-----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, V1MBjnRpLtIB30HOpkWSMcX75l+QTZ8JFTzpWV574ixYN7M7O3fHcl3pm7xVhAAD 0MoipuX7iCTzT8Xs+PUUqA== 0000065984-96-000043.txt : 19960301 0000065984-96-000043.hdr.sgml : 19960301 ACCESSION NUMBER: 0000065984-96-000043 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 19960229 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LOUISIANA POWER & LIGHT CO /LA/ CENTRAL INDEX KEY: 0000060527 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 720245590 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-01329 FILM NUMBER: 96529262 BUSINESS ADDRESS: STREET 1: 639 LOYOLA AVE CITY: NEW ORLEANS STATE: LA ZIP: 70113 BUSINESS PHONE: 5045953100 S-3 1 Registration No. 33- SECURITIES AND EXCHANGE COMMISSION Form S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Louisiana Power & Light Company (Exact name of registrant as specified in its charter) State of Louisiana 72-0245590 (State or other jurisdiction of (I.R.S. Employer incorporation of organization) Identification No.) 639 Loyola Avenue, New Orleans, Louisiana 70113 504-576-4000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) JOHN J. CORDARO STEVEN C. McNEAL President Assistant Treasurer Louisiana Power & Light Louisiana Power & Light Company Company 639 Loyola Avenue 639 Loyola Avenue New Orleans, Louisiana 70113 New Orleans, Louisiana 70113 504-576-4000 504-576-4000 McCHORD CARRICO, Esq. JOHN T. HOOD, Esq. Monroe & Lemann Reid & Priest LLP (A Professional Corporation) 40 West 57th Street 201 St. Charles Avenue New York, New York 10019 New Orleans, Louisiana 70170 212-603-2000 504-586-1900 (Names, addresses, including zip codes, and telephone numbers, including area codes, of agents for service) It is also respectfully requested that the Commission send copies of all notices, orders and communications to: DAVID P. FALCK, Esq. Winthrop, Stimson, Putnam & Roberts One Battery Park Plaza New York, New York 10004 Approximate date of commencement of proposed sale to the public: From time to time after this registration statement becomes effective when warranted by market conditions and other factors. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. x If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] ________ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] _____ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] CALCULATION OF REGISTRATION FEE Proposed Proposed Title of Maximum Maximum Each Class Amount Offering Aggregate Amount of of Securities to be Price Offering Registration to be Registered Register Per Unit Price * Fee Waterford 3 Secured Lease Obligation $322,526,000 100% $322,526,000 $111,216 * Estimated solely for the purpose of calculating the registration fee, pursuant to Rule 457(o). The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time that a registration statement becomes effective. This prospectus supplement and the accompanying prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. PROSPECTUS SUPPLEMENT (Subject to Completion, Dated February 29, 1996) (To Prospectus dated ______________, 1996) $ $ Waterford 3 Secured Lease Obligation Bonds, % Series due $ Waterford 3 Secured Lease Obligation Bonds, % Series due Interest Payable July 2 and January 2 The Waterford 3 Secured Lease Obligation Bonds, % Series due and % Series due (the "Collateral Bonds") will be indirectly secured, as described in the accompanying Prospectus, by liens on, and a security interest in, certain ownership interests in and the respective Leases relating to Unit No. 3 (nuclear) of the Waterford Steam Electric Generating Station ("Waterford 3"), an1d will be payable solely from basic rentals and certain other amounts to be paid under such Leases by LOUISIANA POWER & LIGHT COMPANY The Collateral Bonds will be issued by W3A Funding Corporation ("Funding Corporation"), a corporation created for the sole purpose of issuing the Collateral Bonds as described in the accompanying Prospectus. Louisiana Power & Light Company (the "Company") will be unconditionally obligated to make rental payments in amounts which will be at least sufficient to pay in full, when due, all scheduled payments of principal of and interest on the Collateral Bonds, although the Collateral Bonds will not be direct obligations of, or guaranteed by, the Company. The Collateral Bonds of the % Series due (the "Series Collateral Bonds") will mature on __________ and the Collateral Bonds of the % Series due (the "Series Collateral Bonds") will mature on . The principal of the Collateral Bonds will be payable from time to time in installments. The Collateral Bonds will be redeemable, in whole or in part, on not less than 30 days' notice, either upon certain terminations of the Leases, or at the option of Funding Corporation at the redemption prices set forth herein (including a Make-Whole Premium (as defined herein) if redemption occurs at the option of Funding Corporation prior to ________ for the Series Collateral