, the receipt and sufficiency whereof is hereby acknowledged, and in
order to secure the payment of both the principal of and interest and premium,
if any, on the bonds from time to time issued under the Mortgage, according to
their tenor and effect and the performance of all provisions of the Mortgage
(including any instruments supplemental thereto and any modification made as in
the Mortgage provided) and of such bonds, and to confirm the Lien of the
Mortgage on certain after-acquired property, hereby mortgages, pledges and
grants a security interest in (subject, however, to Excepted Encumbrances as
defined in Section 1.06 of the Mortgage), unto The Bank of New York Mellon Trust
Company, N.A. (as successor to The Bank of New York Mellon), as Trustee, and to
its successor or successors in said trust, and to said Trustee and its
successors and assigns forever, all properties of the Company real, personal and
mixed, owned by the Company as of the date of the Mortgage and acquired by the
Company after the date of the Mortgage, subject to the provisions of Section
18.03 of the Mortgage, of any kind or nature (except any herein or in the
Mortgage expressly excepted), now owned or, subject to the provisions of Section
18.03 of the Mortgage, hereafter acquired by the Company (by purchase,
consolidation, merger, donation, construction, erection or in any other way) and
wheresoever situated (except such of such properties as are excluded by name or
nature from the Lien hereof), including the properties described in Article V
hereof, and further including (without limitation) all real estate, lands,
easements, servitudes, licenses, permits, franchises, privileges, rights of way
and other rights in or relating to real estate or the occupancy of the same; all
power sites, flowage rights, water rights, water locations, water
appropriations, ditches, flumes, reservoirs, reservoir sites, canals, raceways,
waterways, dams, dam sites, aqueducts, and all other rights or means for
appropriating, conveying, storing and supplying water; all rights of way and
roads; all plants for the generation of electricity and other forms of energy
(whether now known or hereafter developed) by steam, water, sunlight, chemical
processes and/or (without limitation) all other sources of power (whether now
known or hereafter developed); all power houses, gas plants, street lighting
systems, standards and other equipment incidental thereto; all telephone, radio,
television and other communications, image and data transmission systems,
air-conditioning systems and equipment incidental thereto, water wheels, water
works, water systems, steam and hot water plants, substations, lines, service
and supply systems, bridges, culverts, tracks, ice or refrigeration plants and
equipment, offices, buildings and other structures and the equipment thereof;
all machinery, engines, boilers, dynamos, turbines, electric, gas and other
machines, prime movers, regulators, meters, transformers, generators (including,
but not limited to, engine-driven generators and turbogenerator units), motors,
electrical, gas and mechanical appliances, conduits, cables, water, steam, gas
or other pipes, gas mains and pipes, service pipes, fittings, valves and
connections, pole and transmission lines, towers, overhead conductors
and devices, underground conduits, underground conductors and devices, wires,
cables, tools, implements, apparatus, storage battery equipment and all other
fixtures and personalty; all municipal and other franchises, consents or
permits; all lines for the transmission and distribution of electric current and
other forms of energy, gas, steam, water or communications, images and data for
any purpose including towers, poles, wires, cables, pipes, conduits, ducts and
all apparatus for use in connection therewith and (except as herein or in the
Mortgage expressly excepted) all the right, title and interest of the Company in
and to all other property of any kind or nature appertaining to and/or used
and/or occupied and/or enjoyed in connection with any property hereinbefore
described;

    

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

    

     

    TOGETHER WITH all and singular the
tenements, hereditaments, prescriptions, servitudes and appurtenances belonging
or in anywise appertaining to the aforesaid property or any part thereof, with
the reversion and reversions, remainder and remainders and (subject to the
provisions of Section 13.01 of the Mortgage) the tolls, rents, revenues, issues,
earnings, income, product and profits thereof, and all the estate, right, title
and interest and claim whatsoever, at law as well as in equity, which the
Company now has or may hereafter acquire in and to the aforesaid property and
franchises and every part and parcel thereof;

     

    IT IS HEREBY AGREED by the Company that,
subject to the provisions of Section 18.03 of the Mortgage, all the property,
rights and franchises acquired by the Company (by purchase, consolidation,
merger, donation, construction, erection or in any other way) after the date
hereof, except any herein or in the Mortgage expressly excepted, shall be and
are as fully mortgaged and pledged hereby and as fully embraced within the Lien
of the Mortgage as if such property, rights and franchises were now owned by the
Company and were specifically described herein or in the Mortgage and mortgaged
hereby or thereby;

     

    PROVIDED THAT the following are not and
are not intended to be now or hereafter mortgaged or pledged hereunder, nor is a
security interest therein hereby granted or intended to be granted, and the same
are hereby expressly excepted from the Lien and operation of the Mortgage,
namely: (1) cash, shares of stock, bonds, notes and other obligations and other
securities not hereafter specifically pledged, paid, deposited, delivered or
held under the Mortgage or covenanted so to be; (2) merchandise, equipment,
apparatus, materials or supplies held for the purpose of sale or other
disposition in the usual course of business or for the purpose of repairing or
replacing (in whole or part) any rolling stock, buses, motor coaches,
automobiles or other vehicles or aircraft or boats, ships or other vessels, and
any fuel, oil and similar materials and supplies consumable in the operation of
any of the properties of the Company; rolling stock, buses, motor coaches,
automobiles and other vehicles and all aircraft; boats, ships and other vessels;
all crops (both growing and harvested), timber (both growing and harvested),
minerals (both in place and severed), and mineral rights and royalties; (3)
bills, notes and other instruments and accounts receivable, judgments, demands,
general intangibles and choses in action, and all contracts, leases and
operating agreements not specifically pledged under the Mortgage or covenanted
so to be; (4) the last day of the term of any lease or leasehold which may be or
become subject to the Lien of the Mortgage; (5) electric energy, gas, water,
steam, ice and other materials, forms of energy or products generated,
manufactured, produced or purchased by the Company for sale, distribution or use
in the ordinary course of its business; (6) any natural gas wells or natural gas
leases or natural gas transportation lines or other works or property used
primarily and principally in the production of natural gas or its
transportation, primarily for the purpose of sale to natural gas customers or to
a natural gas distribution or pipeline company, up to the point of connection
with any distribution system; (7) the Company’s franchise to be a corporation;
(8) any interest (as lessee, owner or otherwise) in the Wyodak Facility,
including, without limitation, any equipment, parts, improvements,
substitutions, replacements or other property relating thereto; and (9) any
property heretofore released pursuant to any provision of the Mortgage and not
heretofore disposed of by the Company; provided, however, that the
property and rights expressly excepted from the Lien and operation of the
Mortgage in the above subdivisions (2) and (3) shall (to the extent permitted by
law) cease to be so excepted in the event and as of the date that the Trustee or
a receiver for the Trustee shall enter upon and take possession of the Mortgaged
and Pledged Property in the manner provided in Article XV of the Mortgage by
reason of the occurrence of a Default;

    

     

    AND PROVIDED FURTHER, that as to any property
of the Company that, pursuant to the after-acquired property provisions thereof,
hereafter becomes subject to the lien of a mortgage, deed of trust or similar
indenture that may in accordance with the Mortgage hereafter become designated
as a Class “A” Mortgage, the Lien hereof shall at all times be junior and
subordinate to the lien of such Class “A” Mortgage;

