-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DDSLxRgHpho4WtkLSl7ilFIwmJIcSD82oDlmWeYn+Az/8yBN6N+zjFexu1lSmDwB qE3przL8fTgig8MCFnnMnw== 0000899243-02-001423.txt : 20020508 0000899243-02-001423.hdr.sgml : 20020508 ACCESSION NUMBER: 0000899243-02-001423 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20020506 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020508 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLECO POWER LLC CENTRAL INDEX KEY: 0000018672 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 720244480 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05663 FILM NUMBER: 02638755 BUSINESS ADDRESS: STREET 1: 2030 DONAHUE FERRY ROAD CITY: PINEVILLE STATE: LA ZIP: 71360 BUSINESS PHONE: 3184847400 MAIL ADDRESS: STREET 1: 2030 DONAHUE FERRY ROAD CITY: PINEVILLE STATE: LA ZIP: 71360 FORMER COMPANY: FORMER CONFORMED NAME: CLECO UTILITY GROUP INC DATE OF NAME CHANGE: 19990708 FORMER COMPANY: FORMER CONFORMED NAME: CENTRAL LOUISIANA ELECTRIC CO INC DATE OF NAME CHANGE: 19920703 8-K 1 d8k.txt CURRENT REPORT ON FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): May 6, 2002 CLECO POWER LLC (Exact name of registrant as specified in its charter) Louisiana 1-05663 72-0244480 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 2030 Donahue Ferry Road Pineville, Louisiana 71360-5226 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (318) 484-7400 Item 5. Other Events. On May 6, 2002, Cleco Power LLC (the "Company") entered into an Underwriting Agreement with Edward D. Jones & Co., L.P. and A.G. Edwards & Sons, Inc. (collectively, the "Underwriters") covering the issue and sale of $50,000,000 aggregate principal amount of the Company's 6.05% Insured Quarterly Notes due June 1, 2012 (the "IQ Notes"). The IQ Notes were registered under the Securities Act of 1933, as amended, pursuant to the shelf registration statement (Registration No. 333-52540) of the Company, which is on file with the Securities and Exchange Commission ("SEC"). The consolidated financial statements of Ambac Assurance Corporation ("Ambac Assurance") and its subsidiaries as of December 31, 2001 and December 31, 2000, and for each of the years in the three-year period ended December 31, 2001, prepared in accordance with accounting principles generally accepted in the United States of America, included in the Annual Report on Form 10-K of Ambac Financial Group, Inc. ("Ambac Financial Group") for the year ended December 31, 2001 (filed with the SEC on March 26, 2002, Commission File Number 1-10777), and the Current Reports on Form 8-K filed with the SEC on January 25, 2002 and April 18, 2002, as each related to Ambac Assurance, are hereby incorporated by reference into this Current Report on Form 8-K and the prospectus supplement dated May 6, 2002 relating to the IQ Notes (the "Prospectus Supplement"), and shall be deemed to be part hereof and thereof. The aforementioned financial statements are being supplied by Ambac Assurance for inclusion in the Prospectus Supplement only. No representation is made by the Company, the trustee of the indenture governing the IQ Notes, the Underwriters or any of their affiliates as to the accuracy or completeness of the financial statements. Item 7. Financial Statements and Exhibits. (c) Exhibits. The following exhibits are filed herewith: 1.1 Underwriting Agreement dated as of May 6, 2002 between the Company and the Underwriters. 4.1 Form of Fifth Supplemental Indenture, dated as of May 1, 2002, providing for the issuance of the IQ Notes. 4.2 Form of IQ Note (included in Exhibit 4.1 above). 5.1 Opinion of Baker Botts L.L.P. 23.1 Consent of KPMG LLP. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CLECO POWER LLC Date: May 8, 2002 By: /s/ Kathleen F. Nolen --------------------- Kathleen F. Nolen Treasurer EX-1.1 3 dex11.txt UNDERWRITING AGREEMENT EXHIBIT 1.1 Cleco Power LLC $50,000,000 6.05% Insured Quarterly Notes due June 1, 2012 Underwriting Agreement May 6, 2002 New York, New York Edward D. Jones & Co., L.P. A.G. Edwards & Sons, Inc. c/o Edward D. Jones & Co., L.P. 12555 Manchester Road St. Louis, Missouri 63131 Attention: Mr. Kevin E. Sprouse Dear Ladies and Gentlemen: Cleco Power LLC, a Louisiana limited liability company (the "Company") confirms its agreement with Edward D. Jones & Co., L.P. and A.G. Edwards & Co., L.P., (the "Underwriters", which term shall also include any underwriter substituted as hereinafter provided in Section 8 hereof) as follows: 1. Offering. The Company proposes to issue and sell to the Underwriters -------- an aggregate principal amount of $50,000,000 of its 6.05% Insured Quarterly Notes due June 1, 2012 (the "IQ Notes"). The IQ Notes are to be issued pursuant to an Indenture dated as of October 1, 1988, as amended and supplemented by the First Supplemental Indenture dated as of December 1, 2000, the Second Supplemental Indenture dated as of January 1, 2001, the Third Supplemental Indenture dated as of April 26, 2001, the Fourth Supplemental Indenture dated as of February 1, 2002 and the Fifth Supplemental Indenture to be dated as of May 1, 2002 (the "Fifth Supplemental Indenture") and as it may from time to time hereafter be further amended and supplemented (the "Indenture"), between the Company (successor to Cleco Utility Group Inc., which previously was known as Central Louisiana Electric Company, Inc.) and The Bank of New York (successor to Bankers Trust Company), as trustee (the "Trustee"). The IQ Notes are more particularly described in the Prospectus (as hereinafter defined) and in the Indenture filed as an exhibit to the Registration Statement (as hereinafter defined). The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-52540) for the registration of the offer and sale of certain debt securities, including the IQ Notes, under the Securities Act of 1933, as amended (the "1933 Act"), from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations"). Such registration statement has been declared effective by the Commission, and the Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Promptly after execution and delivery of this Agreement, the Company will prepare and file a prospectus supplement reflecting the terms of the IQ Notes, the terms of the offering thereof and the other matters set forth therein, pursuant to Rule 424(b) under the 1933 Act Regulations. The final prospectus and the final prospectus supplement relating to the IQ Notes in the forms filed with the Commission pursuant to Rule 424(b) under the 1933 Act Regulations for use in connection with the offering of the IQ Notes, are collectively referred to herein as the "Prospectus", and such registration statement in the form in which it became effective, is hereinafter called the "Registration Statement"; provided, however, that all references to the "Registration Statement" and the "Prospectus" shall also be deemed to include all documents incorporated therein by reference pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the date of this Agreement. A "preliminary prospectus" shall be deemed to refer to any prospectus that omitted information to be included upon pricing in a form of prospectus filed with the Commission pursuant to Rule 424(b) under the 1933 Act Regulations and was used after such effectiveness and prior to the initial delivery of the Prospectus to the Underwriters by the Company. For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus or the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to be identical to the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR"). All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" (or other references of like import) in the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in the Registration Statement, any preliminary prospectus or the Prospectus, as the case may be, prior to the date of this Agreement; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the 1934 Act which is incorporated by reference in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be, after the date of this Agreement. 2. Sale and Delivery of the IQ Notes; Closing. Subject to the terms and ------------------------------------------ conditions and based upon the representations and warranties set forth in this Agreement, the Company agrees to sell to each Underwriter, and each Underwriter, severally and not jointly, agrees to purchase from the Company, the principal amount of IQ Notes set forth in Schedule I to this Agreement opposite the name of such Underwriter (plus any additional amount of IQ Notes that such Underwriter may become obligated to purchase pursuant to the provisions of Section 8 hereof), at a price of 97.85% of the principal amount thereof. The Underwriters agree to make a public offering of the IQ Notes at the public offering price and upon the terms and conditions set forth in the Prospectus. Payment of the purchase price for, and delivery of certificates for, the IQ Notes, shall be made at the offices of Sidley Austin Brown Wood llp, 875 Third Avenue, New York, New York, 10048 or at such other place as shall be agreed upon by the Underwriters and the Company, at 9:00 a.m., St. Louis time, on May 9, 2002, or on such later day and time (not later than ten full business days thereafter) as may be agreed upon in writing between the 2 Underwriters and the Company, such day and time of delivery and payment being herein called the "Closing Date." Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to the Underwriters for their accounts of global certificates for the IQ Notes being purchased by the Underwriters. Global certificates for the IQ Notes shall be in such denominations ($1,000 or integral multiples thereof) and registered in such names as the Underwriters may request in writing at least one full business day before the Closing Date. The IQ Notes will be made available for examination and, if applicable, packaging by the Underwriters in The City of New York not later than 10:00 A.M. (Eastern time) on the business day prior to the Closing Date. 3. Representations and Warranties. The Company represents and warrants ------------------------------ to the Underwriters as of the date hereof and as of the Closing Date as set forth below in this Section 3. (a) Compliance with Registration Requirements. The Company meets the ----------------------------------------- requirements for use of Form S-3 under the 1933 Act. The Registration Statement has been declared effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or threatened. (b) Due Organization. The Company has been duly organized and is ---------------- validly existing as a limited liability company under the laws of the State of Louisiana and has the limited liability company power and authority to own its properties and to conduct its business as described in the Registration Statement. (c) Subsidiaries. The Company has no "Significant Subsidiaries", as ------------ such term is defined in Rule 405 of Regulation C of the 1933 Act Regulations. (d) Registration Statement and Prospectus. At the time the ------------------------------------- Registration Statement became effective, the Registration Statement complied, and as of the Closing Date will comply, in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act, and the rules and regulations of the Commission promulgated thereunder. The Registration Statement, at the time it became effective, did not, as of the date hereof, does not, and at the Closing Date, will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus, as of its date and at the Closing Date will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by the Underwriters expressly for use in the Registration Statement or Prospectus or to that part of the Registration Statement which constitutes the Trustee's Statement of Eligibility and Qualification under the 1939 Act (the "Form T-1"). 3 (e) Incorporated Documents. The documents incorporated by reference ---------------------- in the Prospectus, at the time they were or hereafter are filed with the Commission, complied or, when so filed, will comply, as the case may be, in all material respects with the requirements of the 1934 Act and the rules and regulations thereunder (the "1934 Act Regulations"), and, when read together and with the other information in the Prospectus, at the time the Registration Statement became effective, as of the date of the Prospectus and as of the Closing Date, did not and will not, as of such time or dates, as the case may be, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were or are made, not misleading. (f) Accountants. PricewaterhouseCoopers LLP, who have reported upon ----------- certain of the financial statements incorporated by reference in the Registration Statement, are independent public accountants as required by the 1933 Act and the 1933 Act Regulations. (g) Financial Statements. The financial statements and supplemental -------------------- schedules of the Company set forth in or incorporated by reference in the Registration Statement and Prospectus have been prepared from the books and records of the Company in accordance with generally accepted accounting principles consistently followed throughout the periods indicated (except as may be noted therein) and present fairly the financial position of the Company at the dates indicated and the results of its operations, its cash flows and changes in its capital for the periods then ended. (h) Material Changes or Material Transactions. Since the respective ----------------------------------------- dates as of which information is given in the Registration Statement and Prospectus, except as otherwise stated therein, (i) there has not been any material adverse change in the condition of the Company, financial or otherwise, or in the earnings, business affairs or business prospects of the Company, whether or not arising in the ordinary course of business and (ii) no material transaction has been entered into by the Company other than transactions contemplated by the Registration Statement and transactions in the ordinary course of business. (i) No Defaults. The Company is not in violation of or in default ----------- under any term or provision of the Articles of Organization or the Operating Agreement of the Company, as amended, or of any mortgage, indenture, contract, agreement, instrument, judgment, decree or order applicable to the Company or of any statute, rule or regulation, where such violation or default would have a material adverse effect upon the properties, assets, business, prospects or condition (financial or otherwise) of the Company, and no event or condition has occurred or exists which, with the giving of notice or lapse of time or both, would result in any such violation or default which would have such an effect. (j) Regulatory Approvals. The Louisiana Public Service Commission -------------------- (the "LPSC") has authorized the issuance and sale of the IQ Notes as contemplated by this Agreement and as described in the Prospectus; and, other than approvals that may be required under state securities laws, no other approval of any regulatory public body, state or federal, including approval of the Federal Energy Regulatory Commission 4 ("FERC") that may be required under the Federal Power Act, as amended (the "FPA"), is necessary in connection with the issuance and sale of the IQ Notes pursuant to this Agreement. (k) Legal Proceedings. Except as described in the Registration ----------------- Statement, there is no material litigation or governmental proceeding involving or, to the knowledge of the Company, threatened against the Company which might reasonably be expected to result in any material adverse change in the financial condition, results of operations or business of the Company or which is required to be disclosed in the Registration Statement, and no notice has been given by any governmental authority of any proceeding to condemn any material properties of the Company, and, to the knowledge of the Company, no such proceeding is contemplated. (l) Good Title. The Company has good title (either by way of fee ---------- simple, leasehold, easement, right-of-way, grant, servitude, privilege, permit, franchise or license, as the case may be) to all its properties including, without limitation, the properties reflected in the most recent balance sheet of the Company incorporated by reference in the Registration Statement (except for such items thereof which have been disposed of since such date and which do not, in the aggregate, constitute a substantial amount) subject only to (i) the lien of the Indenture of Mortgage, dated as of July 1, 1950, as supplemented, from the Company to Bank One Trust Company, N.A. (successor to First National Bank of Commerce), as trustee, securing the Company's First Mortgage Bonds, and encumbrances permitted thereby and (ii) other encumbrances and defects which do not in the aggregate materially detract from the value of the properties of the Company or impair or interfere with the use of properties material to the business and operations of the Company. (m) Regulatory Compliance. The Company is in substantial compliance --------------------- with all federal and state environmental statutes, rules and regulations and, to the Company's knowledge, has received all required permits necessary for the operation of its business under such statutes, rules and regulations. (n) Authorization and Validity of the IQ Notes. The IQ Notes have ------------------------------------------ been duly authorized for issuance and sale pursuant to this Agreement and, when issued, authenticated and delivered pursuant to the provisions of this Agreement and the Indenture against payment of the consideration therefor specified in this Agreement, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally or by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); the IQ Notes and the Indenture conform in all material respects to all statements relating thereto contained in the Prospectus; and the IQ Notes will be entitled to the benefits provided by the Indenture. (o) Authorization of this Agreement. This Agreement has been duly ------------------------------- authorized, executed and delivered by the Company and is a valid and binding agreement 5 of the Company; and the consummation of the transactions contemplated by this Agreement and the performance of the Company's