Bonds and ____ for the Series Collateral Bonds), in each case together with accrued interest to the date fixed for redemption. (See "Certain Terms of the Collateral Bonds".) THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. PRICE OF SERIES COLLATERAL BONDS_ % AND ACCRUED INTEREST, IF ANY PRICE OF SERIES COLLATERAL BONDS_ % AND ACCRUED INTEREST, IF ANY Price to Underwriting Public(1) Commissions(2)(3) Proceeds(1)(2) Per Series Collateral Bond % % Total $ $ $ Per Series Collateral Bond % % Total $ $ $ _______________________________ (1) Plus accrued interest, if any, from the date of original issuance. (2) Expenses, estimated to be $________, and underwriting commissions will be paid from the proceeds of the issuance and sale of the Collateral Bonds. Expenses, estimated to be $ , will be paid by the Company. (3) The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933. The Collateral Bonds will be issued in fully registered form and will be initially registered only in the name of Cede & Co, as nominee of The Depository Trust Company ("DTC"), which will act as securities depository for the Collateral Bonds. Beneficial interests in the Collateral Bonds will be shown on, and transfers thereof will be effected only through, records maintained by DTC and its direct and indirect participants. Except in the limited circumstances described herein, certificates representing interests in Collateral Bonds will not be issued in exchange for beneficial interests in the Collateral Bonds. Beneficial interests in the Collateral Bonds will trade in DTC's Same-Day Funds Settlement System and secondary market trading in such Collateral Bonds will therefore settle in immediately available funds. The Collateral Bonds are offered by the Underwriters named herein subject to prior sale, when, as and if accepted by the Underwriters, and subject to approval of certain legal matters by Winthrop, Stimson, Putnam & Roberts, counsel for the Underwriters, and certain other conditions. It is expected that delivery of the Collateral Bonds will be made on or about ____________, 199_ through the book-entry facilities of DTC against payment therefor in immediately available funds. MORGAN STANLEY & CO. CITICORP SECURITIES, INC. Incorporated _____________, 199_ SELECTED INFORMATION The following material, which is presented herein solely to furnish limited introductory information regarding the Collateral Bonds, is qualified in its entirety by reference to the detailed information appearing elsewhere in this Prospectus Supplement and the accompanying Prospectus. Certain capitalized terms used in this Prospectus Supplement and the accompanying Prospectus are defined in the Glossary at the end of the accompanying Prospectus. Securities Offered; Interest $ aggregate principal amount of Waterford 3 Secured Lease Obligation Bonds, of which $___________ bear interest at the rate of % per annum and mature on ("Series Collateral Bonds"), and $___________ bear interest at the rate of % per annum and mature on ("Series Collateral Bonds"). Interest on the Collateral Bonds of each series will be payable on January 2 and July 2 of each year, commencing 2, 199 . Principal Installment Payments The Supplemental Indenture relating to the Collateral Bonds ("Supplemental Indenture") provides for the payment of principal installments on the Collateral Bonds on each of the Installment Payment Dates set forth below, in an aggregate amount (subject to adjustment in certain circumstances) equal to the Installment Payment Amounts (as defined herein) set forth below, together with interest accrued to such Installment Payment Date. The Outstanding Balance Factor set forth below for each Installment Payment Date is for descriptive purposes only, and, unless there has been a partial redemption or a default or other installment payment adjustment, represents a factor that when multiplied by the original principal amount of each Series Collateral Bond and Series Collateral Bond will indicate the outstanding principal amount of such Collateral Bond remaining unpaid after payment of the principal installment due on such Installment Payment Date. Installment Aggregate Installment Outstanding Balance Payment Date Payment Amount Factor Series Series Series Series Collateral Collateral Collateral Collateral Bonds Bonds Bonds Bonds (See "Certain Terms of the Collateral Bonds_Principal Installment Payments".) Redemption The Collateral Bonds will be redeemable, in whole or in part, on not less than 30 days' notice, either (a) upon certain terminations of the Leases at a redemption price of 100% of the unpaid principal amount thereof plus accrued interest, if any, to the redemption date or (b) at the option of Funding Corporation, at a redemption price of 100% of the unpaid principal amount thereof plus accrued interest, if any, to the redemption date, plus a Make-Whole Premium (as defined herein) if such redemption occurs at the option of Funding Corporation