    

    TO HAVE AND TO HOLD all such properties, real,
personal and mixed, mortgaged and pledged, or in which a security interest has
been granted by the Company as aforesaid, or intended so to be (subject,
however, to Excepted Encumbrances as defined in Section 1.06 of the Mortgage),
unto The Bank of New York Mellon Trust Company, N.A. (as successor to The Bank
of New York Mellon), as Trustee, and its successors and assigns
forever;

    

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

    

    

     

    IN TRUST NEVERTHELESS, for the same
purposes and upon the same terms, trusts and conditions and subject to and with
the same provisos and covenants as are set forth in the Mortgage, this
Twenty-Third Supplemental Indenture being supplemental to the
Mortgage;

     

    AND IT IS HEREBY COVENANTED by the Company that
all the terms, conditions, provisos, covenants and provisions contained in the
Mortgage shall affect and apply to the property hereinbefore described and
conveyed, and to the estates, rights, obligations and duties of the Company and
the Trustee and the beneficiaries of the trust with respect to said property,
and to the Trustee and its successor or successors in the trust, in the same
manner and with the same effect as if the said property had been owned by the
Company at the time of the execution of the Mortgage, and had been specifically
and at length described in and conveyed to said Trustee by the Mortgage as a
part of the property therein stated to be conveyed.

     

     The
Company further covenants and agrees to and with the Trustee and its successor
or successors in such trust under the Mortgage, as follows:

    

    ARTICLE
I

    

    Thirty-Sixth
Series of Bonds

    

     

    SECTION 1.01. There shall be
a series of bonds designated “5.50% Series due 2019” (herein sometimes referred
to as the Thirty-Sixth Series), each of which shall also bear the descriptive
title “First Mortgage Bond,” and the form thereof, which shall be established by
or pursuant to a Resolution, shall contain suitable provisions with respect to
the matters hereinafter in this Section specified.

     

    (I) Bonds of the Thirty-Sixth Series
shall mature on January 15, 2019 and shall be issued as fully registered bonds
in the minimum denomination of two thousand dollars and, at the option of the
Company, any multiple or multiples of one thousand dollars in excess thereof
(the exercise of such option to be evidenced by the execution and delivery
thereof).

     

    The Company reserves the right to
establish, at any time, by or pursuant to a Resolution filed with the Trustee, a
form of coupon bond, and or appurtenant coupons, for the Thirty-Sixth Series and
to provide for exchangeability of such coupon bonds with the bonds of the
Thirty-Sixth Series issued hereunder in fully registered form and to make all
appropriate provisions for such purpose.

     

    Bonds of the Thirty-Sixth Series need
not be issued at the same time and such series may be reopened at any time,
without notice to or the consent of any then-existing holder or holders of any
bond of the Thirty-Sixth Series, for issuances of additional bonds of the
Thirty-Sixth Series in an unlimited principal amount. Any such additional bonds
will have the same interest rate, maturity and other terms as those initially
issued, except for payment of interest accruing prior to the original issue date
of such additional bonds and, if applicable, for the first interest payment date
following such original issue date.

     

    (II) Bonds of the Thirty-Sixth Series
shall bear interest at the rate of five and fifty hundredths per centum (5.50%)
per annum payable semi-annually in arrears on January 15 and July 15 of each
year (each, an “Interest Payment Date”). Bonds of the Thirty-Sixth Series shall
be dated and shall accrue interest as provided in Section 2.06 of the
Mortgage.

     

    The initial Interest Payment Date is
July 15, 2009. The amount of interest payable will be computed on the basis of a
360-day year consisting of twelve 30-day months. If any date on which interest
is payable on any bond of the Thirty-Sixth Series is not a Business Day, then
payment of the interest payable on that date will be made on the next succeeding
day which is a Business Day (and without any additional interest or other
payment in respect of any delay), with the same force and effect as if made on
such date.

     

    Interest payable on any bond of the
Thirty-Sixth Series and punctually paid or duly provided for on any Interest
Payment Date for such bond will be paid to the person in whose name the bond is
registered at the close of business on the Record Date (as hereinafter
specified) for such bond next preceding such Interest Payment Date; provided, however, that interest
payable at maturity or upon earlier redemption will be payable to the person to
whom principal shall be payable. So long as the bonds of the Thirty-Sixth Series
remain in book-entry only form, the “Record Date” for each Interest Payment Date
shall be the close of business on the Business Day before the applicable
Interest Payment Date. If the bonds of the Thirty-Sixth Series are not in
book-entry only form, the Record Date for each Interest Payment Date shall be
the close of business on the 1st calendar
day of the month in which the applicable Interest Payment Date occurs (whether
or not a Business Day).

    

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

        “Business Day” means, for
purposes of this Section (II), a day other than (i) a Saturday or a Sunday, or
(ii) a day on which banking institutions in The City of New York are authorized
or obligated by law or executive order to remain closed.

     

    Any interest on any bond of the
Thirty-Sixth Series which is payable but is not punctually paid or duly provided
for, on any Interest Payment Date for such bond (herein called “Defaulted
Interest”), shall forthwith cease to be payable to the registered owner on the
relevant Record Date for the payment of such interest solely by virtue of such
owner having been such owner; and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in subsection (i) or (ii)
below:

    

    
      	 
      	
              (i)

            	
              The
      Company may elect to make payment of any Defaulted Interest on the bonds
      of the Thirty-Sixth Series to the persons in whose names such bonds are
      registered at the close of business on a Special Record Date (as
      hereinafter defined) for the payment of such Defaulted Interest, which
      shall be fixed in the following manner: The Company shall, at least 30
      days prior to the proposed date of payment, notify the Trustee in writing
      (signed by an Authorized Financial Officer of the Company) of the amount
      of Defaulted Interest proposed to be paid on each bond of the Thirty-Sixth
      Series and the date of the proposed payment (which date shall be such as
      will enable the Trustee to comply with the next sentence hereof), and at
      the same time the Company shall deposit with the Trustee an amount of
      money equal to the aggregate amount proposed to be paid in respect of such
      Defaulted Interest or shall make arrangements satisfactory to the Trustee
      for such deposit on or prior to the date of the proposed payment, such
      money when deposited to be held in trust for the benefit of the persons
      entitled to such Defaulted Interest as in this subsection provided and not
      to be deemed part of the Mortgaged and Pledged Property. Thereupon, the
      Trustee shall fix a record date (herein referred to as a “Special Record
      Date”) for the payment of such Defaulted Interest which date shall be not
      more than 15 nor less than 10 days prior to the date of the proposed
      payment and not less than 10 days after the receipt by the Trustee of the
      notice of the proposed payment. The Trustee shall promptly notify the
      Company of such Special Record Date and, in the name and at the expense of
      the Company, shall cause notice of the proposed payment of such Defaulted
      Interest and the Special Record Date therefor to be mailed, first-class
      postage prepaid, to each registered owner of a bond of the Thirty-Sixth
      Series at his, her or its address as it appears in the bond register not
      less than 10 days prior to such Special Record Date. Notice of the
      proposed payment of such Defaulted Interest and the Special Record Date
      therefor having been mailed as aforesaid, such Defaulted Interest shall be
      paid to the persons in whose names the bonds of the Thirty-Sixth Series
      are registered at the close of business on such Special Record Date and
      shall no longer be payable pursuant to the following subsection
      (ii).