obligations hereunder will not result in any material violation of, or be in material conflict with or constitute a material default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the properties or assets of the Company that are material to the conduct of its business under the Articles of Organization or the Operating Agreement of the Company, as amended, or any material mortgage, contract, indenture, agreement or instrument to which the Company is a party or by which it is bound, or any judgment, order, statute, rule or regulation applicable to it of any court or governmental body or instrumentality having jurisdiction over it or its properties, and the Company has full legal right, power and authority to enter into this Agreement and to perform all of its obligations hereunder. (p) Authorization of the Indenture. The Indenture, with the exception ------------------------------ of the Fifth Supplemental Indenture, has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the Trustee, constitutes a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally or by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The Fifth Supplemental Indenture has been duly authorized by the Company and, when executed and delivered by the Company prior to the time the IQ Notes are issued, assuming due authorization, execution and delivery by the Trustee, will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally or by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (q) 1935 Act. Based upon the timely filing by Cleco Corporation, a -------- Louisiana corporation and the sole member of the Company (the "Parent"), with the Commission of an exemption statement pursuant to Rule 2 under the Public Utility Holding Company Act of 1935, as amended (the "1935 Act"), the Parent is exempt from regulation as a public utility holding company under the 1935 Act, except with respect to the acquisition of certain voting securities of other domestic public utility companies and utility holding companies. (r) Insurance Policy. The Company has duly authorized all necessary ---------------- action to be taken by it for the procurement of an irrevocable financial guarantee insurance policy for the IQ Notes (the "Insurance Policy") issued by Ambac Assurance Corporation ("Ambac"), insuring the payment of principal of and interest on the IQ Notes when due. 4. Agreements of the Company. The Company agrees with the Underwriters ------------------------- that: (a) At any time when a prospectus relating to the IQ Notes is required to be delivered under the 1933 Act, the Company will not file or make any amendment to the Registration Statement or any supplement to the Prospectus (except for periodic or 6 current reports filed under the 1934 Act) unless the Company has furnished each of the Underwriters a copy for its review prior to filing and given the Underwriters a reasonable opportunity to comment on any such proposed amendment or supplement. Each of the Underwriters shall make its responses thereto, if any, promptly. Immediately following the execution of this Agreement, the Company will prepare a prospectus supplement, in form approved by the Underwriters, setting forth the principal amount of IQ Notes and their terms not otherwise specified in the base prospectus, the Underwriters' names, the price at which the IQ Notes are to be purchased by the Underwriters from the Company, the principal amount of IQ Notes to be purchased by each Underwriter, the initial offering price, the selling concession and reallowance, if any, and such other information as the Underwriters and the Company deem appropriate in connection with the offering of the IQ Notes. The Company will promptly cause the Prospectus to be filed with the Commission pursuant to Rule 424(b) under the 1933 Act Regulations in the manner and within the time period prescribed by such rule and will provide evidence satisfactory to the Underwriters of such filing. The Company will promptly advise the Underwriters (i) at any time when a prospectus relating to the IQ Notes is required to be delivered under the 1933 Act, when any post-effective amendment to the Registration Statement shall have been filed or become effective, (ii) of any request by the Commission for any post-effective amendment of the Registration Statement or supplement to the Prospectus or for any additional information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening by direct communication with the Company of any proceeding for that purpose, and (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the IQ Notes for sale in any jurisdiction or the initiation or threatening by direct communication with the Company of any proceeding for such purpose. The Company will promptly effect the filing of the Prospectus necessary pursuant to Rule 424(b) under the 1933 Act Regulations and will take such steps as it deems necessary to ascertain promptly whether the Prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file the Prospectus. The Company will use its reasonable best efforts to prevent the issuance of any stop order suspending the effectiveness of the Registration Statement and, if issued, to obtain as soon as possible the withdrawal thereof. (b) If at any time when a prospectus relating to the IQ Notes is required to be delivered under the 1933 Act, any event occurs as a result of which the Prospectus would include any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it shall be necessary to amend the Registration Statement or to supplement the Prospectus to comply with the 1933 Act or the 1934 Act or the respective rules thereunder, the Company promptly will (i) notify the Underwriters, (ii) prepare and file with the Commission, subject to the first sentence of paragraph (a) of this Section 4, an amendment or supplement which will correct such statement or omission or effect such compliance, and (iii) supply any supplemented Prospectus to the Underwriters in such quantities as the Underwriters may reasonably request. (c) During the period when a prospectus relating to the IQ Notes is required to be delivered under the 1933 Act, (i) the Company will file promptly all documents 7 required to be filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act and will furnish to the Underwriters copies of such documents, (ii) on or prior to the date on which the Company makes any announcement to the general public concerning earnings or concerning any other event which is required to be described, or which the Company proposes to describe, in a document filed pursuant to the 1934 Act, the Company will furnish to the Underwriters the information contained or to be contained in such announcement or document, (iii) the Company will furnish to the Underwriters copies of all other material press releases or announcements to the general public, and (iv) the Company will immediately notify the Underwriters of (a) any decrease in the rating of the IQ Notes or any other debt securities of the Company by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the 1933 Act) or (b) any public notice given of any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change, as soon as the Company learns of any such decrease or notice. (d) As soon as practicable, but not later than 90 days after the close of the period covered by the earnings statement, the Company will make generally available to its security holders and to the Underwriters an earnings statement or statements of the Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 under the 1933 Act. (e) So long as the Underwriters are required to deliver a prospectus in connection with sales of the IQ Notes, the Company will furnish to the Underwriters and their counsel, without charge, such copies of the Registration Statement (including exhibits thereto) and Prospectus as the Underwriters may reasonably request. (f) The Company will endeavor, in cooperation with the Underwriters, to arrange for the qualification of the IQ Notes for sale under the laws of such jurisdictions of the United States of America as the Underwriters may designate, will maintain such qualifications in effect so long as required for the distribution of the IQ Notes; provided, however, that the Company will not be obligated to file any general consent to service of process or to qualify as a foreign limited liability company in any jurisdiction in which it is not so qualified. (g) The Company will apply the net proceeds from the offering of the IQ Notes in the manner set forth under the caption "The IQ Notes Offering" in the Prospectus. (h) The Company will not, during the period of 30 days from the date on which the IQ Notes are purchased by the Underwriters sell, offer to sell, grant any option for the sale of, or otherwise dispose of any IQ Notes, any security convertible into or exchangeable into or exercisable for the IQ Notes or any debt securities substantially similar to the IQ Notes, without the prior written consent of the Underwriters. (i) The Company shall, whether or not any sale of the IQ Notes is consummated, pay all expenses incident to the performance of its obligations under this 8 Agreement, including the fees and disbursements of its accountants and counsel, the cost of printing or other production and delivery of the Registration Statement, the Prospectus, all amendments thereof and supplements thereto, the Indenture, this Agreement and related documents delivered to the Underwriters, the cost of preparing, printing, packaging and delivering the IQ Notes, the fees and expenses incurred in compliance with Section 4(f) hereof, the fees and disbursements of the Trustee (including legal fees and disbursements, if any, of counsel to the Trustee), the fees of any agency that rates the IQ Notes, and any fees payable in connection with the acceptance of the IQ Notes for clearance and settlement through the facilities of The Depository Trust Company. If this Agreement is terminated by the Underwriters in accordance with the provisions of Section 5 or Section 7(a)(i) hereof, the Company shall reimburse the Underwriters for all of its reasonable out-of-pocket expenses relating to the offer and sale of the IQ Notes contemplated by this Agreement, including the reasonable fees and disbursements of counsel for the Underwriters incurred in connection therewith. 5. Conditions of the Underwriters' Obligations. The obligations of the ------------------------------------------- Underwriters to purchase and pay for the IQ Notes shall be subject to the accuracy of the representations and the warranties on the part of the Company herein contained as of the date hereof and as of the Closing Date, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions: (a) The Prospectus shall have been filed in the manner and within the time period required by Rule 424(b) under the 1933 Act Regulations and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or threatened. (b) On the Closing Date, the Company shall have furnished to the Underwriters the opinion of Baker Botts L.L.P., counsel for the Company, or other counsel satisfactory to the Underwriters, dated the Closing Date, to the effect that: (i) This Agreement constitutes the legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except insofar as enforceability of the indemnification and contribution provisions hereof may be limited under applicable federal or state securities laws and except as such enforceability is subject to the effect of any applicable bankruptcy, insolvency, reorganization or other law relating to or affecting creditors' rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); (ii) Assuming that the Indenture, including the Fifth Supplemental Indenture, has been duly authorized, executed and delivered by the Trustee, the Indenture, including the Fifth Supplemental Indenture, constitutes the legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as such enforceability is subject to the effect of any applicable bankruptcy, 9 insolvency, reorganization or other law relating to or affecting creditors' rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); (iii) The specimen note attached as Exhibit A to the Fifth Supplemental Indenture is in the form and contains the terms required by the Indenture; (iv) Assuming that the IQ Notes have been duly authenticated by the Trustee as specified in the Indenture and delivered against payment of the consideration therefor determined in accordance with this Agreement, the IQ Notes constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, and the IQ Notes are entitled to the benefits of the Indenture, except as such enforceability is subject to the effect of any applicable bankruptcy, insolvency, reorganization or other law relating to or affecting creditors' rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); (v) The execution and delivery of the Indenture, this Agreement and the IQ Notes by the Company and the performance by the Company of its agreements therein or herein will not (a) breach or otherwise violate any order known to us and applicable to the Company in effect on the date hereof of any court or governmental body or instrumentality of the federal government of the United States of America having jurisdiction over the Company or its properties or (b) violate any statute of the federal government of the United States of America in effect on the date hereof, or any rule or regulation in effect on the date hereof applicable to the Company of any governmental body or instrumentality of the federal government of the United States of America having jurisdiction over the Company or its properties; (vi) The terms and provisions of the IQ Notes and the Indenture conform in all material respects to the descriptions thereof contained in the Registration Statement and the Prospectus; (vii) No approval, authorization, consent or order of any public board, body or agency of the federal government of the United States of America is legally required for the issuance and sale of the IQ Notes or the performance by the Company of its agreements in this Agreement, the Indenture or the IQ Notes; (viii) The Registration Statement has become effective under the 1933 Act and, to our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or threatened under the 1933 Act; the Registration Statement and the 10 Prospectus (other than the financial statements and schedules, including the notes thereto, the auditors' report thereon and the related summary of accounting policies, contained or incorporated by reference therein, as to which no opinion need be rendered) appear on their faces to comply as to form in all material respects with the requirements of Form S-3, the applicable rules and regulations with respect thereto under the 1939 Act, the 1933 Act and the 1933 Act Regulations, to the extent that such requirements, rules and regulations are applicable to the forms thereof; and the Prospectus has been filed with or transmitted for filing to the Commission in accordance with Rule 424 of the 1933 Act Regulations; (ix) We do not know of any contracts of a character required to be described in the Registration Statement or Prospectus or to be filed or incorporated by reference as exhibits to the Registration Statement which are not described, filed or incorporated by reference as required; (x) We do not know of any legal proceedings pending or threatened against the Company of a character which are required to be disclosed in the Registration Statement and Prospectus which have not been disclosed therein; (xi) Based upon the timely filing by the Parent with the Commission of an exemption statement pursuant to Rule 2 under the 1935 Act, the Parent is exempt from regulation as a public utility holding company under the 1935 Act, except with respect to the acquisition of certain voting securities of other domestic public utility companies and utility holding companies; (xii) The Indenture is qualified under the 1939 Act; (xiii) The information in the Prospectus under the captions "Description of the IQ Notes" and "Description of the Debt Securities", to the extent that it constitutes a summary of certain provisions of the Indenture or the IQ Notes, has been reviewed by us and is correct in all material respects; and (xiv) The documents incorporated by reference in the Prospectus (other than the financial statements and schedules, including the notes thereto, the auditors' report thereon and the related summary of accounting policies, contained or incorporated by reference into such documents, as to which no opinion need be rendered), at the time they were filed with the Commission, appear on their faces to comply as to form in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations, to the extent that such requirements, rules and regulations are applicable to the forms thereof. 