prior to ____________ for the Series Collateral Bonds and _________ for the Series Collateral Bonds. (See "Certain Terms of the Collateral Bonds_Redemption".) Security and Source of Payment The Collateral Bonds will be indirectly secured, as described in the accompanying Prospectus, by liens on, and a security interest in, certain ownership interests in and the respective Leases relating to Waterford 3, and will be payable solely from basic rentals and certain other amounts to be paid under such Leases by the Company. Each Collateral Bond will be secured by the Pledged Lessor Bonds, which will be held by the Trustee. Each Pledged Lessor Bond will be secured by, among other things, (a) a lien on and security interest in the Undivided Interest of the Lessor issuing such Pledged Lessor Bond and (b) certain of the rights of such Lessor under its Lease with the Company, including the right to receive basic rent and certain other amounts payable by the Company thereunder. The Company is unconditionally obligated to make payments under the Leases in amounts that will be at least sufficient to provide for scheduled payments of the principal of and interest on the Pledged Lessor Bonds which amounts, in turn, will be sufficient to provide for scheduled payments of principal of and interest on the Collateral Bonds when due. However, neither the Collateral Bonds nor the Pledged Lessor Bonds will be direct obligations of, or guaranteed by, the Company. (See "Security and Source of Payment for the Collateral Bonds" in the accompanying Prospectus.) Upon the occurrence and continuance of any Lease Indenture Event of Default that results from a Lease Event of Default, the related Lessor will control the exercise of remedies against the Company under the related Lease, subject to the right of the Lease Indenture Trustee to cause such Lessor to forbear from any proposed action which would have a material adverse effect on the Holders of the related Lessor Bonds. There could be circumstances, therefore, in which amounts due on the Collateral Bonds are not paid and neither the Lease Indenture Trustee nor the Trustee would be able to direct such Lessor's pursuit of remedies against the Company under such Lease. The Lease Indenture Trustee would not be precluded, however, from selling the related Lease Indenture Estate (including the Undivided Interest) in a foreclosure or similar proceeding. If such sale occurs prior to or simultaneously with the termination of the related Lease, such Lessor must first be given an opportunity to purchase such Lease Indenture Estate at the proposed sale price. In the event of a sale pursuant to a foreclosure or similar proceeding (other than a sale to such Lessor), the Lease Indenture Trustee would have the right to terminate such Lease in connection with such sale. (See "Description of the Lease Indentures _ Notice; Waiver; Acceleration and Remedies" in the accompanying Prospectus.) Under certain circumstances the Company (or jointly the Company and an Affiliate thereof) may elect, or may be required, to assume the Lessor Bonds issued under any Lease Indenture, in whole or in part, and all obligations of the related Lessor under such Lease Indenture. (See "Description of the Lease Indentures _ Assumption by the Company" in the accompanying Prospectus.) In such cases, the Holders of the Collateral Bonds would retain the benefit of the pledge and mortgage under the Lease Indenture of the related Undivided Interest and the obligation to make payments on the Pledged Lessor Bonds would become a direct obligation of the Company. The Holders of the Collateral Bonds will have no recourse against the general credit of any of the institutions or individuals acting as Lessors or against the general credit of the Owner Participant. For a description of possible limitations on amounts payable as damages if the Company were to reject the Leases in the context of a bankruptcy proceeding, see "Security and Source of Payment for the Collateral Bonds" in the accompanying Prospectus. Waterford 3 Waterford 3 is a one-unit, nuclear-fueled electric generating plant located in St. Charles Parish, Louisiana. Waterford 3, which was placed in commercial operation in 1985, has a net generating capability of 1,075 MW. Unit 3 excludes certain transmission, pollution control and other facilities included in Waterford 3. Use of Proceeds The Company has determined, in light of prevailing economic and financial circumstances, to cause a refinancing of the Initial Lessor Bonds which were originally issued on September 28, 1989 and are currently outstanding. As part of such refinancing, the Lessors will redeem all of the outstanding Initial Lessor Bonds with the proceeds of the issuance and sale of the Collateral Bonds and certain other funds as described herein. (See "The Transactions and the Refinancing" in the accompanying Prospectus.) W3A Funding Corporation Funding Corporation was incorporated under the laws of the