            
	 
      	
              (ii)

            	
              The
      Company may make payment of any Defaulted Interest on the bonds of the
      Thirty-Sixth Series in any other lawful manner not inconsistent with the
      requirements of any securities exchange on which such bonds may be listed
      and upon such notice as may be required by such exchange, if, after notice
      given by the Company to the Trustee of the proposed payment pursuant to
      this subsection, such payment shall be deemed practicable by the
      Trustee.

            

    

     

    Subject to the foregoing provisions of
this Section, each bond of the Thirty-Sixth Series delivered under the Mortgage
upon transfer of or in exchange for or in lieu of any other bond shall carry all
rights to interest accrued and unpaid, and to accrue, which were carried by such
other bond and each such bond shall bear interest from such date, that neither
gain nor loss in interest shall result from such transfer, exchange or
substitution.

     

    (III) The principal of and interest and
premium, if any, on each bond of the Thirty-Sixth Series shall be payable at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, in such coin or currency of the United States of America as at the time of
payment is legal tender for public and private debts or in such other currency
or currency unit as shall be determined by or in accordance with the Resolution
filed with the Trustee.

     

    (IV) Bonds of the Thirty-Sixth Series
shall not be redeemable prior to maturity at the option of any holder or holders
of such bonds. Bonds of the Thirty-Sixth Series shall be redeemable in whole or
in part and at any time prior to maturity at the option of the Company. The
redemption price shall include accrued and unpaid interest to the redemption
date on the bonds to be redeemed, plus the greater of (a) one hundred per centum
(100%) of the principal amount of bonds then Outstanding to be redeemed, or (b)
the sum of the present values of the remaining scheduled payments of principal
and interest thereon (not including any portion of such payments of interest
accrued as of the redemption date) discounted to the redemption date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate, plus 50 basis points, as calculated by an
Independent Investment Banker. The Company shall give the Trustee notice of such
redemption price immediately after the calculation thereof, and the Trustee
shall have no responsibility for such calculation. If the Company elects to
partially redeem the bonds of the Thirty-Sixth Series, the Trustee shall select
in a fair and appropriate manner the bonds of the Thirty-Sixth Series to be
redeemed.

     

               “Adjusted Treasury Rate”
means, with respect to any redemption date, the yield, under the heading which
represents the average for the immediately preceding week, appearing in the most
recently published statistical release designated “H.15(519)” or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption “Treasury
Constant Maturities,” for the maturity corresponding to the Comparable Treasury
Issue (if no maturity is within three months before or after the Remaining Life,
yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue will be determined and the Adjusted Treasury Rate will
be interpolated or extrapolated from such yields on a straight line basis,
rounding to the nearest month); or if such release (or any successor release) is
not published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date. The Adjusted
Treasury Rate will be calculated on the third Business Day preceding the
redemption date.

    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

    

     

    

     

    “Business Day” means, for
purposes of this Section (IV), a day other than (i) a Saturday or a Sunday, or
(ii) a day on which banking institutions in The City of New York are authorized
or obligated by law or executive order to remain closed.

     

    “Comparable Treasury Issue”
means the United States Treasury security selected by an Independent Investment
Banker as having a maturity comparable to the remaining term of the bonds of the
Thirty-Sixth Series to be redeemed that would be used, at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of such
bonds (the “Remaining Life”).

     

    “Comparable Treasury Price”
means (a) the average of four Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest Reference Treasury
Dealer Quotations, or (b) if the Independent Investment Banker obtains fewer
than four such Reference Treasury Dealer Quotations, the average of all such
quotations.

     

    “Independent Investment
Banker” means one of the Reference Treasury Dealers appointed by the
Company and its successors, or if that firm is unwilling or unable to serve as
such, an independent investment and banking institution of national standing
appointed by the Company.

     

    “Reference Treasury Dealer”
means: (a) each of Barclays Capital Inc., Banc of America Securities LLC, BNP
Paribas Securities Corp. and Greenwich Capital Markets, Inc. and their
respective successors; provided that, if one of
these parties ceases to be a primary U.S. Government securities dealer in New
York City (a “Primary Treasury Dealer”), the Company will substitute another
Primary Treasury Dealer; and (b) any other Primary Treasury Dealers selected by
the Company.

     

    “Reference Treasury Dealer
Quotations” means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Independent Investment
Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) quoted in writing to the
Independent Investment Banker at 5:00 p.m., New York City time, on the third
Business Day preceding such redemption date.

     

    (V) Each bond of the Thirty-Sixth
Series may have such other terms as are not inconsistent with Section 2.03 of
the Mortgage, and as may be determined by or in accordance with a Resolution
filed with the Trustee.

     

    (VI) At the option of the registered
owner, any bonds of the Thirty-Sixth Series, upon surrender thereof for
cancellation at the office or agency of the Company in the Borough of Manhattan,
The City of New York, shall be exchangeable for a like aggregate principal
amount of bonds of the same series and same terms of other authorized
denominations.

     

    (VII) Bonds of the Thirty-Sixth Series
shall be transferable, subject to any restrictions thereon set forth in any such
bond of the Thirty-Sixth Series, upon the surrender thereof for cancellation,
together with a written instrument of transfer, if required by the Company, duly
executed by the registered owner or by his, her or its duly authorized attorney,
at the office or agency of the Company in the Borough of Manhattan, The City of
New York. Upon any transfer or exchange of bonds of the Thirty-Sixth Series, the
Company may make a charge therefor sufficient to reimburse it for any tax or
taxes or other government charge, as provided in Section 2.08 of the Mortgage,
but the Company hereby waives any right to make a charge in addition thereto for
any exchange or transfer of bonds of the Thirty-Sixth Series.

     

    (VIII) After the execution and delivery
of this Twenty-Third Supplemental Indenture and upon compliance with the
applicable provisions of the Mortgage and this Twenty-Third Supplemental
Indenture, it is contemplated that there shall be issued bonds of the
Thirty-Sixth Series in an initial aggregate principal amount of Three-Hundred
Fifty Million Dollars (U.S. $350,000,000).

    

    

    

    
      
        
           

        

        
          8

          
            

          

        

        
           

        

      

    

    

    

    ARTICLE
II

    

    Thirty-Seventh
Series of Bonds

    

     

    SECTION 2.01. There shall be a series
of bonds designated “6.00% Series due 2039” (herein sometimes referred to as the
Thirty-Seventh Series), each of which shall also bear the descriptive title
“First Mortgage Bond,” and the form thereof, which shall be established by or
pursuant to a Resolution, shall contain suitable provisions with respect to the
matters hereinafter in this Section specified.

     

    (I) Bonds of the Thirty-Seventh Series
shall mature on January 15, 2039 and shall be issued as fully registered bonds
in the minimum denomination of two thousand dollars and, at the option of the
Company, any multiple or multiples of one thousand dollars in excess thereof
(the exercise of such option to be evidenced by the execution and delivery
thereof).