11 In giving such opinion, Baker Botts L.L.P. may rely as to matters of Louisiana law upon the opinion of Phelps Dunbar, L.L.P., or such other satisfactory counsel, as referred to below. Additionally, Baker Botts L.L.P. may state in its opinion that it does not express any opinion with respect to any statements contained in or incorporated by reference in the Registration Statement and the Prospectus relating to Ambac or the Insurance Policy. (c) On the Closing Date, the Company shall have furnished to the Underwriters the opinion of Phelps Dunbar, L.L.P., special Louisiana counsel for the Company, or other counsel satisfactory to the Underwriters, dated the Closing Date, to the effect that: (i) The Company is a limited liability company duly organized and validly existing under the laws of the State of Louisiana and has all limited liability company power and authority necessary to own its properties and to conduct the business in which it is engaged as described in the Prospectus; (ii) To their knowledge, after due inquiry, there is no jurisdiction where the character of the properties owned or the nature of the business conducted by the Company makes necessary the license or qualification of the Company as a foreign limited liability company; (iii) The Company has full right, power and authority to enter into this Agreement and to perform all of its obligations hereunder or contemplated hereby and this Agreement has been duly authorized, executed and delivered by the Company; (iv) The Indenture has been duly authorized, executed and delivered by the Company; (v) The Company has taken all necessary limited liability company action to authorize the execution and delivery of the IQ Notes and the IQ Notes have been duly executed and delivered by the Company; (vi) Other than in connection with the provisions of securities or "blue sky" laws of any jurisdiction in which it is proposed that the IQ Notes be offered or sold (as to which no opinion is being rendered) and other than the required order or orders of the LPSC referred to below, no approval, authorization, consent or order of any public board, body or agency of the State of Louisiana is legally required as of the date hereof for the issuance and sale of the IQ Notes, or the performance by the Company of its agreements in this Agreement, the Indenture or the IQ Notes; (vii) The Company is subject to the jurisdiction of the LPSC, the LPSC has authorized the issuance and sale of the IQ Notes as contemplated by this Agreement and as described in the Prospectus, and 12 the orders of the LPSC with respect to the issuance and sale of the IQ Notes are in full force and effect as of the date hereof; (viii) To our knowledge, the Company has valid and subsisting franchises, consents, certificates and permits, free from burdensome conditions or restrictions, sufficient in all material respects to enable it to carry on its business in the State of Louisiana and in the communities, parishes and other governmental subdivisions thereof in which it operates, taken as a whole; and (ix) The execution and delivery of this Agreement, the Indenture or the IQ Notes by the Company and the performance by the Company of its agreements therein or herein will not (a) breach or result in a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company that are described in the Registration Statement and the Prospectus under, any existing obligation of the Company under any indenture, agreement or instrument known to them to which the Company is a party or by which it is bound, (b) breach or otherwise violate any order known to them and applicable to the Company in effect on the date hereof of any court or governmental body or instrumentality of the State of Louisiana having jurisdiction over the Company or its properties or (c) violate (i) the Articles of Organization or the Operating Agreement of the Company, each as amended to date, or (ii) any statute of the State of Louisiana in effect on the date hereof, or any published rule or regulation, in effect on the date hereof applicable to the Company of any governmental body or instrumentality of the State of Louisiana having jurisdiction over the Company or its properties. In giving such opinion, Phelps Dunbar, L.L.P. may state in its opinion that it does not express any opinion with respect to any statements contained in or incorporated by reference in the Registration Statement and the Prospectus relating to Ambac or the Insurance Policy. (d) On the Closing Date, the Underwriters shall have received from Sidley Austin Brown & Wood llp, counsel for the Underwriters, or other counsel satisfactory to the Underwriter, such opinion or opinions, dated the Closing Date, with respect to matters set forth in clauses (vi), (viii) and (xii) of subparagraph (b) of this Section 5 and to the effect that: (i) Assuming that this Agreement has been duly authorized, executed and delivered by the Company, this Agreement constitutes the legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except insofar as enforceability of the indemnification and contribution provisions hereof may be limited under applicable federal or state securities laws; 13 (ii) Assuming that the Indenture, including the Fifth Supplemental Indenture, has been duly authorized, executed and delivered by each of the Company and the Trustee, the Indenture, including the Fifth Supplemental Indenture, constitutes the legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally or by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); (iii) The specimen note attached as Exhibit A to the Fifth Supplemental Indenture is in the form and contains the terms required by the Indenture; assuming that the IQ Notes have been duly authorized, executed and delivered by the Company and assuming further that the IQ Notes have been duly authenticated by the Trustee as specified in the Indenture and delivered against payment of the consideration therefor determined in accordance with this Agreement, the IQ Notes constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally or by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the IQ Notes are entitled to the benefits of the Indenture; and (iv) The information in the Prospectus under the captions "Description of the IQ Notes" and "Description of the Debt Securities", to the extent that it constitutes a summary of certain provisions of the Indenture or the IQ Notes, has been reviewed by us and is correct in all material respects. In giving such opinion, Sidley Austin Brown & Wood LLP may rely as to matters of Louisiana law upon the opinion of Phelps Dunbar, L.L.P., or such other satisfactory counsel, as referred to above. Additionally, such counsel may state in its opinion that such counsel's opinions are expressed solely with respect to statements contained in or incorporated by reference in the Registration Statement and the Prospectus relating to the Company and that such counsel does not express any opinion with respect to any statements contained in or incorporated by reference in the Registration Statement and the Prospectus relating to the Parent, Ambac or the Insurance Policy. (e) In giving their opinions required by subsections (b) and (d) of this Section 5, each such counsel shall additionally state that nothing has come to their attention that would lead them to believe that (a) the Registration Statement, at the time it became effective (other than (i) the financial statements and schedules, including the notes thereto, the auditors' report thereon and the related summary of accounting policies, contained or incorporated by reference therein, (ii) the other financial information 14 contained or incorporated by reference therein, and (iii) the exhibits thereto, as to which no statement need be made) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (b) the Prospectus, as of its date and as of the Closing Date (other than (i) the financial statements and schedules, including the notes thereto, the auditors' report thereon and the related summary of accounting policies, contained or incorporated by reference therein and (ii) the other financial information contained or incorporated by reference therein, as to which no statement need be made), contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (f) On the Closing Date there shall not have been, since the respective dates as of which information is given in the Registration Statement and the Prospectus, any material adverse change in the condition, financial or otherwise, of the Company, or in the earnings, business affairs or business prospects of the Company, whether or not arising in the ordinary course of business; and the Underwriters shall have received a certificate of the President, the Chief Financial Officer or the Treasurer of the Company to the effect (i) that there has been no such material adverse change, (ii) that the other representations and warranties of the Company contained in Section 3 hereof are true and correct with the same force and effect as though expressly made at and as of the date of such certificate, (iii) that the Company has complied with all agreements and satisfied all conditions pursuant to this Agreement on its part to be performed or satisfied at or prior to the date of such certificate, and (iv) that no stop order suspending the effectiveness of the Registration Statement has been issued and, to the best of such officers' knowledge, no proceedings for that purpose have been initiated or threatened by the Commission. (g) On the date hereof, the Underwriters shall have received a letter from the Company's independent accountants dated as of the date hereof in form and substance satisfactory to the Underwriters. (h) On the Closing Date, the Underwriters shall have received a letter from the Company's independent accountants dated as of the Closing Date in form and substance satisfactory to the Underwriters, confirming as of the Closing Date their letter dated the date hereof and delivered to the Underwriters pursuant to Section 5(g) hereof. (i) On the Closing Date, the Underwriters shall have received from counsel for Ambac an opinion, dated the Closing Date, in form and substance satisfactory to the Underwriters with respect to the description of Ambac in the Prospectus and with respect to the Insurance Policy. (j) On the Closing Date, the Underwriters shall have received a certificate, dated the Closing Date, signed by an officer of Ambac in form and substance satisfactory to the Underwriters. (k) On the Closing Date, the Underwriters shall have received in form satisfactory to them confirmation that the IQ Notes have been rated "AAA" by Standard 15 & Poor's, a Division of The McGraw-Hill Companies, Inc. and "Aaa" by Moody's Investors Service, Inc. (l) On the Closing Date, the Underwriters shall have received evidence that the Insurance Policy has been issued by Ambac with terms agreed upon by the Company, Ambac and the Underwriters. (m) On the date hereof and on the Closing Date, counsel for the Underwriters shall have been furnished with such documents and opinions as such counsel may reasonably require for the purpose of enabling such counsel to pass upon the issuance and sale of the IQ Notes as herein contemplated and related proceedings, or in order to evidence the accuracy or completeness of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the IQ Notes as herein contemplated shall be satisfactory in form and substance in the reasonable judgment of the Underwriters and their counsel. If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Underwriters by notice to the Company at any time at or prior to the Closing Date and any such termination shall be without liability of any party to any other party, except as provided in Section 4(i), and except that Sections 4(i), 6, 9 and 12 shall survive any such termination and remain in full force and effect. 6. Indemnification. --------------- (a) The Company agrees to indemnify and hold harmless each of the Underwriters, the directors, officers, employees and agents of each of the Underwriters and each person who controls each of the Underwriters within the meaning of either the 1933 Act or the 1934 Act against any and all losses, claims, damages or liabilities, joint or several, to which the Underwriters, the directors, officers, employees and agents of the Underwriters and each person who controls any such Underwriter within the meaning of either the 1933 Act or the 1934 Act or any of the aforementioned may become subject under the 1933 Act, the 1934 Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement as originally filed or in any amendment thereof, or in the Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus or any supplement thereto, in light of the circumstances under which such statement was made) not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written 16 information furnished to the Company by the Underwriters specifically for inclusion therein or in reliance upon the Form T-1. This indemnity agreement will be in addition to any liability which the Company may otherwise have. (b) Each of the Underwriters agrees severally and not jointly to indemnify and hold harmless the Company, each of its managers, each of its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of either the 1933 Act or the 1934 Act, to the same extent as the foregoing indemnity from the Company to the Underwriters, but only with reference to written information relating to such Underwriter furnished to the Company by or on behalf of such Underwriter specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which the Underwriters may otherwise have. The Company acknowledges that the statements set forth in the third paragraph, the second sentence of the fourth paragraph, the seventh paragraph and the eighth paragraph under the heading "Underwriting," of the Prospectus constitute the only information furnished in writing by the Underwriters for inclusion in the documents referred to in the foregoing indemnity, and the Underwriters confirm that such statements are correct. (c) Promptly after receipt by an indemnified party under this Section 6 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 6, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent the indemnifying party did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party's choice at the indemnifying party's expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be satisfactory in the reasonable judgment of the indemnified party. Notwithstanding the indemnifying party's election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party 17 shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. In no event shall an indemnifying party be liable for the fees and expenses of more than one counsel (in addition to any local counsel) separate from its own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. (d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 6 is held unenforceable or is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and the Underwriters agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively "Losses") to which the Company and the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company and the Underwriters from the offering of the IQ Notes from which such Losses arise; provided, however, that in no case shall any such Underwriter be responsible for any amount in excess of the underwriting discount received by such Underwriter in connection with the IQ Notes from which such Losses arise. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Underwriters shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the Underwriters in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) of the IQ Notes from which such Losses arise, and benefits received by each Underwriter shall be deemed to be equal to the total underwriting discount received by such Underwriter in connection with the IQ Notes from which such Losses arise. Relative fault shall be determined by reference to whether any alleged untrue statement or omission relates to information provided by the Company or the Underwriters. The Company and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 6, each person who controls each of the Underwriters within the meaning of the 1933 Act or the 1934 Act and each director, officer, employee and agent of each of the Underwriters shall have the same rights to contribution as the Underwriters and each person who controls the Company within the meaning of either the 1933 Act or the 1934 Act, each officer of the Company who shall have signed the Registration Statement, each manager of the Company and each person, if any, who controls the Company shall have the same rights 18 to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d). The Underwriters' respective obligations to contribute pursuant to this Section 6 are several in proportion to the principal amount of IQ Notes set forth opposite their respective names in Schedule I hereto and are not joint. 7. Termination. ----------- (a) This Agreement will be subject to termination by the Underwriters by notice to the Company at any time at or prior to the Closing Date if (i) there shall have occurred, subsequent to the date hereof, any material adverse change, or any change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company, whether or not arising in the ordinary course of business; (ii) there has occurred any material adverse change in the financial markets in the United States, or any outbreak or escalation of hostilities or other international or national calamity or crisis has occurred, in each case, involving the United States or the declaration by the United States of a national emergency or war and, in each case, the effect of which is such as to make it in the reasonable judgment of the Underwriters, impracticable to market the IQ Notes or to enforce contracts for the sale of the IQ Notes; (iii) trading in the Company's debt securities shall have been suspended or materially limited by the Commission, any national securities exchange or The Nasdaq Stock Market or trading in securities generally shall have been suspended or materially limited or minimum or maximum prices for trading shall have been established on any of such exchanges; (iv) a banking moratorium shall have been declared by Federal, Louisiana or New York State authorities, or a material disruption shall have occurred in commercial banking or securities settlement or clearance services in the United States; (v) the rating assigned by any nationally recognized statistical rating organization to the IQ Notes or any other debt securities of the Company as of the date hereof shall have been lowered or withdrawn since the date hereof or if any such rating organization shall have publicly announced that it has under surveillance or review its ratings of the IQ Notes or any other such debt securities; or (vi) there has come to the attention of the Underwriters any facts that would cause the Underwriters to believe that the Prospectus, at the time it was required to be delivered in connection with sales of the IQ Notes, included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time of such delivery, not misleading. (b) If this Agreement is terminated pursuant to this Section 7, such termination shall be without liability of any party to any party except as provided in Section 4(i) hereof, and provided further that Sections 4(i), 6, 9, and 12 shall survive such termination and remain in full force and effect. 