State of Delaware for the purpose of facilitating the refinancing of the debt associated with the Lessors' interests in Unit 3. The assets of Funding Corporation will consist of the Pledged Lessor Bonds, which are payable from basic rent and certain other payments which the Company is unconditionally obligated to make under the Leases. (See "W3A Funding Corporation" in the accompanying Prospectus.) CERTAIN TERMS OF THE COLLATERAL BONDS The following description of certain terms of the Collateral Bonds offered hereby supplements, and should be read together with, the statements under "Description of the Collateral Bonds and the Indenture" in the accompanying Prospectus. Capitalized terms used in this Prospectus Supplement have the same meanings as in the accompanying Prospectus. Principal Amounts, Interest Rates, Stated Maturities and Payment The Collateral Bonds will be issued in two separate series: $ principal amount of Waterford 3 Secured Lease Obligation Bonds, % Series due (hereinafter sometimes called the "Series Collateral Bonds") and $ principal amount of Waterford 3 Secured Lease Obligation Bonds, % Series due (hereinafter sometimes called the "Series Collateral Bonds"). The Series Collateral Bonds and the Series Collateral Bonds are hereinafter sometimes referred to, collectively, as the "Collateral Bonds". The Series Collateral Bonds will mature , and the Series Collateral Bonds will mature , . The Collateral Bonds of each series will bear interest on the unpaid principal amount thereof from the date of issuance at the rate per annum shown in its title, payable on January 2 and July 2 of each year, commencing 2, 199 , to the Holders thereof at the close of business on the December 15 or June 15, as the case may be, next preceding such interest payment date. (Supplemental Indenture) The Collateral Bonds will be issued originally solely in book-entry form to DTC or its nominee, Cede & Co., to be held in DTC's book-entry only system. So long as the Collateral Bonds are held in the book-entry only system, DTC (or a successor securities depositary) or its nominee will be the registered owner or holder of the Collateral Bonds for all purposes of the Indenture and of the Collateral Bonds. (See "_Book-Entry Only System" below.) Except as described under "_Book-Entry Only System" below, Beneficial Owners (as defined below) of the Collateral Bonds will not have the right to have any Collateral Bonds registered in their names and will not receive or have the right to receive physical delivery of certificates representing their ownership interests in the Collateral Bonds. For so long as any purchaser is the Beneficial Owner of a Collateral Bond, such purchaser must maintain an account with a broker or dealer who is, or acts through, a DTC Participant (as defined below) to receive payment of the principal of and premium, if any, and interest on such Collateral Bond. The laws of some states may require that certain purchasers of securities take physical delivery of such securities. Such limits and laws may impair the ability to transfer beneficial interests in Collateral Bonds. So long as the Collateral Bonds are held in the book-entry only system, the principal of and premium, if any, and interest on the Collateral Bonds will be paid through the facilities of DTC (or a successor securities depository). If the book-entry only system is discontinued, the principal of and premium, if any, and interest payable at maturity on the Collateral Bonds will be payable at the corporate trust office of any paying agent designated by Funding Corporation from time to time; and interest and Installment Payment Amounts (as defined below), other than such amounts payable at maturity, will be paid by check drawn upon the paying agent and mailed to the address of the person entitled thereto, as shown in the securities register. Because the principal of each Collateral Bond will be subject to payment from time to time without surrender of, or notation on, the Collateral Bond, the unpaid principal amount of each Collateral Bond as reflected in the securities register maintained by the Trustee shall be controlling and binding on each Holder with respect to the actual unpaid principal amount of a Collateral Bond as of any date. In any case where any redemption date, any Installment Payment Date or the stated maturity of principal of or any installment of interest on any Collateral Bond, or any date on which any defaulted interest or principal is proposed to be paid, is not a business day, then (notwithstanding any other provision of the Indenture or such Collateral Bond) payment of interest and/or principal and premium, if any, shall be due and payable on the next succeeding business day with the same force and effect as if made on or at such nominal redemption date, the stated maturity, Installment Payment Date or date on which the defaulted interest or principal is proposed to be paid, and no interest will accrue on