     

    The Company reserves the right to
establish, at any time, by or pursuant to a Resolution filed with the Trustee, a
form of coupon bond, and or appurtenant coupons, for the Thirty-Seventh Series
and to provide for exchangeability of such coupon bonds with the bonds of the
Thirty-Seventh Series issued hereunder in fully registered form and to make all
appropriate provisions for such purpose.

     

    Bonds of the Thirty-Seventh Series need
not be issued at the same time and such series may be reopened at any time,
without notice to or the consent of any then-existing holder or holders of any
bond of the Thirty-Seventh Series, for issuances of additional bonds of the
Thirty-Seventh Series in an unlimited principal amount. Any such additional
bonds will have the same interest rate, maturity and other terms as those
initially issued, except for payment of interest accruing prior to the original
issue date of such additional bonds and, if applicable, for the first interest
payment date following such original issue date.

     

    (II) Bonds of the Thirty-Seventh Series
shall bear interest at the rate of six per centum (6.00%) per annum payable
semi-annually in arrears on January 15 and July 15 of each year (each, an
“Interest Payment Date”). Bonds of the Thirty-Seventh Series shall be dated and
shall accrue interest as provided in Section 2.06 of the Mortgage.

     

    The initial Interest Payment Date is
July 15, 2009. The amount of interest payable will be computed on the basis of a
360-day year consisting of twelve 30-day months. If any date on which interest
is payable on any bond of the Thirty-Seventh Series is not a Business Day, then
payment of the interest payable on that date will be made on the next succeeding
day which is a Business Day (and without any additional interest or other
payment in respect of any delay), with the same force and effect as if made on
such date.

     

    Interest payable on any bond of the
Thirty-Seventh Series and punctually paid or duly provided for on any Interest
Payment Date for such bond will be paid to the person in whose name the bond is
registered at the close of business on the Record Date (as hereinafter
specified) for such bond next preceding such Interest Payment Date; provided, however, that interest
payable at maturity or upon earlier redemption will be payable to the person to
whom principal shall be payable. So long as the bonds of the Thirty-Seventh
Series remain in book-entry only form, the “Record Date” for each Interest
Payment Date shall be the close of business on the Business Day before the
applicable Interest Payment Date. If the bonds of the Thirty-Seventh Series are
not in book-entry only form, the Record Date for each Interest Payment Date
shall be the close of business on the 1st calendar
day of the month in which the applicable Interest Payment Date occurs (whether
or not a Business Day).

     

    “Business Day” means, for
purposes of this Section (II), a day other than (i) a Saturday or a Sunday, or
(ii) a day on which banking institutions in The City of New York are authorized
or obligated by law or executive order to remain closed.

     

    Any interest on any bond of the
Thirty-Seventh Series which is payable but is not punctually paid or duly
provided for, on any Interest Payment Date for such bond (herein called
“Defaulted Interest”), shall forthwith cease to be payable to the registered
owner on the relevant Record Date for the payment of such interest solely by
virtue of such owner having been such owner; and such Defaulted Interest may be
paid by the Company, at its election in each case, as provided in subsection (i)
or (ii) below:

    

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    

     

    

    

    
      	 
      	
              (i)

            	
              The
      Company may elect to make payment of any Defaulted Interest on the bonds
      of the Thirty-Seventh Series to the persons in whose names such bonds are
      registered at the close of business on a Special Record Date (as
      hereinafter defined) for the payment of such Defaulted Interest, which
      shall be fixed in the following manner: The Company shall, at least 30
      days prior to the proposed date of payment, notify the Trustee in writing
      (signed by an Authorized Financial Officer of the Company) of the amount
      of Defaulted Interest proposed to be paid on each bond of the
      Thirty-Seventh Series and the date of the proposed payment (which date
      shall be such as will enable the Trustee to comply with the next sentence
      hereof), and at the same time the Company shall deposit with the Trustee
      an amount of money equal to the aggregate amount proposed to be paid in
      respect of such Defaulted Interest or shall make arrangements satisfactory
      to the Trustee for such deposit on or prior to the date of the proposed
      payment, such money when deposited to be held in trust for the benefit of
      the persons entitled to such Defaulted Interest as in this subsection
      provided and not to be deemed part of the Mortgaged and Pledged Property.
      Thereupon, the Trustee shall fix a record date (herein referred to as a
      “Special Record Date”) for the payment of such Defaulted Interest which
      date shall be not more than 15 nor less than 10 days prior to the date of
      the proposed payment and not less than 10 days after the receipt by the
      Trustee of the notice of the proposed payment. The Trustee shall promptly
      notify the Company of such Special Record Date and, in the name and at the
      expense of the Company, shall cause notice of the proposed payment of such
      Defaulted Interest and the Special Record Date therefor to be mailed,
      first-class postage prepaid, to each registered owner of a bond of the
      Thirty-Seventh Series at his, her or its address as it appears in the bond
      register not less than 10 days prior to such Special Record Date. Notice
      of the proposed payment of such Defaulted Interest and the Special Record
      Date therefor having been mailed as aforesaid, such Defaulted Interest
      shall be paid to the persons in whose names the bonds of the
      Thirty-Seventh Series are registered at the close of business on such
      Special Record Date and shall no longer be payable pursuant to the
      following subsection (ii).

            
	 
      	
              (ii)

            	
              The
      Company may make payment of any Defaulted Interest on the bonds of the
      Thirty-Seventh Series in any other lawful manner not inconsistent with the
      requirements of any securities exchange on which such bonds may be listed
      and upon such notice as may be required by such exchange, if, after notice
      given by the Company to the Trustee of the proposed payment pursuant to
      this subsection, such payment shall be deemed practicable by the
      Trustee.

            

    

    

     

    Subject to the foregoing provisions of
this Section, each bond of the Thirty-Seventh Series delivered under the
Mortgage upon transfer of or in exchange for or in lieu of any other bond shall
carry all rights to interest accrued and unpaid, and to accrue, which were
carried by such other bond and each such bond shall bear interest from such
date, that neither gain nor loss in interest shall result from such transfer,
exchange or substitution.

     

    (III) The principal of and interest and
premium, if any, on each bond of the Thirty-Seventh Series shall be payable at
the office or agency of the Company in the Borough of Manhattan, The City of New
York, in such coin or currency of the United States of America as at the time of
payment is legal tender for public and private debts or in such other currency
or currency unit as shall be determined by or in accordance with the Resolution
filed with the Trustee.

     

    (IV) Bonds of the Thirty-Seventh Series
shall not be redeemable prior to maturity at the option of any holder or holders
of such bonds. Bonds of the Thirty-Seventh Series shall be redeemable in whole
or in part and at any time prior to maturity at the option of the Company. The
redemption price shall include accrued and unpaid interest to the redemption
date on the bonds to be redeemed, plus the greater of (a) one hundred per centum
(100%) of the principal amount of bonds then Outstanding to be redeemed, or (b)
the sum of the present values of the remaining scheduled payments of principal
and interest thereon (not including any portion of such payments of interest
accrued as of the redemption date) discounted to the redemption date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate, plus 50 basis points, as calculated by an
Independent Investment Banker. The Company shall give the Trustee notice of such
redemption price immediately after the calculation thereof, and the Trustee
shall have no responsibility for such calculation. If the Company elects to
partially redeem the bonds of the Thirty-Seventh Series, the Trustee shall
select in a fair and appropriate manner the bonds of the Thirty-Seventh Series
to be redeemed.