8. Default by One of the Underwriters. If one of the Underwriters shall ----------------------------------- fail on the Closing Date to purchase the IQ Notes that it is obligated to purchase under this Agreement (the "Defaulted Securities"), the non-defaulting Underwriter shall have the right, within 24 hours thereafter, to make arrangements for it, or any other underwriter, to purchase all, but not less than all, of the Defaulted Securities upon the terms herein set forth. If, however, the non-defaulting 19 Underwriter shall not have completed such arrangements within such 24-hour period, then such non-defaulting Underwriter shall be obligated to purchase 100% of the aggregate principal amount of the IQ Notes to be purchased hereunder. No action taken pursuant to this Section 8 shall relieve the defaulting Underwriter from liability in respect of its default. In the event of any such default, either the non-defaulting Underwriter or the Company shall have the right to postpone the Closing Date for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. As used herein, the term "Underwriter" includes any person substituted for an Underwriter under this Section 8. 9. Survival of Certain Provisions. The respective agreements, ------------------------------ representations, warranties, indemnities and other statements of the Company or its officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of the Underwriters or the Company or any of the directors, officers, employees, agents or controlling persons referred to in Section 6 hereof, and will survive delivery of and payment for the IQ Notes. The provisions of Section 4(i), 6 and 12 hereof and this Section 9 shall survive the termination or cancellation of this Agreement. 10. Notices. All communications hereunder will be in writing and ------- effective only on receipt, and, if sent to the Underwriters, will be mailed, delivered, transmitted via facsimile or telegraphed and confirmed to Edward D. Jones & Co., L.P., 12555 Manchester Road, St. Louis, Missouri 63131, Attn: Mr. Kevin E. Sprouse, facsimile number : (314) 515-2664 (or such other place as the Underwriters may specify in writing), or, if sent to the Company, will be mailed, delivered, transmitted via facsimile or telegraphed and confirmed to the Company at 2030 Donahue Ferry Road, Pineville, Louisiana 71360, Attn: Treasurer, facsimile number: (318) 484-7685 (or such other place as the Company may specify in writing). 11. Successors. This Agreement shall inure to the benefit of and be ---------- binding upon the parties hereto, their respective successors, the directors, officers, employees, agents and controlling persons referred to in Section 6 hereof and no other person will have any right or obligation hereunder. 12. Applicable Law. This Agreement shall be governed by and construed in -------------- accordance with the laws of the State of New York. 13. Counterparts. This Agreement may be executed in any number of ------------ counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. 20 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter along with all counterparts will represent a binding agreement between the Company and the Underwriters. Very truly yours, CLECO POWER LLC By: /s/ Dilek Samil ------------------------------------- Name: Dilek Samil Title: Senior VP Finance - CFO The foregoing Agreement is hereby confirmed and accepted as of the date hereof. EDWARD D. JONES & CO., L.P. By: /s/ Kevin E. Sprouse ------------------------------- Name: Kevin E. Sprouse Title: Director A.G. EDWARDS & SONS, INC. By: /s/ James E. Hodapp ------------------------------- Name: James E. Hodapp Title: Vice President 21 SCHEDULE I NAME OF UNDERWRITER PRINCIPAL AMOUNT OF ------------------- IQ NOTES -------- Edward D. Jones & Co., L.P. $30,000,000 A.G. Edwards & Sons, Inc. $20,000,000 ----------- $50,000,000 =========== 22 EX-4.1 4 dex41.txt FORM OF FIFTH SUPPLEMENTAL INDENTURE EXHIBIT 4.1 ================================================================================ CLECO POWER LLC (Successor to Cleco Utility Group Inc., formerly Central Louisiana Electric Company, Inc.) TO THE BANK OF NEW YORK (Successor to Bankers Trust Company), as Trustee ______________ FIFTH SUPPLEMENTAL INDENTURE DATED AS OF MAY 1, 2002 ______________ Supplementing the Indenture dated as of October 1, 1988 ================================================================================ FIFTH SUPPLEMENTAL INDENTURE, dated as of May 1, 2002, between CLECO POWER LLC (successor to Cleco Utility Group Inc., formerly Central Louisiana Electric Company, Inc.), a Louisiana limited liability company (the "Company"), having its principal office at 2030 Donahue Ferry Road, Pineville, Louisiana 71360-5226, and THE BANK OF NEW YORK (successor to Bankers Trust Company), a banking corporation duly organized and existing under the laws of the State of New York, as trustee (the "Trustee"), having its principal Corporate Trust Office at 101 Barclay Street, Floor 21W, New York, New York 10286 (the "Fifth Supplemental Indenture"). RECITALS OF THE COMPANY Central Louisiana Electric Company, Inc., a Louisiana corporation, executed and delivered its Indenture dated as of October 1, 1988 to Bankers Trust Company, as trustee (the "Original Indenture" and, as previously and hereby supplemented and amended, the "Indenture"), to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness, in the manner and subject to the conditions set forth therein. Cleco Utility Group Inc. (formerly Central Louisiana Electric Company, Inc.) ("Utility Group") executed and delivered to the Trustee a First Supplemental Indenture dated as of December 1, 2000 (the "First Supplemental Indenture") to the Original Indenture, as permitted by Section 901(8) of the Original Indenture, in order to amend the Original Indenture in certain respects to clarify that Utility Group could consolidate with, or sell, lease or convey all or substantially all of its assets to, or merge with or into any limited liability company. Pursuant to that certain Joint Agreement of Merger of Utility Group with and into Cleco Power LLC effective December 31, 2000, Utility Group merged with and into the Company, and the Company was vested with all rights, privileges and franchises of Utility Group and became responsible for all liabilities and obligations of Utility Group. The Company, as successor to Utility Group, executed and delivered to the Trustee a Second Supplemental Indenture dated as of January 1, 2001 (the "Second Supplemental Indenture") to the Original Indenture as supplemented and modified by the First Supplemental Indenture, in accordance with Section 901(1) thereof, in order to evidence and confirm its succession to Utility Group and its assumption of the covenants therein contained and the Securities. The Company executed and delivered to the Trustee a Third Supplemental Indenture dated as of April 26, 2001 (the "Third Supplemental Indenture") to the Original Indenture as supplemented and modified by the First Supplemental Indenture and the Second Supplemental Indenture, providing for the creation and issue of an additional series of securities as provided therein. The Company executed and delivered to the Trustee a Fourth Supplemental Indenture dated as of February 1, 2002 (the "Fourth Supplemental Indenture") to the Original Indenture as supplemented and modified by the First Supplemental Indenture, the Second Supplemental Indenture and the Third Supplemental Indenture, providing for the creation and issue of an additional series of securities as provided therein. 1 The Company, in the exercise of the power and authority conferred upon and reserved to it under the provisions of the Original Indenture, including Section 901(6) thereof, and pursuant to appropriate resolutions of the Board of Directors, has duly determined to make, execute and deliver to the Trustee this Fifth Supplemental Indenture to the Indenture in accordance with Sections 201, 301 and 303 of the Original Indenture in order to establish the form or terms of, and to provide for the creation and issue of, an additional series of Securities under the Original Indenture in the aggregate principal amount of $50,000,000. All things necessary to make this Fifth Supplemental Indenture a valid agreement of the Company have been done. NOW, THEREFORE, THIS FIFTH SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises and of the covenants contained in the Indenture and in this Fifth Supplemental Indenture and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is mutually covenanted and agreed, for the equal and proportionate benefit of all the Holders of the Securities or of series thereof, as follows: ARTICLE ONE ADDITIONAL DEFINITIONS Section 1.01. Additional Definitions. Capitalized terms used herein shall have the meanings specified herein or in the Indenture, as the case may be. Unless otherwise indicated, section references herein shall be to the sections of the Indenture. For all purposes of this Fifth Supplemental Indenture: "Beneficial Owner" has the meaning set forth in Section 5.01 hereof. "Certificated Note" has the meaning set forth in Section 2.09(b) hereof. "Corporate Trust Office of the Trustee" means the principal office of the Trustee located at The Bank of New York, 101 Barclay Street, Floor 21W, New York, New York, 10286; telecopier: (212) 896-7294. "Covenant Defeasance" has the meaning set forth in Section 6.03 hereof. "Defaulted Interest" has the meaning set forth in Section 2.04(c) hereof. "Defeasance" has the meaning set forth in Section 6.02 hereof. "Depositary" means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities. 2 "Estate Redemption Date" has the meaning set forth in Section 5.02(d) hereof. "Fifth Supplemental Indenture" has the meaning set forth in the introductory paragraph hereof. "Global Security" means a Security that evidences all or part of the Securities of any series and bears the legend set forth in the Form of IQ Note as Exhibit A hereto. "Holder," as used in this Fifth Supplemental Indenture, means the Person in whose name an IQ Note is registered in the Securities Registry. "Indenture" has the meaning set forth in the Recitals hereof. "Initial Period" has the meaning set forth in Section 5.02(a) hereof. "Insurance Agreement" means the Insurance Agreement, dated as of May 9, 2002, between the Company and the Insurer, relating to the IQ Notes and providing for the issuance of the Policy. "Insurance Event of Default" means an "event of default" under the Insurance Agreement, as such term is used and defined therein. "Insurance Trustee" means The Bank of New York, or any successor thereto, as the Insurance Trustee under the Policy. "Insurer" means Ambac Assurance Corporation, a Wisconsin-domiciled stock insurance company. "Interest Payment Dates" means March 1, June 1, September 1 and December 1 of each year, commencing on September 1, 2002. "IQ Notes" has the meaning set forth in Section 2.01 hereof. "Maturity Date" means, with respect to an IQ Note, the date on which the principal of such IQ Note becomes due and payable as therein or herein provided, whether at Stated Maturity or by declaration of acceleration, upon redemption by the Company as referred to in Article Four hereof, upon redemption as referred to in Article Five hereof, or otherwise. "Original Issue Date" means May 9, 2002. "Participant(s)" has the meaning set forth in Section 5.01 hereof. "Policy" means the financial guaranty insurance policy (Policy No. 19461BE) issued by the Insurer pursuant to the Insurance Agreement with respect to insuring the payment due for principal of and interest on the IQ Notes as provided in such policy. "Redemption Date" has the meaning set forth in Section 4.01 hereof. 3 "Redemption Price" has the meaning set forth in Section 4.02 hereof. "Redemption Request" has the meaning set forth in Section 5.02(c) hereof. "Regular Record Date" means, with respect to each Interest Payment Date, the close of business on the fifteenth calendar day of the month immediately preceding the month in which such Interest Payment Date occurs. "Representative" has the meaning set forth in Section 5.02(c) hereof. "Specimen IQ Note" has the meaning set forth in Section 2.08 hereof. "Stated Maturity" has the meaning set forth in Section 2.03 hereof. "Subsequent Period" has the meaning set forth in Section 5.02(a) hereof. "U.S. Government Obligation" has the meaning set forth in Section 6.04(a) hereof. ARTICLE TWO ESTABLISHMENT OF 6.05% INSURED QUARTERLY NOTES Section 2.01. Title of the Securities. The title of the Securities established by this Fifth Supplemental Indenture shall be "6.05% Insured Quarterly Notes due June 1, 2012" of the Company (the "IQ Notes"). Section 2.02. Limitation on Aggregate Principal Amount. The aggregate principal amount of the IQ Notes shall be limited to $50,000,000; provided, however, that the authorized aggregate principal amount may in the future be increased pursuant to the provisions of the Indenture. Section 2.03. Stated Maturity. The IQ Notes shall mature and the principal amount thereof shall be due and payable, together with all accrued and unpaid interest thereon, on June 1, 2012 (the "Stated Maturity"). Section 2.04. Interest and Interest Rates. (a) Each IQ Note shall bear interest at the rate of 6.05% per annum, from and including the immediately preceding Interest Payment Date to which interest has been paid or duly provided for (or from, and including, the Original Issue Date if no interest has been paid or duly provided for), to, but excluding, the Maturity Date. The initial date on which interest will be paid for the IQ Notes will be September 1, 2002 and the payment on such date will include all accrued interest from the Original Issue Date. (b) The amount of interest payable for any period shall be computed on the basis of a 360-day year of twelve 30-day months. The amount of interest payable for any partial period shall be computed on the basis of a 360-day year of twelve 30-day months 4 and the days elapsed in any partial month. In the event that any date on which interest is payable on an IQ Note is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) with the same force and effect as if made on the date the payment was originally payable. (c) The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Persons in whose names the IQ Notes are registered at the close of business on the applicable Regular Record Date, except that interest payable on the Maturity Date as provided herein shall be paid to the Holder to whom principal is payable in accordance with Section 2.05 hereof. Any such interest not so punctually paid or duly provided for ("Defaulted Interest") shall forthwith cease to be payable to the Holder on such Regular Record Date and may be paid by the Company, at its election in each case (i) in accordance with the provisions of Section 307(1) of the Original Indenture to the Persons in whose name such IQ Notes are registered at the close of business on a Special Record Date or (ii) be paid in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system, if any, on which the IQ Notes may be listed or traded, and upon such notice as may be required by such exchange or quotation system, if, after notice is given by the Company to the Trustee of the proposed payment pursuant to this clause, such payment shall be deemed practicable by the Trustee, all as more fully provided in the Indenture. Section 2.05. Place and Manner of Payment of Principal and Interest. (a) The Trustee shall initially serve as the Paying Agent for the IQ Notes. Payment of the principal of and any interest on the IQ Notes due on the Maturity Date shall be made in immediately available funds in such coin and currency of the United States of America as at the time of payment is legal tender for payment of public and private debt upon presentation and surrender of the applicable IQ Note at the office or agency maintained by the Company for that purpose, initially the Corporate Trust Office of the Trustee, or at such other paying agency as the Company may determine; provided, however, that if the Maturity Date falls on or after an Interest Payment Date then the Holders presenting and surrendering IQ Notes on such Maturity Date will only be entitled to interest accruing on or after such Interest Payment Date. (b) Payment of interest due on any Interest Payment Date other than on the Maturity Date will be made at the Corporate Trust Office of the Trustee or, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer of immediately available funds at such place and to such account at a banking institution in the United States as may be designated in wire transfer instructions received in writing by the Trustee at least fifteen (15) days prior to such Interest Payment Date. Any such wire transfer instructions received by the Trustee shall remain in effect until revoked by such Holder. Section 2.06. Place of Registration or Exchange; Notices and Demands with Respect to IQ Notes. The place where the Holders of the IQ Notes may present the IQ Notes for registration 5 of transfer or exchange and may make notices and demands to or upon the Company in respect of the IQ Notes shall be the Corporate Trust Office of the Trustee. Section 2.07. Sinking Fund Obligations. The IQ Notes will not be subject to any sinking fund, but may be redeemable as and to the extent provided in Article Four of this Fifth Supplemental Indenture. Section 2.08. Form of Securities. The IQ Notes will be issuable only in fully registered form, without coupons. The IQ Notes shall be issuable in whole or in part in the form of one or more Global Securities registered in the name of the Depositary or its nominee. Global Securities shall not be deemed to be temporary Securities in global form for purposes of Section 304 of the Original Indenture. Beneficial Owners of interests in Global Securities representing the IQ Notes will not be considered the Holder thereof for any purpose of the Indenture. Except as may otherwise be provided in an Officers' Certificate or Company Order subsequently delivered to the Trustee, the IQ Notes will be issuable in denominations of $1,000 or any amount in excess thereof that is an integral multiple of $1,000. The IQ Notes shall be substantially in the form attached as Exhibit A hereto (the "Specimen IQ Note"). Section 2.09. Global Securities. (a) The IQ Notes shall be issuable in whole or in part in the form of one or more Global Securities. The Global Securities shall be deposited with, or on behalf of, The Depository Trust Company, New York, New York, which shall act initially as Depositary with respect to the IQ Notes, or any other duly appointed depositary (the "Depositary"). The IQ Notes shall be issued only as fully registered securities in the name of the Depositary's nominee, Cede & Co. In addition to any other legend permitted pursuant to the provisions of the Indenture, each Global Security shall bear legends in substantially the following form: "THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) OR OTHER DULY APPOINTED DEPOSITORY (THE "DEPOSITARY"). UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR IQ NOTES IN CERTIFICATED FORM, THIS IQ NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY OR OTHER DULY APPOINTED DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY." 6 "Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation, to the issuer hereof or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of The Depository Trust Company (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of The Depository Trust Company), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein." (b) Unless and until it is exchanged in whole or in part for one or more IQ Notes in certificated form (each a "Certificated Note"), a Global Security representing all or a portion of the IQ Notes may not be transferred except as a whole (i) by the Depositary to a nominee of such Depositary, (ii) by a nominee of such Depositary to such Depositary or another nominee of such Depositary or (iii) by such Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. Certificated Notes may be presented for registration of transfer or exchange at the office or agency provided for in the Indenture, as supplemented and amended. (c) If at any time the Depositary notifies the Company that it is unwilling or unable to continue as Depositary or if at any time the Depositary shall no longer be a clearing agency registered under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, the Company shall appoint a successor Depositary. If a successor Depositary is not appointed by the Company within sixty (60) days after the Company receives such notice or becomes aware of such condition, the Company shall execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of Certificated Notes, shall authenticate and deliver Certificated Notes in an aggregate principal amount equal to the principal amount of the Global Security or IQ Notes held by the Depositary in exchange therefor. (d) The Company may at any time and in its sole discretion determine that all or any portion, in authorized denominations, of the IQ Notes issued in the form of one or more Global Securities shall no longer be represented by such Global Security or IQ Notes. In such event, the Company shall execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of Certificated Notes, shall authenticate and deliver Certificated Notes in an aggregate principal amount equal to the principal amount of such Global Security or IQ Notes in exchange therefor. (e) Except as may be otherwise provided in an Officers' Certificate or Company Order subsequently delivered to the Trustee and except as specifically provided in Section 2.09(c) or 2.09(d) hereof, interests in the IQ Notes represented by a Global Security will not be exchangeable for and will otherwise not be issuable in the form of Certificated Notes. Upon the occurrence in respect of any Global Security of any one or more of the conditions specified in Section 2.09(c) or 2.09(d) hereof or as may otherwise be provided in an Officers' Certificate or Company Order subsequently delivered to the Trustee, such Global Security shall be cancelled by the Trustee and Certificated Notes issued in exchange for a Global Security shall be registered in such names and in such 7 authorized denominations as the Depositary for such Global Security, pursuant to instructions from its direct or indirect Participants or otherwise, shall instruct the Trustee. Unless otherwise specified in such instructions, the Trustee shall deliver such Certificated Notes to the Persons in which names such Certificated Notes are so registered. If the Certificated Notes are so delivered, the Company may make such changes to the form of such IQ Notes as are necessary or appropriate to allow for the issuance of such Certificated Notes. Notwithstanding any other provision of the Indenture, unless otherwise provided in an Officers' Certificate or Company Order subsequently delivered to the Trustee, any IQ Note authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, any Global Security shall also be a Global Security and shall bear the legends specified in Section 2.09(a) hereof, except for any transfer of a Global Security pursuant to this Section 2.09. Section 2.10. Security Registrar. The Trustee shall initially serve as the Security Registrar for the IQ Notes. Section 2.11. Additional Events of Default. The occurrence and continuance of an Insurance Event of Default shall also constitute an Event of Default with respect to the IQ Notes. If the Insurer waives the Insurance Event of Default or if such Insurance Event of Default is cured, then such Insurance Event of Default shall not constitute an Event of Default under the Indenture. Section 2.12. Transfer. No service charge will be made for the registration of transfer or exchange of IQ Notes; provided, however, that the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange. The Company shall not be required (a) to issue, register the transfer of or exchange any IQ Notes except to the Insurer during a period beginning at the opening of business fifteen (15) days before the day of the mailing of a notice pursuant to Section 1104 of the Original Indenture identifying the certificate numbers of the IQ Notes to be called for redemption, and ending at the close of business on the day of the mailing, or (b) to register the transfer of or exchange any IQ Notes theretofore selected for redemption in whole or in part, except the unredeemed portion of any IQ Note redeemed in part. ARTICLE THREE FINANCIAL GUARANTY INSURANCE PROVISIONS Section 3.01. Consent of Insurer in Addition to Holder Consent. Unless otherwise provided herein, the Insurer's consent shall be required, in addition to any consent of the Holders, if any, for the following purposes: (1) execution and delivery of any supplemental indenture which effects an amendment, modification or change to the IQ Notes or any amendment, supplement or change to or modification to the Insurer's rights hereunder; (2) removal of the Trustee and selection and appointment of any successor trustee; and (3) initiation or approval of any action that is not described in clause (1) or (2) above but which requires the consent of the Holders of the IQ Notes under the Indenture. 8 Section 3.02. Insurer Enforcement of Holder Rights and Remedies. The Insurer shall be entitled (i) to control and direct the enforcement of all rights and remedies granted to the Holders of IQ Notes (excluding any such rights and remedies granted pursuant to Article Five hereof) or to the Trustee for the benefit of such Holders under the Indenture, including, without limitation, (x) the right to accelerate the principal of such IQ Notes as provided in Section 3.03 below, and (y) the right to rescind and annul any such declaration of acceleration and (ii) to approve on behalf of the Holders any waiver of a past default as provided under Section 513 of the Original Indenture. Section 3.03. Acceleration Rights. Upon the occurrence and continuance of an Event of Default with respect to the IQ Notes, the Trustee may, with the consent of the Insurer, and shall, at the direction of the Insurer or not less than 25% of the Holders with the consent of the Insurer, by written notice to the Company and the Insurer, declare the principal of the IQ Notes to be immediately due and payable, whereupon that portion of the principal of the IQ Notes thereby coming due and the interest thereon accrued to the date of payment shall, without further action, become and be immediately due and payable. Section 3.04. Notice. The Company shall furnish to the Insurer (to the attention of the Surveillance Department, unless otherwise indicated): (a) as soon as practicable after the filing with the Securities and Exchange Commission thereof, a copy of any financial statement of the Company and a copy of any audit and annual report of the Company; (b) such additional information as the Insurer may reasonably request; and (c) a copy of any notice to be given to the Holders of the IQ Notes, including, without limitation, notice of any redemption of or defeasance of the IQ Notes; and to the attention of the General Counsel's Office; (a) notice of any failure of the Company to provide relevant notices or certificates relative to the IQ Notes; and (b) notwithstanding any other provision herein, notice if at any time there are insufficient moneys to make any payments of principal and/or interest as required and immediately upon the occurrence of any Event of Default under the IQ Notes. Section 3.05. Disclosure and Access. The Company will permit the Insurer to discuss the affairs, finances and accounts of the Company with appropriate officers of the Company at any reasonable time. In addition, the Trustee will permit the Insurer to have access to and to make copies of all books and records relating to the IQ Notes at any reasonable time. The Insurer will keep all such information confidential and will use such information solely for purposes of monitoring its responsibilities with respect to the IQ Notes. Section 3.06. Policy Payment Procedures. The Company and the Trustee agree to comply with the following: 9 (a) At least one (1) Business Day prior to each Interest Payment Date or the Stated Maturity, the Trustee will determine whether it holds or will hold on the applicable Interest Payment Date sufficient funds for the payment of the principal of and/or interest on the IQ Notes due on such Interest Payment Date or the Stated Maturity, as the case may be. If the Trustee determines that there will be insufficient funds available, the Trustee shall so notify the Insurer. Such notice shall specify the amount of the anticipated deficiency, the IQ Notes to which such deficiency is applicable and whether such deficiency will be as to principal or interest, or both. If the Trustee has so notified the Insurer at least one (1) Business Day prior to the relevant Interest Payment Date or the Stated Maturity, the Insurer will make payments of principal and/or interest due on the relevant IQ Notes on or before the first (1st) Business Day next following the date on which the Insurer shall have received such notice of nonpayment from the Trustee. (b) With respect to notices of nonpayment of interest and/or principal applicable to all of the IQ Notes, the Trustee shall, after giving notice to the Insurer as provided in Section 3.06(a) above, make available to the Insurer and, at the Insurer's direction, to the Insurance Trustee, the Security Register maintained by the Trustee and all records relating to the IQ Notes maintained under the Indenture. (c) The Trustee shall provide the Insurer and the Insurance Trustee with a list of Holders entitled to receive principal and/or interest payments from the Insurer under the terms of the Policy and shall make arrangements with the Insurance Trustee (i) to mail checks or drafts to the Holders entitled to receive full or partial interest payments from the Insurer and (ii) to pay principal upon IQ Notes surrendered to the Insurance Trustee by the Holders entitled to receive full or partial principal payments from the Insurer. (d) The Trustee shall, at the time it provides notice to the Insurer pursuant to Section 3.06(a) above, notify the Holders entitled to receive the payment of principal and/or interest thereon from the Insurer (i) as to the fact of such entitlement, (ii) that the Insurer will remit to them all or a part of the interest payments due for payment upon proof of Holder entitlement to such interest payments and delivery to the Insurance Trustee, in form reasonably satisfactory to the Insurance Trustee, of an appropriate assignment of the Holder's right to such payments, (iii) that in order to receive full payment of principal from the Insurer, they must surrender their IQ Notes (along with an appropriate instrument of assignment in form reasonably satisfactory to the Insurance Trustee to permit ownership of such IQ Notes to be registered in the name of the Insurer) for payment to the Insurance Trustee, and not the Trustee, and (iv) that in order to receive partial payment of principal from the Insurer, they must surrender their IQ Notes for payment thereon first to the Trustee, who shall note on such IQ Notes the portion of the principal paid by the Trustee and then, along with an appropriate instrument of assignment in form reasonably satisfactory to the Insurance Trustee, to the Insurance Trustee, which will then pay the unpaid portion of principal. (e) In the event that the Trustee has notice that any payment of principal of or interest on an IQ Note which has become Due for Payment (as defined in the Policy) and which is made to a Holder by or on behalf of the Company has been deemed a 10 preferential transfer and theretofore recovered from its Holder owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order of a court having competent jurisdiction, the Trustee shall, at the time the Insurer is notified pursuant to Section 3.06(a) above, notify all Holders that in the event that any Holder's payment is so recovered, such Holder will be entitled to payment from the Insurer to the extent of such recovery if sufficient funds are not otherwise available, and the Trustee shall furnish to the Insurer its records evidencing the payments of principal of and interest on the IQ Notes which have been made by the Trustee and subsequently recovered from Holders and the dates on which such payments were made. (f) In addition to those rights granted the Insurer under this Fifth Supplemental Indenture, the Insurer shall, to the extent it makes payment of principal of or interest on IQ Notes, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Policy, and to evidence such subrogation (i) in the case of subrogation as to claims for past due interest, the Trustee shall note the Insurer's rights as subrogee on the Security Register upon receipt from the Insurer of proof of the payment of interest thereon to the Holders, and (ii) in the case of subrogation as to claims for past due principal, the Trustee shall note the Insurer's rights as subrogee on the Security Register upon surrender of the IQ Notes by the Holders thereof together with proof of the payment of principal thereof. Section 3.07. Application of Term "Outstanding" to IQ Notes. Notwithstanding Article Six hereof or anything herein to the contrary, in the event that the principal and/or interest due on the IQ Notes shall be paid by the Insurer pursuant to the Policy, the IQ Notes shall remain Outstanding for all purposes of the Indenture, as supplemented and modified, not be defeased or otherwise satisfied and not be considered paid by the Company, and the assignment and pledge of the Indenture, and all covenants, agreements and other obligations of the Company to the Holders shall continue to exist and shall run to the benefit of the Insurer, and the Insurer shall be subrogated to the rights of such Holders to the extent of each such payment. Section 3.08. Insurer as Third Party Beneficiary. To the extent that this Fifth Supplemental Indenture confers upon or gives or grants to the Insurer any right, remedy or claim under or by reason of this Fifth Supplemental Indenture, the Insurer is hereby explicitly recognized as being a third-party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder. Section 3.09. Special Rules Regarding Trustee. (a) The Trustee may be removed pursuant to Section 610 of the Original Indenture only with the consent of the Insurer, which consent shall not be unreasonably withheld. (b) The Insurer shall receive prior written notice from the Company of the resignation of any Trustee. 11 (c) Every successor trustee with respect to the IQ Notes appointed pursuant to Section 610 of the Original Indenture shall be a trust company or bank in good standing having a reported capital and surplus of not less than $75,000,000, and otherwise meeting the eligibility requirements set forth in Section 310 of the Trust Indenture Act of 1939, as amended. Any such successor Trustee shall be reasonably acceptable to the Insurer. Any successor Paying Agent, if applicable, shall not be appointed unless the Insurer approves such successor in writing, such approval not to be unreasonably withheld. Notwithstanding any other provision of the Indenture, if a successor Trustee with respect to the IQ Notes has not been accepted by the Insurer within thirty (30) days after a written notice of removal or resignation has been delivered to the Company, the Trustee may petition a court of competent jurisdiction at the expense of the Company to appoint a successor trustee with respect to the IQ Notes. (d) Notwithstanding any other provision of this Fifth Supplemental Indenture, in determining whether the rights of the Holders will be adversely affected by any action taken pursuant to the terms and provisions of this Fifth Supplemental Indenture, the Trustee (or Paying Agent) shall consider the effect on such Holders as if there were no Policy with respect to such series. Section 3.10. Concerning the Financial Guaranty Provisions. The provisions of this Article Three shall apply to the IQ Notes notwithstanding anything in the Indenture to the contrary, but only so long as the Policy is in full force and effect and the Insurer is not in default thereunder. Section 3.11. Payment Certification. Upon the making of timely payments by the Company of the premium for the Policy in respect of the period from and after June 1, 2004, the Company shall, within five (5) days of making any such payment, certify to the Trustee that such payment has been made. ARTICLE FOUR OPTIONAL REDEMPTION OF THE IQ NOTES Section 4.01. Redemption Date. The Company shall have the right to redeem the IQ Notes, in whole or in part, without premium, from time to time, on any date (each such date being hereinafter referred to as a "Redemption Date") that is on or after June 1, 2004. The redeemed IQ Notes will cease to bear interest as of the Redemption Date unless the Company has not punctually paid, or duly provided for, any interest on the Redemption Date. If such interest as is due remains outstanding on the Redemption Date, the principal amount of the IQ Notes so called for redemption will continue to bear interest at the rate indicated on the face of the IQ Note until paid. Section 4.02. Redemption Price. The Company shall have the right to redeem the IQ Notes, in whole or in part, without premium, at a price equal to 100% of the principal amount thereof to be redeemed plus accrued and unpaid interest on the principal amount redeemed, if any, to, but excluding, the Redemption Date (the "Redemption Price"). 