     

               “Adjusted Treasury Rate”
means, with respect to any redemption date, the yield, under the heading which
represents the average for the immediately preceding week, appearing in the most
recently published statistical release designated “H.15(519)” or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption “Treasury
Constant Maturities,” for the maturity corresponding to the Comparable Treasury
Issue (if no maturity is within three months before or after the Remaining Life,
yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue will be determined and the Adjusted Treasury Rate will
be interpolated or extrapolated from such yields on a straight line basis,
rounding to the nearest month); or if such release (or any successor release) is
not published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date. The Adjusted
Treasury Rate will be calculated on the third Business Day preceding the
redemption date.

    

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

    

     

    

     

    “Business Day” means, for
purposes of this Section (IV), a day other than (i) a Saturday or a Sunday, or
(ii) a day on which banking institutions in The City of New York are authorized
or obligated by law or executive order to remain closed.

     

    “Comparable Treasury Issue”
means the United States Treasury security selected by an Independent Investment
Banker as having a maturity comparable to the remaining term of the bonds of the
Thirty-Seventh Series to be redeemed that would be used, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such bonds (the “Remaining Life”).

     

    “Comparable Treasury Price”
means (a) the average of four Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest Reference Treasury
Dealer Quotations, or (b) if the Independent Investment Banker obtains fewer
than four such Reference Treasury Dealer Quotations, the average of all such
quotations.

     

    “Independent Investment
Banker” means one of the Reference Treasury Dealers appointed by the
Company and its successors, or if that firm is unwilling or unable to serve as
such, an independent investment and banking institution of national standing
appointed by the Company.

     

    “Reference Treasury Dealer”
means: (a) each of Barclays Capital Inc., Banc of America Securities LLC, BNP
Paribas Securities Corp. and Greenwich Capital Markets, Inc. and their
respective successors; provided that, if one of
these parties ceases to be a primary U.S. Government securities dealer in New
York City (a “Primary Treasury Dealer”), the Company will substitute another
Primary Treasury Dealer; and (b) any other Primary Treasury Dealers selected by
the Company.

     

    “Reference Treasury Dealer
Quotations” means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Independent Investment
Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) quoted in writing to the
Independent Investment Banker at 5:00 p.m., New York City time, on the third
Business Day preceding such redemption date.

     

    (V) Each bond of the Thirty-Seventh
Series may have such other terms as are not inconsistent with Section 2.03 of
the Mortgage, and as may be determined by or in accordance with a Resolution
filed with the Trustee.

     

    (VI) At the option of the registered
owner, any bonds of the Thirty-Seventh Series, upon surrender thereof for
cancellation at the office or agency of the Company in the Borough of Manhattan,
The City of New York, shall be exchangeable for a like aggregate principal
amount of bonds of the same series and same terms of other authorized
denominations.

     

    (VII) Bonds of the Thirty-Seventh
Series shall be transferable, subject to any restrictions thereon set forth in
any such bond of the Thirty-Seventh Series, upon the surrender thereof for
cancellation, together with a written instrument of transfer, if required by the
Company, duly executed by the registered owner or by his, her or its duly
authorized attorney, at the office or agency of the Company in the Borough of
Manhattan, The City of New York. Upon any transfer or exchange of bonds of the
Thirty-Seventh Series, the Company may make a charge therefor sufficient to
reimburse it for any tax or taxes or other government charge, as provided in
Section 2.08 of the Mortgage, but the Company hereby waives any right to make a
charge in addition thereto for any exchange or transfer of bonds of the
Thirty-Seventh Series.

     

    (VIII) After the execution and delivery
of this Twenty-Third Supplemental Indenture and upon compliance with the
applicable provisions of the Mortgage and this Twenty-Third Supplemental
Indenture, it is contemplated that there shall be issued bonds of the
Thirty-Seventh Series in an initial aggregate principal amount of Six-Hundred
Fifty Million Dollars (U.S. $650,000,000).

     

    

    

    
      
        
           

        

        
          11

          
            

          

        

        
           

        

      

    

    

    

    ARTICLE
III

    

    The
Company Reserves the Right to Amend Provisions

    

    Regarding
Properties Excepted from Lien of Mortgage

    

        SECTION 3.01. The Company reserves the
right, without any consent or other action by holders of bonds of the Ninth
Series, or any other series of bonds subsequently created under the Mortgage
(including the bonds of the Thirty-Sixth Series and the Thirty-Seventh Series),
to make such amendments to the Mortgage, as heretofore amended and supplemented,
as shall be necessary in order to amend the first proviso to the granting clause
of the Mortgage, which proviso sets forth the properties excepted from the Lien
of the Mortgage, to add a new exception (10) which shall read as
follows:

     

    “(10)
allowances allocated to steam-electric generating plants owned by the Company or
in which the Company has interests, pursuant to Title IV of the Clean Air Act
Amendments of 1990, Pub. L. 101-549, Nov. 15, 1990, 104 Stat. 2399, 42 USC 7651,
et seq., as now in effect or as hereafter supplemented or amended.”

     

     

    ARTICLE
IV

    

    Miscellaneous
Provisions

    

     

    SECTION 4.01. The right, if any, of
the Company to assert the defense of usury against a holder or holders of bonds
of the Thirty-Sixth Series, the Thirty-Seventh Series or any subsequent series
shall be determined only under the laws of the State of New York.

    

     

    SECTION 4.02. The terms defined in the
Mortgage shall, for all purposes of this Twenty-Third Supplemental Indenture,
have the meanings specified in the Mortgage. The terms defined in Article I and
in Article II of this Twenty-Third Supplemental Indenture shall, for purposes of
those respective Articles, have the meanings specified in Article I and in
Article II of this Twenty-Third Supplemental Indenture.

    

     

    SECTION 4.03. The Trustee hereby
accepts the trusts hereby declared, provided, created or supplemented, and
agrees to perform the same upon the terms and conditions herein and in the
Mortgage, as hereby supplemented, set forth, including the
following:

    

     

    The Trustee shall not be responsible in
any manner whatsoever for or in respect of the validity or sufficiency of this
Twenty-Third Supplemental Indenture or for or in respect of the recitals
contained herein, all of which recitals are made by the Company solely.
 Each and every term and condition contained in Article XIX of the Mortgage
shall apply to and form part of this Twenty-Third Supplemental Indenture with
the same force and effect as if the same were herein set forth in full, with
such omissions, variations and insertions, if any, as may be appropriate to make
the same conform to the provisions of this Twenty-Third Supplemental
Indenture.