12 Section 4.03. Partial Redemption. If the IQ Notes are redeemed in part pursuant to this Article Four, the IQ Notes shall be redeemed pro rata or by lot or by any other method that the Trustee deems fair and appropriate. Such partially redeemed IQ Notes shall be surrendered at any office or agency of the Company maintained for that purpose pursuant to Section 1002 of the Original Indenture, initially the Corporate Trust Office of the Trustee, with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his or her attorney duly authorized in writing, and the Company shall execute and the Trustee shall authenticate and deliver to the Holder, without charge, a new Registered Security of authorized denominations for the principal amount for the unredeemed portion pursuant to Section 1107 of the Original Indenture. Section 4.04. Notice of Optional Redemption. If the Company elects to exercise its right to redeem all or some of the IQ Notes pursuant to this Article Four, the Company or, at the Company's request, the Trustee, shall mail a written notice of such redemption to each Holder of any IQ Note that is to be redeemed not less than thirty (30) days nor more than sixty (60) days prior to the Redemption Date. Section 4.05. No Limitation on Purchase of IQ Notes by the Company. Subject to the foregoing and to applicable law (including, without limitation, United States federal securities laws), the Company and its affiliates may, at any time and from time to time, purchase outstanding IQ Notes by tender, in the open market or by private agreement. ARTICLE FIVE RIGHT OF REDEMPTION UPON DEATH OF A BENEFICIAL OWNER Section 5.01. Beneficial Owner. For purposes of this Article Five, a "Beneficial Owner" means the Person who has the right to sell, transfer or otherwise dispose of an interest in an IQ Note and the right to receive the proceeds therefrom, as well as the interest and principal payable to the Holder thereof. In general, a determination of beneficial ownership in the IQ Notes will be subject to the rules, regulations and procedures governing the Depositary and institutions that have accounts with the Depositary or a nominee thereof ("Participants"). Section 5.02. Optional Redemption Upon Death of Beneficial Owner. (a) Unless the IQ Notes have been declared due and payable prior to the Stated Maturity by reason of an Event of Default or have been previously redeemed or otherwise repaid, the Representative (as hereinafter defined) of a deceased Beneficial Owner of IQ Notes has the right to request redemption of all or part of his or her interest, expressed in integral multiples of $1,000 principal amount, in the IQ Notes for payment prior to the Stated Maturity, and the Company will redeem the same, subject to the limitations that the Company will not be obligated to redeem, during the period from the Original Issue Date through and including June 1, 2003 (the "Initial Period"), and during any twelve-month period which ends on and includes each June 1 thereafter (each such twelve-month period being hereinafter referred to as a "Subsequent Period"), (i) on behalf of a deceased Beneficial Owner, any interest in the IQ Notes which exceeds the 13 principal amount of $25,000 or (ii) interests in the IQ Notes in an aggregate principal amount exceeding $1,000,000 for all representatives requesting redemption upon the death of Beneficial Owners. (b) The Company may, at its sole discretion, redeem interests of any or all deceased Beneficial Owners in excess of the $25,000 limitation or the aggregate $1,000,000 limitation in the Initial Period or in any Subsequent Period. If the Company chooses to redeem interests of: (i) any deceased Beneficial Owner in excess of the $25,000 limitation, such redemption, to the extent it exceeds the $25,000 limitation for any deceased Beneficial Owner, will not be included in the computation of the $1,000,000 aggregate limitation for the IQ Notes for the Initial Period or the applicable Subsequent Period, as the case may be, or for any succeeding Subsequent Period; and/or (ii) one or more deceased Beneficial Owners in excess of the $1,000,000 aggregate limitation, such redemption, to the extent it exceeds the $1,000,000 aggregate limitation, will not reduce the $1,000,000 aggregate limitation for any Subsequent Period. Upon any determination by the Company to redeem IQ Notes in excess of the $25,000 limitation or the $1,000,000 aggregate limitation, such IQ Notes will be redeemed in the order of the receipt of Redemption Requests (as hereinafter defined) by the Trustee. (c) A Beneficial Owner's personal representative or other Person authorized to represent the estate of a deceased Beneficial Owner of an interest in an IQ Note or a surviving joint tenant(s) or tenant(s) by the entirety who has the right to sell, transfer or otherwise dispose of an interest in an IQ Note and who has the right to receive the proceeds from an IQ Note, as well as the interest and principal payable to the Holder (a "Representative"), may initiate a request for redemption at any time and in any principal amount in integral multiples of $1,000 (a "Redemption Request"). A Redemption Request of an interest in the IQ Notes shall be made by delivering a request to (i) the Depositary, in the case of a Participant who is the Beneficial Owner of such interest, or (ii) to the Participant, through whom the deceased Beneficial Owner owned such interest, in form satisfactory to the Participant, together with (i) evidence of the death of the Beneficial Owner, (ii) evidence of the authority of the Representative satisfactory to the Participant, and (iii) any waivers, notices or certificates as may be required under applicable state or federal law and such other evidence of the right to such redemption as the Participant shall require. The request shall specify the principal amount of the interest in the IQ Notes to be redeemed, which amount shall be in integral multiples of $1,000. Subject to the rules, regulations, procedures or other arrangements of or applicable to the Depositary, the Participant will then deliver to the Depositary a Redemption Request substantially in the form attached hereto as Exhibit B; on receipt of such a Redemption Request, it is the customary procedure of the Depositary to forward such Redemption Request to the Trustee. 14 The Trustee shall maintain records with respect to the Redemption Requests it receives, including the date of receipt, the name of the Participant filing the Redemption Request and the status of each Redemption Request with respect to the $25,000 limitation and the $1,000,000 aggregate limitation. The Trustee shall immediately file with the Company each Redemption Request it receives, together with the information regarding the eligibility of the Redemption Request with respect to the $25,000 limitation and the $1,000,000 aggregate limitation. The Company, the Depositary and the Trustee may conclusively assume, without independent investigation, that the statements contained in each Redemption Request are true and correct and shall have no responsibility for reviewing any documents submitted to the Participant by the Representative or for determining whether the applicable decedent is, in fact, the Beneficial Owner of the interest in the IQ Notes to be redeemed or is, in fact, deceased and for determining whether the Representative is duly authorized to request redemption on behalf of the applicable Beneficial Owner. (d) Subject to the $25,000 limitation and the $1,000,000 aggregate limitation, the Company shall, after the death of any Beneficial Owner, redeem the interest of such Beneficial Owner in the IQ Notes on a date that is within sixty (60) days following the receipt by the Company of a Redemption Request from the Trustee (the "Estate Redemption Date"). If the Redemption Requests exceed the aggregate principal amount of interest in IQ Notes required to be redeemed during the Initial Period or during any Subsequent Period, then the excess Redemption Requests will be applied in the order received by the Trustee to successive Subsequent Periods, regardless of the number of Subsequent Periods required to redeem such interests. In addition, the Company may, at any time, notify the Trustee that the Company shall redeem all or any lesser amount of IQ Notes for which Redemption Requests have been received but that are not then eligible for redemption by reason of the $25,000 limitation or the $1,000,000 aggregate limitation. Such IQ Notes will be redeemed on a date not less than thirty (30) nor more than sixty (60) days after the date such notice by the Company is received by the Trustee, and the Company will redeem such interest in the IQ Notes in the order of receipt of Redemption Requests by the Trustee. (e) The price to be paid by the Company for interests in the IQ Notes to be redeemed pursuant to a Redemption Request from a deceased Beneficial Owner's Representative is 100% of the principal amount thereof plus any accrued but unpaid interest on the amount of IQ Notes to be redeemed to, but excluding, the Estate Redemption Date. Subject to arrangements with the Depositary, payment for interests in the IQ Notes to be redeemed shall be made to the Depositary in the aggregate principal amount specified in the Redemption Requests submitted to the Trustee by the Depositary that are to be fulfilled in connection with such payment upon presentation of the IQ Notes to the Trustee for redemption. Any acquisition of IQ Notes by the Company other than by redemption at the option of any Representative of a deceased Beneficial Owner pursuant to this Article Five shall not be included in the computation of either the $25,000 limitation or the applicable $1,000,000 aggregate limitation for the Initial Period or for any Subsequent Period. 15 (f) For purposes of this Article Five, an interest in an IQ Note held in tenancy by the entirety, joint tenancy or by tenants in common will be deemed to be held by a single Beneficial Owner and the death of a tenant by the entirety, joint tenant or tenant in common will be deemed the death of a Beneficial Owner. The death of a Person, who, during his or her lifetime, was entitled to substantially all of the rights of a Beneficial Owner of an interest in the IQ Notes will be deemed the death of the Beneficial Owner, regardless of the recordation of such interest on the records of the Participant, if such rights can be established to the satisfaction of the Participant. Such interests shall be deemed to exist in typical cases of nominee ownership, ownership under the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act, community property or other similar joint ownership arrangements, including individual retirement accounts or Keogh [H.R. 10] plans maintained solely by or for the decedent or by or for the decedent and any spouse, and trust and certain other arrangements where one Person has substantially all of the rights of a Beneficial Owner during such Person's lifetime. (g) In the case of any Redemption Request which is presented pursuant to this Article Five and which has not been fulfilled at the time the Company gives notice of its election to redeem IQ Notes pursuant to Article Four hereof, such interest or portion thereof shall not be subject to redemption pursuant to such Article Four, but shall remain subject to redemption pursuant to this Article Five. (h) Subject to the provisions of subsection (g) hereof, any Redemption Request may be withdrawn by the Person presenting the same upon delivery of a written request for such withdrawal which such Person causes to be given by the Participant on behalf of such Persons to the Depositary and by the Depositary (subject, in each case, to the rules, regulations or procedures of or applicable to the Participant or the Depositary) to the Trustee and by the Trustee to the Company not less than thirty (30) days prior to the expected date of payment of the Redemption Price relating to the Redemption Request. (i) During any time in which the IQ Notes are not represented by a Global Security and are issued in definitive form, all references in this Article Five to Participants and the Depositary, including the rules, regulations and procedures of or applicable to the Participants or the Depositary, will be deemed deleted, all determinations described as being made by the Participants in this Article Five shall be made by the Company (including, without limitation, determining whether the applicable decedent is in fact the Beneficial Owner of the interest in the IQ Notes to be redeemed or is in fact deceased and whether the Representative is duly authorized to request redemption on behalf of the applicable Beneficial Owner), and all Redemption Requests, to be effective, must be (i) delivered by the Representative to the Trustee, with a copy to the Company, (ii) be in the form of a Redemption Request (with appropriate changes to reflect the fact that the Redemption Request is being executed by a Representative) and (iii) be accompanied by the IQ Note that is the subject of the Redemption Request, in addition to all documents that are otherwise required to accompany a Redemption Request. 16 ARTICLE SIX DEFEASANCE AND COVENANT DEFEASANCE Section 6.01. Election by Company. Subject to Section 3.07, the Company may elect, at its option at any time, to have Section 6.02 or 6.03 hereof applied to any or all of the IQ Notes, upon compliance with the conditions set forth below in this Article Six. Any such election shall be evidenced by a Board Resolution or in another manner contemplated by the Indenture, as supplemented hereby, with respect to such IQ Notes. Section 6.02. Defeasance. Upon the Company's exercise of its option to have this Section 6.02 applied to any IQ Notes, the Company shall be deemed to have been discharged from its obligations with respect to such IQ Notes as provided in this Article Six on and after the date the conditions set forth in Section 6.04 hereof are satisfied (hereinafter called "Defeasance"). For this purpose, such Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by such IQ Notes and to have satisfied all its other obligations under such IQ Notes and the Indenture, insofar as such IQ Notes are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), subject to the following, which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of such IQ Notes to receive, solely from the trust fund described in Section 6.04 hereof and as more fully set forth in such section, payments in respect of the principal of and interest on such IQ Notes when payments are due, (b) the Company's obligations with respect to such IQ Notes under Sections 304, 305, 306, 1002 and 1003 of the Original Indenture, (c) the rights, powers, trusts, duties and immunities of the Trustee under the Indenture and (d) this Article Six. Subject to compliance with this Article Six the Company may exercise its option to have this Section 6.02 applied to any IQ Notes notwithstanding the prior exercise of its option to have Section 6.03 hereof applied to such IQ Notes. Section 6.03. Covenant Defeasance. Upon the Company's exercise of its option to have this Section 6.03 applied to any IQ Notes, (a) the Company shall be released from its obligations under Article Eight of the Original Indenture, Sections 1007 and 1009 of the Original Indenture and any covenants for the benefit of the Holders of such IQ Notes provided pursuant to Sections 301(17), Section 901(2) and 901(6) of the Original Indenture and (b) the occurrence of any event specified in Sections 501(4) (with respect to Article Eight of the Original Indenture, Sections 1007, 1009 and/or to any such covenants provided pursuant to Sections 301(17), 901(2) or 901(6)), and 501(8) of the Original Indenture shall be deemed not to be or result in an Event of Default, in each case with respect to such IQ Notes as provided in this Section 6.03 on and after the date the conditions set forth in Section 6.04 hereof are satisfied (hereinafter called "Covenant Defeasance"). For this purpose, such Covenant Defeasance means that, with respect to such IQ Notes, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified section (to the extent so specified in the case of Section 501(4) of the Original Indenture), whether directly or indirectly by reason of any reference elsewhere in the Indenture or herein to any such section or by reason of any reference in any such section to any other provision in the Indenture, herein or in any other document, but the remainder of the Indenture, as supplemented hereby, and such IQ Notes shall be unaffected thereby. 17 Section 6.04. Conditions for Defeasance or Covenant Defeasance of IQ Notes. The following shall be the conditions to the application of Section 6.02 or Section 6.03 hereof to any IQ Notes: (a) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee that satisfies the requirements contemplated by Section 609 of the Original Indenture and agrees to comply with the provisions of this Article Six applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefits of the Holders of such IQ Notes, (1) money in an amount, or (2) U.S. Government Obligations (as defined below) which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than 10:00 a.m., New York City time, on the due date of any payment, money in an amount, or (3) a combination thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of and interest on such IQ Notes on the Stated Maturity, in accordance with the terms of the Indenture, and such IQ Notes. As used herein, "U.S. Government Obligation" means (x) any security which is (i) a direct obligation of the United States of America for the payment of which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any U.S. Government Obligation which is specified in Clause (x) above and held by such bank for the account of the Holder of such depository receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the Holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depository receipt. (b) In the event of an election to have Section 6.02 hereof apply to any IQ Notes, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (1) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (2) since the date of this Fifth Supplemental Indenture, there has been a change in the applicable federal income tax law, in either case (1) or (2) to the effect that, and based thereon such opinion shall confirm that, the Holders of such IQ Notes will not recognize gain or loss for federal income tax purposes as a result of the deposit, Defeasance and discharge to be effected with respect to such IQ Notes and will be subject to federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge were not to occur. 