    

     

    SECTION 4.04. Whenever in this
Twenty-Third Supplemental Indenture either of the Company or the Trustee is
named or referred to, this shall, subject to the provisions of Articles XVIII
and XIX of the Mortgage, be deemed to include the successors and assigns of such
party, and all the covenants and agreements in this Twenty-Third Supplemental
Indenture contained by or on behalf of the Company, or by or on behalf of the
Trustee, shall, subject as aforesaid, bind and inure to the respective benefits
of the respective successors and assigns of such parties, whether so expressed
or not.

    

     

    SECTION 4.05. Nothing in this
Twenty-Third Supplemental Indenture, expressed or implied, is intended, or shall
be construed to confer upon, or to give to, any person, firm or corporation,
other than the parties hereto and the holders of the bonds and coupons
outstanding under the Mortgage, any right, remedy or claim under or by reason of
this Twenty-Third Supplemental Indenture or any covenant, condition,
stipulation, promise or agreement hereof, and all the covenants, conditions,
stipulations, promises and agreements in this Twenty-Third Supplemental
Indenture contained by or on behalf of the Company shall be for the sole and
exclusive benefit of the parties hereto, and of the holders of the bonds and of
the coupons outstanding under the Mortgage.

     

    SECTION 4.06. This Twenty-Third
Supplemental Indenture shall be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.

    

    
      
        
           

        

        
          12

          
            

          

        

        
           

        

      

    

    

    ARTICLE
V

    

    Specific
Description of Property

    

    The
properties of the Company, owned as of the date hereof, and used (or held for
future development and use) in connection with the Company’s electric utility
systems, or for other purposes, as follows:

    

    Populus
to Ben Lomond transmission project, Bliss Law property, HBL-69 &
70

    Lands
located in Box Elder County, State of Utah

    

    A PART OF
THE NORTHEAST QUARTER OF SECTION 12, TOWNSHIP 9 NORTH, RANGE 2 WEST OF THE SALT
LAKE BASE AND MERIDIAN.

    BEGINNING
AT A POINT LOCATED SOUTH 00°00'00" WEST 1043.42 FEET ALONG THE EAST LINE OF SAID
SECTION FROM THE NORTHEAST CORNER OF SAID NORTHEAST QUARTER; RUNNING THENCE
SOUTH 00°00'00" WEST 286.44 FEET TO THE PROJECTION FROM THE WEST OF THE NORTH
LINE OF KOTTER CANYON PUD SUBDIVISION; THENCE ALONG SAID PROJECTION AND THE
NORTH LINE SOUTH 90°00'00" WEST 422.75 FEET; THENCE NORTH 00°00'00" EAST 518.79
FEET; THENCE SOUTH 89°03'17" EAST 422.81 FEET TO THE EAST LINE OF SAID SECTION;
THENCE  SOUTH 00°00'00" WEST 225.38 FEET ALONG SAID EAST LINE TO THE
POINT OF BEGINNING.  CONTAINING 5.00 ACRES.

    

    Populus
to Ben Lomond transmission project, Slash “M” property, SLH-55

    Lands
located in Box Elder County, State of Utah

    

    A parcel
of land situate in the SW 1⁄4 of Section 33, Township 12 North, Range 3 West, Salt
Lake Base and Meridian described as follows: Beginning on the North R.O.W. line
of 12000 North Street (1000 North Tremonton Street) which is N88°38'12”E 1304.83
feet along the section line from SW corner of said Section 33, and N1°21'48”W
43.10 feet. (B.O.B. is N88°38'12”E from the SW corner to the SE corner of said
Section 33) Thence along the West side of Rocky Mountain Transmission Line
Easement N00°47'53”W 965.43 feet to the South R.O.W. of Highline Canal, Thence
along said Canal the following 2 courses;  (1) N52°18'08”E 921.73
feet, (2) N47°19'49”E 26.43 feet to the West R.O.W. line of U.D.O.T. I15
highway, Thence along said R.O.W. the following 5 courses; (1) S08°32'25”W
444.16 feet, (2) S18°00'05”W 841.08 feet, (3) South 148.77 feet, (4) S57°06'00”W
243.60 feet, (5) S82°35'06”W 206.62 feet to the point of beginning.

    Containing  14.69
Acres.

    

    Populus
to Ben Lomond project, Sweeten property, PSL-33

    Lands
located in Onieda County, State of Idaho

    

    COMMENCING
AT A POINT 26 RODS SOUTH OF THE NORTHEAST CORNER OF THE SOUTHEAST QUARTER OF
SECTION 2, TOWNSHIP 13 SOUTH, RANGE 36 EAST, BOISE MERIDIAN, ONEIDA COUNTY,
IDAHO; THENCE RUNNING WEST 39.5 RODS TO THE STATE HIGHWAY LINE; THENCE SOUTHERLY
FOLLOWING THE EAST BOUNDARY OF THE STATE HIGHWAY TO THE SOUTH LINE OF SAID
SECTION 2; THENCE EAST 64 FEET, MORE OF LESS, TO THE SOUTHEAST CORNER OF SAID
SECTION 2; THENCE NORTH 134 RODS TO THE PLACE OF BEGINNING. Containing 22 acres,
more or less.

    

    Silver
Bell property

    Lands
located in San Miguel County, State of Colorado

    

    LEGAL
DESCRIPTION FOR TRACT “B”, A PORTION OF THE ROANOAK PLACER, MINERAL SURVEY NO.
15590 LOCATED IN SAN MIGUEL COUNTY, COLORADO S32, T42N, R9W, NEW MEXICO PRIME
MERIDIAN AND S33, T42N, R9W, NEW MEXICO PRIME MERIDIAN:

    

    Commencing
at corner 10 of the said Roanoak Placer, identical with corner 6 of the Loopton
Lode, M.S. 14048, the Point-of-Beginning, thence along the Tract boundary on the
following courses:

    

    thence
N30o46’03”W, 77.11 ft; thence N82o10’ 21”W, 185.46 ft.;

    thence
N73o12’02”W, 180.92 ft.; N52o28’24”W, 205.83 ft.;

    thence
N80o12’08”W, 196.40 ft.; thence S25o12’00”W, 51.53 ft.;

    thence
S08o09’59”W, 22.26 ft.; thence S23o15’00”E, 42.26 ft.;

    thence
S49o08’35”E, 66.81 ft.; thence S47o12’43”E, 70.50 ft.;

    thence
S57o00’00”E, 63.63 ft.; thence S10o00’57”E, 138.52 ft.;

    to the
intersection with the northerly powerline right-of-way;

    thence
S46o54’16”E, 736.07 ft.; thence S66o26’49”E, 158.67 ft.

    to a
point on line 11-12 of the said Roanoak Placer;

    thence
N12o00’00”E, 476.58 ft. to corner 11 of said Roanoak Placer, a

    point on
the southerly line of the said Loopton Lode, M.S. 14048;

    thence
N50o03’01”W, 261.24 ft. to corner 10 of the said Roanoak Placer,

    the
Point-of-Beginning.  Tract “B” contains 8.96 acres, more or
less.