18 (c) In the event of an election to have Section 6.03 hereof apply to any IQ Notes, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such IQ Notes will not recognize gain or loss for federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with respect to such IQ Notes and will be subject to federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur. (d) The Company shall have delivered to the Trustee an Officers' Certificate to the effect that such IQ Notes, if then listed on any securities exchange, will be delisted as a result of such deposit. (e) No event which is, or after notice or lapse of time or both would become, an Event of Default with respect to such IQ Notes shall have occurred and be continuing at the time of such deposit or, with regard to any such event specified in Sections 501(6) and (7) of the Original Indenture, at any time on or prior to the sixtieth (60th) day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such sixtieth (60th) day). (f) Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act (assuming all IQ Notes are in default within the meaning of such Act). (g) Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company is a party or by which it is bound. (h) Such Defeasance or Covenant Defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act unless such trust shall be registered under such Act or exempt from registration thereunder. (i) The Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant Defeasance have been complied with. Section 6.05. Acknowledgement of Defeasance. Subject to Section 6.07 below and after the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent referred to in Section 6.04 hereof, as the case may be, relating to the defeasance or satisfaction and discharge of the Indenture, have been complied with, the Trustee upon request of the Company shall acknowledge in writing the defeasance or the satisfaction and discharge, as the case may be, of the Indenture, and the discharge of the Company's obligations under the Indenture. Section 6.06. Trustee Obligations. Subject to the provisions of the last paragraph of Section 1003 of the Original Indenture, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee (solely for purposes of this Section and Section 6.07 hereof, the Trustee and any such other trustee are referred to 19 collectively as the "Trustee") pursuant to Section 6.04 hereof in respect of any IQ Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such IQ Notes and the Indenture, to the payment, either directly or through any such Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such IQ Notes, of all sums due and to become due thereon in respect of principal and interest, but money so held in trust need not be segregated from other funds except to the extent required by law. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 6.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of Outstanding IQ Notes. Anything in this Article Six to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 6.04 hereof with respect to any IQ Notes which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to such IQ Notes. Section 6.07. Reinstatement of IQ Note Obligations. If the Trustee or the Paying Agent is unable to apply any money in accordance with this Article Six with respect to any IQ Notes by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations under the Indenture, and such IQ Notes from which the Company has been discharged or released pursuant to Section 6.02 or 6.03 hereof shall be revived and reinstated as though no deposit had occurred pursuant to this Article Six with respect to such IQ Notes, until such time as the Trustee or Paying Agent is permitted to apply all money held in trust pursuant to Section 6.06 hereof with respect to such IQ Notes in accordance with this Article Six; provided, however, that if the Company makes any payment of principal of or interest on any such IQ Note following such reinstatement of its obligations, the Company shall be subrogated to the rights (if any) of the Holders of such IQ Notes to receive such payment from the money so held in trust. ARTICLE SEVEN MISCELLANEOUS Section 7.01. As supplemented by this Fifth Supplemental Indenture, the Indenture shall be read, taken and construed as one and the same instrument. Section 7.02. Except as expressly set forth in this Fifth Supplemental Indenture, the Trustee assumes no duties, responsibilities or liabilities by reason of this Fifth Supplemental Indenture, other than as set forth in the Indenture, as fully as if said terms and conditions were herein set forth at length. 20 Section 7.03. This Fifth Supplemental Indenture may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original; but such counterparts shall together constitute one and the same instrument. Section 7.04. This Fifth Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in such state. Section 7.05. The dating of this Fifth Supplemental Indenture as of May 1, 2002, is intended as and for the convenient identification of this Fifth Supplemental Indenture and is not intended to indicate that this Fifth Supplemental Indenture was executed and delivered on said date, this Fifth Supplemental Indenture being executed and effective on the dates of the respective acknowledgments hereto attached. 21 IN WITNESS WHEREOF, the Company has caused this Fifth Supplemental Indenture to be executed in its limited liability company name and its limited liability company seal to be hereunto affixed and attested by its duly authorized officers, all as of the date first above written. CLECO POWER LLC [SEAL] By: ------------------------------------- Dilek Samil Senior Vice President of Finance and Chief Financial Officer ATTEST: - ------------------------- Michael P. Prudhomme Secretary Signed, sealed, acknowledged and delivered by CLECO POWER LLC, in the presence of: - ------------------------- Name: - ------------------------- Name: [Signatures continued on next page.] 22 IN WITNESS WHEREOF, the Trustee has caused this Fifth Supplemental Indenture to be executed in its corporate name and attested by its duly authorized officers, all as of the date first above written. THE BANK OF NEW YORK, as Trustee By: ----------------------------- Name: Title: ATTEST: - --------------------------- Name: Title: Signed, acknowledged and delivered by THE BANK OF NEW YORK in the presence of: - --------------------------- Name: - --------------------------- Name: 23 STATE OF LOUISIANA PARISH OF ____________________ BE IT KNOWN, that on this ___ day of May, 2002, before me, the undersigned authority, duly commissioned, qualified and sworn within and for the State and Parish aforesaid, personally came and appeared: 1. Dilek Samil 2. Michael P. Prudhomme to me known to be the identical persons who executed the above and foregoing instrument, who declared and acknowledged to me, Notary, in the presence of the undersigned competent witnesses, that they are respectively (1) the Senior Vice President of Finance and Chief Financial Officer and (2) the Secretary of Cleco Power LLC (the "Company"); that the seal impressed beside their respective signatures on the foregoing Fifth Supplemental Indenture is the official seal of the Company; that the aforesaid instrument was signed and sealed by them, on behalf of the Company by authority of a resolution duly adopted by the Board of Managers of the Company on January 26, 2001; and that the above named persons acknowledge said instrument to be the free act and deed of the Company. 1. ____________________________________ Dilek Samil Senior Vice President of Finance and Chief Financial Officer 2. ____________________________________ Michael P. Prudhomme Secretary WITNESSES: _____________________________ _____________________________ ________________________________________ Notary Public 24 STATE OF NEW YORK COUNTY OF _____________ BE IT KNOWN, that on this ___ day of May, 2002, before me, the undersigned authority, duly commissioned, qualified and sworn within and for the State and County aforesaid, personally came and appeared: 1. _________________________ 2. _________________________ to me known to be the identical persons who executed the above and foregoing instrument, who declared and acknowledged to me, Notary, in the presence of the undersigned competent witnesses, that they are respectively (1) the ____________________ and (2) the ____________________ of The Bank of New York (the "Trustee"); that the aforesaid instrument was signed by them on behalf of the Trustee by authority of its By-laws; and that the above named persons acknowledge said instrument to be the free act and deed of the Trustee. 1. _________________________________ Name: Title: 2. _________________________________ Name: Title: WITNESSES: _____________________________ _____________________________ ________________________________________ Notary Public 25 EXHIBIT A FORM OF 6.05% INSURED QUARTERLY NOTE 26 [FORM OF FACE OF IQ NOTE] [If Global Security, insert -- THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) OR OTHER DULY APPOINTED DEPOSITORY (THE "DEPOSITARY"). UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR IQ NOTES IN CERTIFICATED FORM, THIS IQ NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY OR OTHER DULY APPOINTED DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation, to the issuer hereof or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of The Depository Trust Company (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of The Depository Trust Company), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.] NO. ___ CUSIP NO. 185508 AB 4 CLECO POWER LLC 6.05% INSURED QUARTERLY NOTE DUE JUNE 1, 2012 Principal Amount: $50,000,000 Regular Record Date: Fifteenth calendar day of the month immediately preceding the month in which the Interest Payment Date occurs Original Issue Date: May 9, 2002 Stated Maturity: June 1, 2012 Interest Payment Dates: March 1, June 1, September 1 and December 1, commencing September 1, 2002 Interest Rate: 6.05% per annum Authorized Denomination: $1,000 and integral multiples in excess thereof Initial Redemption Date: June 1, 2004 27 CLECO POWER LLC, a Louisiana limited liability company (the "Company", which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to ______________________________, or registered assigns, the principal sum of FIFTY MILLION DOLLARS ($50,000,000) on the Stated Maturity shown above (or upon any earlier date of redemption or acceleration of maturity) (each such date being hereinafter referred to as the "Maturity Date") and to pay interest thereon, from and including the immediately preceding Interest Payment Date to which interest has been paid or duly provided for (or from, and including, the Original Issue Date if no interest has been paid or duly provided for), to, but excluding, the Maturity Date, quarterly in arrears on each Interest Payment Date as specified above, commencing on September 1, 2002 at the rate per annum shown above until the principal hereof is paid or made available for payment and on any overdue principal and on any overdue installment of interest. Capitalized terms used herein shall have the meanings specified in the Indenture or the Fifth Supplemental Indenture (each as defined on the reverse hereof), as the case may be. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name this 6.05% Insured Quarterly Note due June 1, 2012 (this "IQ Note," and collectively, the "IQ Notes") is registered at the close of business on the applicable Regular Record Date, except that interest payable on the Maturity Date as provided herein shall be paid to the Holder to whom principal is payable in accordance with Section 2.05 of the Fifth Supplemental Indenture. Any such interest not so punctually paid or duly provided for ("Defaulted Interest") shall forthwith cease to be payable to the Holder hereof on such Regular Record Date and may be paid by the Company, at its election in each case (i) in accordance with the provisions of Section 307 (1) of the Indenture to the Person in whose name this IQ Note is registered at the close of business on a Special Record Date or (ii) be paid in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system, if any, on which the IQ Notes may be listed or traded, and upon such notice as may be required by such exchange or quotation system, if, after notice is given by the Company to the Trustee of the proposed payment pursuant to clause 2.04(c)(ii) of the Fifth Supplemental Indenture, such payment shall be deemed practicable by the Trustee, all as more fully provided in the Indenture. Interest payments on this IQ Note will include interest accrued to, but excluding, the respective Interest Payment Dates or the Maturity Date. Interest payments for this IQ Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months. The amount of interest payable for any partial period shall be computed on the basis of a 360-day year of twelve 30-day months and the days elapsed in any partial month. In the event that any date on which interest is payable on this IQ Note is not a Business Day (as defined below), then payment of the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) with the same force and effect as if made on the date the payment was originally payable. A `Business Day,' means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which commercial banks are authorized or required by law, regulation or executive order to close in The City of New York. The Trustee shall initially serve as the Paying Agent for the IQ Notes. Payment of the principal of and any interest on this IQ Note due on the Maturity Date shall be made in 28 immediately available funds in such coin and currency of the United States of America as at the time of payment is legal tender for payment of public and private debt upon presentation and surrender of this IQ Note at the office or agency maintained by the Company for that purpose, initially the Corporate Trust Office of the Trustee, or at such other paying agency as the Company may determine; provided, however, that if the Maturity Date falls on or after an Interest Payment Date then the Holder presenting and surrendering this IQ Note on such Maturity Date will only be entitled to interest accruing on or after such Interest Payment Date. Payment of interest due on any Interest Payment Date other than on the Maturity Date will be made at the Corporate Trust Office of the Trustee or, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer of immediately available funds at such place and to such account at a banking institution in the United States as may be designated in wire transfer instructions received in writing by the Trustee at least fifteen (15) days prior to such Interest Payment Date. Any such wire transfer instructions received by the Trustee shall remain in effect until revoked by such Holder. Financial Guaranty Insurance Policy No. 19461BE (the "Policy") with respect to payments due for principal of and interest on this IQ Note has been issued by Ambac Assurance Corporation (the "Insurer"). The Policy has been delivered to The Bank of New York, as the insurance trustee (the "Insurance Trustee") under said Policy, and will be held by such Insurance Trustee or any successor insurance trustee. The Policy is on file and available for inspection at the principal office of the Insurance Trustee and a copy thereof may be secured from the Insurer or the Insurance Trustee. All payments required to be made under the Policy shall be made in accordance with the provisions thereof. The owner of this IQ Note acknowledges and consents to the subrogation rights of the Insurer as more fully set forth in the Policy. Reference is hereby made to the further provisions of this IQ Note set forth on the reverse hereof, which provisions shall for all purposes have the same force and effect as if set forth on the face hereof. Unless the Certificate of Authentication hereon has been executed by the Trustee by manual signature, this IQ Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 29 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: __________ ___, 2___ CLECO POWER LLC By: ----------------------------------- Name: Title: (Seal of CLECO POWER LLC appears here) Attest: - ---------------------------------- Name: Title: CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. Dated: __________ ___, 2___ THE BANK OF NEW YORK, as Trustee By: ----------------------------------- Authorized Signatory 30 [FORM OF REVERSE OF IQ NOTE] This IQ Note is one of a duly authorized issue of IQ Notes of the Company, issued and issuable in one or more series under the Indenture, dated as of October 1, 1988 (as previously and hereby supplemented and amended, the "Indenture"), between the Company and The Bank of New York, as trustee (the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture and all indentures incidental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the IQ Notes issued thereunder and of the terms upon which said IQ Notes are, and are to be, authenticated and delivered. This IQ Note is designated on the face hereof as 6.05% Insured Quarterly Notes due June 1, 2012 (the "IQ Notes") in the aggregate principal amount of $50,000,000; provided, however, that the authorized aggregate principal amount may in the future be increased pursuant to the provisions of the Indenture. The Company shall have the right, subject to the terms and conditions of the Fifth Supplemental Indenture, dated as of May 1, 