     

    
      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    

    Snyderville
Substation expansion

    Lands
located in Summit County, State of Utah

    

    Together
with a parcel of land situate in the Southeast Quarter of Section 24, Township 1
South, Range 3 East, Salt Lake Base and Meridian, Summit County, Utah. The
boundaries of said parcel are described as follows, to wit:

    

    Beginning
at the Southeast corner of that certain parcel of land conveyed to Utah Power
and Light Company  by Warranty Deed, filed for record as Entry No.
121729 in Book M52 at Page 561 of the Official records of the Summit County
Recorder, which is 399.79 feet N.00°01'25"W (400 feet NORTH-Record) along the
section  line and 54.37 feet N.89°29'26"W (50 feet WEST-Record) from
the Southeast Corner of said Section 24 and running thence S.26°17'50"W 100.75
feet; thence N.89°28'37"W 70.00 feet; thence N.58°16'24"W 175.00 feet to a point
on the south line of said land, projected westerly; thence S.89°29'26"E 263.49
feet along said projected line to the point of beginning.

    

    The
above-described parcel contains 15,125 square feet or 0.347 acre.

    

    Hoggard
Substation

    Lands
located in Salt Lake County, State of Utah

    

    PARCEL OF
LAND SITUATE IN THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER OF SECTION 35,
TOWNSHIP 2 SOUTH, RANGE 2 WEST, SALT LAKE BASE AND MERIDIAN, SALT LAKE COUNTY,
UTAH DESCRIBED AS FOLLOWS:

    

    BEGINNING
AT A POINT ON THE SOUTH  LINE OF 7800 SOUTH STREET WHICH IS 1542.43
FEET S.89°58'35"W ALONG THE SECTION LINE AND 33.00 FEET S.00°04'35"W FROM THE
NORTHEAST CORNER OF SAID SECTION 35, SAID POINT ALSO BEING THE NORTHWEST CORNER
OF THAT CERTAIN PROPERTY CONVEYED TO UTAH POWER AND LIGHT COMPANY BY CORRECTION
WARRANTY DEED RECORDED AS ENTRY NO. 3419401 IN BOOK 5081 AT PAGE 289 IN THE
OFFICE OF THE SALT LAKE COUNTY RECORDER AND RUNNING THENCE S.00°04'35"W 250.00
FEET TO THE SOUTHWEST CORNER OF SAID UTAH POWER AND LIGHT PROPERTY; THENCE
N.89°58'35"E 200.00 FEET TO THE SOUTHEAST CORNER OF SAID UTAH POWER AND LIGHT
PROPERTY; THENCE S.00°04'35"W 100.00 FEET; THENCE S.89°58'35"W 448.97 FEET TO
THE EASTERLY LINE OF AN EASEMENT GRANTED TO KERN RIVER GAS TRANSMISSION COMPANY
RECORDED AS ENTRY NO. 5406966 IN BOOK 6583 AT PAGE 712 IN THE OFFICE OF THE SALT
LAKE COUNTY RECORDER; THENCE N.00°04'59"E 350.00 FEET ALONG SAID EASTERLY LINE
TO THE SOUTH LINE OF 7800 SOUTH STREET; THENCE N.89°58'35"E 248.93 FEET ALONG
SAID SOUTH LINE TO THE POINT OF BEGINNING, CONTAINING 107,134 SQUARE FEET OR
2.459 ACRES.

    

    Populus-Terminal
345kV transmission line,

    Lands
located in Weber County, State of Utah

    

    Lots 221,
222, 223, 224, 225, 226, 227, 228, 229 and 230 Canterbury Crossing Phase 2,
according to the official plat thereof on file and of record in the Weber County
Recorder’s Office.

    Also,
Lots 318, 319, 320, 321, 322, 323, 324, 325, 326, 327, 328, 329, 330, 331, 332
and 333 Canterbury Crossing Phase 3, According to the official plat thereof on
file and of record in the Weber County Recorder’s Office.

    

    Northwest
Quarter of Section 10, Township 5 North, Range 2 West, Salt Lake Base and
Meridian, Lots 221-230, CANTERBURY CROSSING, PHASE 2, SUBDIVISION and Lots
318-333, CANTERBURY CROSSING, PHASE 3, SUBDIVISION, Weber County,
Utah.

    

    Chehalis
Power Plant

    Lands
located in Lewis County, State of Washington

    

    PARCEL
A

    

    Lot 4 of
Short Plat No. 02-0006, recorded July 26, 2002, under Auditor's File No.
3143957, in volume 2 of Short Platts, page 80, records of Lewis County,
Washington, being located within south half of Section 10 and the northeast
quarter of Section 15, Township 13 North, Range 2 West, W.M., Lewis County,
Washington.

    

    PARCEL
B

    

    An
easement 60 feet in width for ingress, egress and utilities over, under and
across a portion of the southwest quarter of the southeast quarter of Section 10
and the northwest quarter of the northeast quarter of Section 15, Township 13
North, Range 2 West, W.M., Lewis County, Washington, described as
follows:  Commencing at the southeast corner of said southwest quarter
of the southeast quarter of Section 10; thence north 02°06'29" east along the
east line thereof for 100.01 feet, to the Point of Beginning; thence north
88°46'38" west parallel with and 100 feet north as measured perpendicular to the
south line of said subdivision for 256.54 feet; thence south 01°13'22" west for
455.10 feet to the northerly right of way line of Bishop Road; thence south
71°36'50" east along said northerly line for 62.80 feet; thence north 01°13'22"
east for 413.63 feet to a point 40 feet north as measured perpendicular to the
south line of said southwest quarter of the southeast quarter of Section 10;
thence south 88°46'38" east parallel with the south line of said subdivision for
196.54 feet to the east line thereof; thence north 02°06'29" east along said
east line for 60.00 feet to the Point of Beginning.

    
      
        
           

        

        
          14

          
            

          

        

        
           

        

      

    

    

    

     

    IN
WITNESS WHEREOF, PACIFICORP has caused its corporate name to be hereunto
affixed, and this instrument to be signed and sealed by an Authorized Executive
Officer of the Company, and its corporate seal to be attested to by its
Treasurer for and in its behalf, and The Bank of New York Mellon Trust Company,
N.A. has caused its corporate name to be hereunto affixed, and this instrument
to be signed and sealed by one of its Vice Presidents, and its corporate seal to
be attested to by one of its Assistant Vice Presidents, all as of the day and
year first above written.