2002, between the Company and the Trustee (the "Fifth Supplemental Indenture"), to redeem this IQ Note, in whole or in part, without premium, from time to time on any date (each such date being hereinafter referred to as a "Redemption Date") that is on or after June 1, 2004 at a price equal to 100% of the principal amount to be redeemed plus accrued and unpaid interest on the principal amount redeemed, if any, to, but excluding the Redemption Date (the "Redemption Price"), on written notice given to the Holder hereof (in accordance with the provisions of the Indenture) not less than thirty (30) days nor more than sixty (60) days prior to the Redemption Date. In the event of redemption of this IQ Note in part only, a new IQ Note or IQ Notes for the unredeemed portion will be issued in the name of the Holder hereof upon the surrender hereof pursuant to the terms of Section 4.03 of the Fifth Supplemental Indenture. The IQ Notes will not have a sinking fund. Unless this IQ Note has been declared due and payable prior to the Stated Maturity by reason of an Event of Default or has been previously redeemed or otherwise repaid, the Representative (as defined below) of a deceased Beneficial Owner (as defined below) of this IQ Note has the right to request, using the form as substantially set forth as Exhibit B to the Fifth Supplemental Indenture, the redemption of all or part of his or her interest, expressed in integral multiples of $1,000 principal amount (a "Redemption Request"), in this IQ Note for payment prior to the Stated Maturity, and the Company will redeem the same, subject to the limitations that the Company will not be obligated to redeem, during the period from the Original Issue Date through and including June 1, 2003 (the "Initial Period"), and during any twelve-month period which ends on and includes each June 1 thereafter (each such twelve-month period being hereinafter referred to as a "Subsequent Period"), (i) on behalf of a deceased Beneficial Owner, any interest in the IQ Notes which exceeds the principal amount of $25,000 or (ii) interests in the IQ Notes in an aggregate principal amount exceeding $1,000,000 for all representatives requesting redemption upon the death of Beneficial Owners. The price to be paid by the Company for an interest in this IQ Note to be redeemed pursuant to a Redemption Request from 31 a deceased Beneficial Owner's Representative is 100% of the principal amount thereof plus any accrued but unpaid interest on the amount of this IQ Note to be redeemed to, but excluding, the date that is within sixty (60) days following the receipt by the Company of a Redemption Request from the Trustee (the "Estate Redemption Date"). As used herein, "Representative" means the personal representative or other Person authorized to represent the estate of a deceased Beneficial Owner of an interest in this IQ Note or a surviving joint tenant(s) or tenant(s) by the entirety who has the right to sell, transfer or otherwise dispose of an interest in this IQ Note and who has the right to receive the proceeds from this IQ Note, as well as the interest and principal payable to the Holder of this IQ Note. As used herein, a "Beneficial Owner" means the Person who has the right to sell, transfer or otherwise dispose of an interest in this IQ Note and the right to receive the proceeds herefrom, as well as the interest and principal payable to the Holder hereof. In general, a determination of beneficial ownership in the IQ Notes will be subject to the rules, regulations and procedures governing the Depositary and institutions that have accounts with the Depositary or a nominee thereof ("Participants"). If an Event of Default with respect to the IQ Notes shall occur and be continuing, the principal of this IQ Note may, and in certain cases shall, be declared due and payable in the manner, with the effect and subject to, the conditions provided in the Indenture. So long as the Insurer is not in default under the Policy, the Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to the Holders of IQ Notes or to the Trustee for the benefit of such Holders under the Indenture, other than the rights of the Representatives referred to in the preceding paragraph. No reference herein to the Indenture and no provision of this IQ Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this IQ Note at the times, place and rate, and in the coin or currency, herein prescribed. If an Event of Default shall occur and be continuing under the Indenture, the principal of the IQ Notes may be accelerated in the manner and with the effect provided in the Indenture. The Indenture contains provisions for defeasance of (i) the entire indebtedness of the IQ Notes or (ii) certain covenants and Events of Default with respect to the IQ Notes, in each case upon compliance with certain conditions set forth therein. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the IQ Notes at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Outstanding IQ Notes affected thereby and the consent of the Insurer, provided the Insurer is not in default under the Policy. Specifically, unless otherwise provided herein and so long as the Insurer is not in default under the Policy, the Insurer's consent shall be required, in addition to any consent of the Holders, if any, for any action requiring the consent of the Holders of the IQ Notes, including, but not limited to, (1) the execution and delivery of any supplemental indenture which effects an amendment, modification or change to the IQ Notes or any amendment, supplement or change to or modification to the Insurer's rights under the Fifth Supplemental Indenture and (2) the 32 removal of the Trustee and selection and appointment of any successor trustee. The Indenture also contains provisions permitting the Holders of a majority in principal amount of the Outstanding IQ Notes, on behalf of the Holders of all such IQ Notes, and with the consent of the Insurer, to waive compliance by the Company with certain provisions of the Indenture. Furthermore, provisions in the Indenture permit the Holders of a majority in principal amount of the Outstanding IQ Notes, with the consent of the Insurer, in certain instances, to waive, on behalf of all of the Holders of IQ Notes, certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this IQ Note and the Insurer shall be conclusive and binding upon such Holder and upon all future Holders of this IQ Note and other IQ Notes issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this IQ Note. Prior to due presentment of this IQ Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this IQ Note is registered as the owner hereof for all purposes, whether or not this IQ Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary, except as required by law. The IQ Notes are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Fifth Supplemental Indenture and subject to certain limitations therein and herein set forth, the transfer of this IQ Note is registrable in the Security Register upon surrender of this IQ Note for registration of transfer at the office or agency of the Company maintained for that purpose. Every IQ Note presented for registration of transfer shall (if so required by the Company or the Security Registrar) be duly endorsed, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder hereof or by his or her attorney duly authorized in writing, and thereupon one or more new IQ Notes having the same terms and provisions, of Authorized Denominations and for the same aggregate principal amount, will be issued by the Company to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange of this IQ Note, provided, however, that the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange. The Company shall not be required (i) to issue, register the transfer of or exchange any IQ Notes except to the Insurer during a period beginning at the opening of business fifteen (15) days before the day of the mailing of the notice of redemption pursuant to the Indenture identifying the certificate numbers of the IQ Notes to be called for redemption, and ending at the close of business on the day of the mailing, or (ii) to register the transfer of or exchange any IQ Notes theretofore selected for redemption in whole or in part, except the unredeemed portion of any IQ Note redeemed in part. As provided in the Fifth Supplemental Indenture and subject to certain limitations therein and herein set forth, this IQ Note is exchangeable for a like aggregate principal amount of IQ Notes of different authorized denominations but otherwise having the same terms and provisions, as requested by the Holder hereof surrendering the same. 33 Notwithstanding anything to the contrary, if (x) the Depositary notifies the Company that it is at any time unwilling or unable to continue as Depositary or if at any time the Depositary shall no longer be a clearing agency registered under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, and a successor Depositary is not appointed by the Company within 60 days after the Company receives such notice or becomes aware of such condition, or (y) the Company executes and delivers to the Trustee a Company Order to the effect that this IQ Note shall be exchangeable for certificates issued in definitive form ("Certificated Notes"), this IQ Note shall be exchangeable for Certificated Notes of like tenor and of an equal aggregate principal amount, in authorized denominations of $1,000 and integral multiples thereof. Such Certificated IQ Notes shall be registered in such name or names as the Depositary, pursuant to instructions from its direct or indirect Participants or otherwise, shall instruct the Trustee. Unless otherwise specified in such instructions, the Trustee shall deliver such Certificated Notes to the Persons in which names such Certificated Notes are so registered. If Certificated Notes are so delivered, the Company may make such changes to the form of this IQ Note as are necessary or appropriate to allow for the issuance of such Certificated Notes. THE INDENTURE AND THIS IQ NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. 34 [If not Global Security, insert -- ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this IQ Note, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT - ______ Custodian _________ (Cust) (Minor) Under Uniform Gifts to Minors Act _________________________________ (State) Additional abbreviations may also be used though not in the above list. 35 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ______________ ______________ ______________ ______________ ________________________________________________________________________________ (Please print or typewrite name and address including postal zip code of assignee) ________________________________________________________________________________ This IQ Note and all rights thereunder hereby irrevocably constituting and appointing ________________________________________________________________________________ Attorney to transfer this IQ Note on the books of the Trustee, with full power of substitution in the premises. Dated: __________________ ________________________________________ __________________ ________________________________________ Notice: The signature(s) on this Assignment must correspond with the name(s) as written upon the face of this IQ Note in every particular, without alteration or enlargement or any change whatsoever.] 36 EXHIBIT B FORM OF REDEMPTION REQUEST 37 CLECO POWER LLC 6.05% INSURED QUARTERLY NOTES DUE JUNE 1, 2012 (THE "IQ NOTES") CUSIP NO. 185508 AB 4 The undersigned, (the "Participant"), does hereby certify, pursuant to the provisions of that certain Indenture dated as of October 1, 1988, as amended, modified or supplemented from time to time (the "Indenture"), between Cleco Power LLC (as successor to Cleco Utility Group Inc.) (the "Issuer") and The Bank of New York (as successor to Bankers Trust Company), as trustee (the "Trustee"), to The Depository Trust Company (the "Depository"), to the Issuer and to the Trustee that: 1. [Name of deceased Beneficial Owner] is deceased. 2. [Name of deceased Beneficial Owner] had a $ interest in the above referenced IQ Notes. 3. [Name of Representative] is [Beneficial Owner's personal representative/other person authorized to represent the estate of the Beneficial Owner/surviving joint tenant/surviving tenant by the entirety/trustee of a trust] of [Name of deceased Beneficial Owner] and has delivered to the undersigned a request for redemption in form satisfactory to the undersigned, requesting that $ principal amount of said IQ Notes be redeemed pursuant to said Indenture. The documents accompanying such request, all of which are in proper form, are in all respects satisfactory to the undersigned and [Name of Representative] is entitled to have the IQ Notes to which this redemption request relates redeemed. 4. The Participant holds the interest in the IQ Notes with respect to which this redemption request is being made on behalf of [Name of deceased Beneficial Owner]. 5. The Participant hereby certifies that it will indemnify and hold harmless the Depository, the Trustee and the Issuer (including their respective officers, directors, agents, attorneys and employees), against all damages, loss, cost, expense (including reasonable attorneys' and accountants' fees), obligations, claims or liability incurred by the indemnified party or parties as a result of or in connection with the redemption of IQ Notes to which this redemption request relates. The Participant will, at the request of the Issuer, forward to the Issuer a copy of the documents submitted by [Name of Representative] in support of the request for redemption. IN WITNESS WHEREOF, the undersigned has executed this redemption request as of , . [PARTICIPANT NAME] By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- 38 EX-5.1 5 dex51.txt OPINION OF BAKER BOTTS, L.L.P. EXHIBIT 5.1 [Letterhead of Baker Botts L.L.P.] May 6, 2002 Cleco Power LLC 2030 Donahue Ferry Road Pineville, Louisiana 71360-5226 Ladies and Gentlemen: We have acted as counsel for Cleco Power LLC, a Louisiana limited liability company (the "Company"), in connection with its offering and sale of $50,000,000 aggregate principal amount of 6.05% Insured Quarterly Notes due June 1, 2012 (the "IQ Notes"), which offering and sale have been registered by the Company's Registration Statement on Form S-3 (Registration No. 333-52540) (the "Registration Statement"), filed by the Company with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), relating to the proposed issuance and sale from time to time of up to $200,000,000 in aggregate principal amount of the Company's unsecured debt securities. The Company will issue the IQ Notes under the Indenture, dated as of October 1, 1988, between the Company (as successor thereunder to Cleco Utility Group Inc. (formerly known as Central Louisiana Electric Company, Inc.)) and The Bank of New York (as successor thereunder to Bankers Trust Company), as supplemented and amended (the "Indenture"). In our capacity as your counsel in the connection referred to above, we have examined as a basis for the opinion hereinafter expressed (i) the Articles of Organization, Initial Report and Operating Agreement of the Company, each as amended to date, (ii) the Indenture, (iii) originals or copies certified or otherwise identified of corporate and limited liability company records of the Company, including minute books of the Company as furnished to us by the Company and (iv) certificates of public officials and of representatives of the Company and statutes and other instruments or documents. In giving such opinion, we have relied upon certificates of officers of the Company with respect to the accuracy of the material factual matters contained in such certificates. In making our examination, we have assumed that all signatures on documents examined by us are genuine, that all documents submitted to us as originals are authentic and that all documents submitted to us as certified or photostatic copies conform with the original copies of such documents. Cleco Power LLC - 2 - May 6, 2002 On the basis of the foregoing, and subject to the assumptions, limitations and qualifications set forth herein, we are of the opinion that: The IQ Notes will, when they have been duly executed and authenticated in accordance with the Indenture, and delivered against payment of the consideration therefor determined in accordance with the Underwriting Agreement among the Company, Edward D. Jones & Co., L.P. and A.G. Edwards & Sons, Inc. dated May 6, 2002, constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as such enforceability is subject to the effect of any applicable bankruptcy, insolvency, reorganization or other law relating to or affecting creditors' rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The opinion set forth above is limited in all respects to matters of federal law of the United States of America and contract law of the State of New York as in effect on the date hereof. At your request, this opinion is being furnished to you for filing as Exhibit 5 (opinion regarding legality) to the Company's current report on Form 8-K reporting the offering of the IQ Notes. In giving such opinion, we do not concede that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder. Very truly yours, /s/ Baker Botts L.L.P. EX-23.1 6 dex231.txt CONSENT OF KPMG LLP EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT The Board of Directors Ambac Assurance Corporation: We consent to the incorporation by reference in the registration statement (No. 333-52540) of Cleco Power LLC (the "Registrant"), and in the Prospectus Supplement of the Registrant (the "Prospectus Supplement"), via the Form 8-K of the Registrant dated May 6, 2002 of our report dated January 23, 2002 on the consolidated financial statements of Ambac Assurance Corporation and subsidiaries as of December 31, 2001 and 2000, and for each of the years in the three-year period ended December 31, 2001, which report appears in the Annual Report on Form 10-K of Ambac Financial Group, Inc. which was filed with the Securities and Exchange Commission on March 26, 2002 and to the reference to our firm under the heading "Experts" in the Prospectus Supplement. /s/ KPMG LLP New York, New York May 6, 2002 -----END PRIVACY-ENHANCED MESSAGE-----