    

    

    

    
      	
              [SEAL]

            	 
      	 
      	
              PACIFICORP

            
	 
      	 
      	 
      	
              By

            	 
      
	 
      	 
      	 
      	 
      	
              
                 

                / s
      /

              

            
	 
      	 
      	 
      	 
      	
              Bruce
      N. Williams

              Vice
      President and Treasurer

            
	
               

              Attest:

            	 
      	 
      	 
      	 
      
	 
      	
              
                 

                / s
      /

              

            	 
      	 
      	 
      
	 
      	
              Jeffery
      Erb

              Assistant
      Secretary

            	 
      	 
      	 
      
	
               

              [SEAL]

            	 
      	 
      	 
      	
               

              THE BANK OF NEW YORK MELLON
      TRUST COMPANY, N.A., as trustee

            
	 
      	 
      	 
      	
               

               

              By

            	 
      
	 
      	 
      	 
      	 
      	
              
                / s
      /

              

            
	 
      	 
      	 
      	 
      	
              Teresa
      Petta

              Vice
      President

            
	
               

              Attest:

            	 
      	 
      	 
      	 
      
	 
      	
              
                 

                / s
      /

              

            	 
      	 
      	 
      
	 
      	
              Raymond
      Torres

              Assistant
      Vice President

            	 
      	 
      	 
      

    

    

    

    

    

    

    

    
      
        
           

        

        
          15

          
            

          

        

        
           

        

      

    

    

    

    

    
      	
              STATE
      OF OREGON

            	
              )

            
	 
      	
              )

            
	
              COUNTY
      OF MULTNOMAH

            	
              )
      SS.:

            

    

    

     

    On this
6th day of January, 2009, before me, Dianne Balch, a Notary Public in and for
the State of Oregon, personally appeared Bruce N. Williams and Jeffery Erb,
known to me to be Vice President and Treasurer and Assistant Secretary,
respectively, of PACIFICORP, an Oregon corporation, who being duly sworn, stated
that the seal affixed to the foregoing instrument is the corporate seal of said
corporation and acknowledged this instrument to be the free, voluntary, and in
all respects duly and properly authorized act and deed of said
corporation.

    

     

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

    

    

    

    
      	
              [SEAL]

            	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	
              
                / s
      /

              

            
	 
      	 
      	 
      	 
      	
              Residing
      at: Portland, Oregon

            

    

    

    

    

    
      	
              STATE
      OF CALIFORNIA

            	
              )

            
	 
      	
              )

            
	
              COUNTY
      OF LOS ANGELES

            	
              )
      SS.:

            

    

    

     

    On this
6th day of January, 2009, before me, Karen Yu, a Notary Public in and for the
State of California, personally appeared Teresa Petta and Raymond Torres, known
to me to be a Vice President and an Assistant Vice President, respectively, of
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association,
who being duly sworn, stated that the seal affixed to the foregoing instrument
is the corporate seal of said corporation and acknowledged this instrument to be
the free, voluntary, and in all respects duly and properly authorized act and
deed of said corporation.

    

     

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

    

    

    

    
      	
              [SEAL]

            	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	
              
                / s
      /

              

            
	 
      	 
      	 
      	 
      	
              Notary Public, State of
      California

            

    

    

    

    

    

    
      
        
           

        

        
          16exhibit10_1.htm

    
      

    

     

     

    

      877 N 8th West, Riverton, WY 
82501, Ph:  (307) 856-9271, Fx:  (307) 857-3050,
www.usnrg.com

      

      

      For
Immediate Release

      

      U.S.
ENERGY CORP. SIGNS OIL AND GAS PARTICIPATION AGREEMENT WITH PRIVATE UTAH-BASED
COMPANY

      

      

      RIVERTON, Wyoming – January 7,
2009 – U.S. Energy Corp. (NASDAQ Capital Market: “USEG”) (“USE” or the
“Company”), a natural resources exploration and development company with
interests in molybdenum, oil and gas, geothermal, and real estate, today
announced that it has entered in to a Participation Agreement with Ridgeland
Wyoming, Inc. (“Ridgeland”), a private Utah-based oil and gas company to acquire
a 50% working interest in an oil and gas prospect in an Area of Mutual Interest
(AMI) located in northeastern Wyoming.  Ridgeland has over 30 years of
industry experience in the Powder River Basin and will operate the
prospect.

      

      Under the
terms of the agreement, U.S. Energy has paid a $25,000 prospect fee and will be
responsible for approximately 58% of the costs to drill the first well through a
casing point decision, to earn a 50% working interest (40% net revenue
interest).  The initial commitment under the agreement is
approximately $340,000 to the casing point.  Completion of this well,
and up to two additional wells on this leasehold, will be on a “heads-up”
unpromoted basis.  Spudding of the first well is expected to commence
in late January 2009 with an initial planned drilling depth of approximately
6,000 feet.

      

      “With our
current net production rate of approximately 1,700 MCFE/D, we continue to expand
our geographically diverse portfolio of oil and gas assets by taking meaningful
positions in prospects in known producing areas in an effort to manage risk and
ultimately drive cash flow,” stated Keith Larsen, CEO of U.S. Energy
Corp.  “As a company, we continue to evaluate a broad range of oil and
gas opportunities for potential investment, with a goal of exiting the year with
a production rate of 7,000 MCFE/D,” he added.

      

      

      

      * * * *
*

      
        
           

        

        
           

          
            

          

        

        
           

          
            Press
Release

            January
7, 2009

            Page  of
2 of 2

            

          

        

      

      

      

      Note
Regarding Mcfe

      

      In this
press release, Mcfes are derived by converting oil to gas in the ratio of one
barrel of oil to six thousand cubic feet of gas (1 bbl:6 Mcf).  One
thousand cubic feet of gas equivalent (“Mcfe”) amounts may be misleading,
particularly if used in isolation.  A Mcfe conversion ratio of 1 bbl
of oil to 6 Mcf of natural gas is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent a value of
equivalency at the well head.

      

      About
U.S. Energy Corp.

      

      U.S.
Energy Corp. is a diversified natural resource company with interests in
molybdenum, oil and gas, geothermal and real estate.  The Company is
headquartered in Riverton, Wyoming, and its common stock is listed on The NASDAQ
Capital Market under the symbol “USEG”.

      

      * * * *
*

      

      

      Disclosure
Regarding Mineral Resources Under SEC and Canadian Regulations; and
Forward-Looking Statements

      

      The
Company owns or may come to own stock in companies which are traded on foreign
exchanges, and may have agreements with some of these companies to acquire
and/or develop the Company’s mineral properties.  An example is Sutter
Gold Mining Inc.  These other companies are subject to the reporting
requirements of other jurisdictions.

      

      United
States residents are cautioned that some of the information available about our
mineral properties, which is reported by the other companies in foreign
jurisdictions, may be materially different from what the Company is permitted to
disclose in the United States.

      

      This
news release includes statements which may constitute “forward-looking”
statements, usually containing the words “believe,” “estimate,” “project,”
“expect," or similar expressions.  These statements are made pursuant
to the safe harbor provision of the Private Securities Litigation Reform Act of
1995.  Forward-looking statements inherently involve risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements.  Factors that would cause or contribute to
such differences include, but are not limited to, future trends in mineral
prices, the availability of capital, competitive factors, and other
risks.  By making these forward-looking statements, the Company
undertakes no obligation to update these statements for revision or changes
after the date of this release.

      

      For
further information on the differences between the reporting limitations of the
United States, compared to reports filed in foreign jurisdictions, and also
concerning forward-looking statements, please see the Company’s Form 10-K
(“Disclosure Regarding Forward-Looking Statements”; “Disclosure Regarding
Mineral Resources under SEC and Canadian Regulation”; and “Risk Factors”); and
similar disclosures in the Company’s Forms 10-Q.

      

      

      *
* * *.*

      

      For
further information, please contact:

      

      Reggie
Larsen

      Director
of Investor Relations

      U.S.
Energy Corp.

      1 800 776
9271

      Reggie@usnrg.com

      

      Nick
Hurst

      The
Equicom Group

      Investor
Relations

      403 538
4845

      nhurst@equicomgroup.com

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