the amount so payable for the period from and after such redemption date, stated maturity, Installment Payment Date or date for the payment of defaulted interest or principal, as the case may be. If there has been a default in the payment of interest or any Installment Payment Amount on any Collateral Bond, such defaulted interest or principal may be payable to the Holder of such Collateral Bond as of the close of business on a date selected by the Trustee which is not more than 15 days and not less than 10 days prior to the date proposed by Funding Corporation for payment of such defaulted interest or principal or in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Collateral Bond may be listed, if the Trustee deems such manner of payment practicable. (Indenture, Sections 1.13, 2.10 and 2.16) Principal Installment Payments On each Installment Payment Date (set forth below), Funding Corporation will pay an installment of principal of each Collateral Bond of each series equal (subject to adjustment as described below) in amount (an "Installment Payment Amount") to the Installment Payment Percentage (set forth below) for the Collateral Bonds of such series for such Installment Payment Date multiplied by the original principal amount of such Collateral Bond. Installment Payment Percentage Series Collateral Bonds Series Collateral Bonds Installment Payment Date Upon the occurrence of certain changes in Federal income tax rates or laws, the Company or the Owner Participant may cause the respective principal amounts of Series Collateral Bonds and Series Collateral Bonds that are to be paid in installments on the Installment Payment Dates and the stated maturity to be adjusted to match any adjustment made to the principal amortization schedules and maturity of the Pledged Lessor Bonds in connection with a recalculation of basic rent under one or more of the Leases, provided that such adjustments shall not increase or decrease the average life of the Collateral Bonds of either such series (calculated in accordance with generally accepted financial practice) by more than 6 months or extend the final maturity of such Collateral Bonds. The Trustee shall send by mail to each Holder of affected Collateral Bonds at least 30 days before the first payment date with respect to which an adjustment is to be made, a revised payment schedule of principal amounts of Collateral Bonds. In the event there shall have been any partial redemption of the Collateral Bonds of either series (other than pursuant to principal installment payments), each Installment Payment Amount for each Collateral Bond of a series subsequent to such redemption shall be reduced by (i) in the case of a partial redemption as described under "Redemption_Optional Redemption", an amount equal to the amount obtained by multiplying such Installment Payment Amount as in effect prior to such redemption by a fraction of which the numerator shall be the aggregate principal amount of Collateral Bonds of such series redeemed pursuant to such partial redemption, and the denominator shall be the aggregate unpaid principal amount of Collateral Bonds of such series outstanding immediately prior to such redemption and (ii) in the case of a partial redemption as described under "Redemption_Redemption upon Lease Termination", an amount such that the aggregate of all principal installment payments to be made on the Collateral Bonds of such series on the relevant Installment Payment Date shall be equal to the amount of principal of the Pledged Lessor Bonds to be paid on such date under the remaining Lease Indentures, any such reduction to be made on a pro rata basis, as nearly as practicable, among the Holders of the Collateral Bonds of such series. (Supplemental Indenture) Redemption Redemption upon Lease Termination If any Lease is to be terminated as described in the accompanying Prospectus in "Description of the Leases_Purchase Option for Significant Expenditures", "_Periodic Purchase Option" or "_Termination for Obsolescence" or in "Other Agreements_Participation Agreement", and all Lessor Bonds issued under the related Lease Indenture are to be prepaid, Collateral Bonds, equal in principal amount to the Pledged Lessor Bonds issued under such Lease Indenture, will be redeemed on the date on which such Lessor Bonds are to be prepaid, at a redemption price of 100% of the unpaid principal amount thereof plus accrued interest, if any, to the redemption date, all subject, however, except in the case of a termination for obsolescence, to the right of the Company to assume such Lessor Bonds in which event there will be no redemption of Collateral Bonds as a consequence of such termination. Optional Redemption The Collateral Bonds of each series will be subject to redemption, at the option of Funding Corporation, in whole at any time or in part from time to time, at the redemption price of 100% of the unpaid principal amount of such Collateral Bonds to be so redeemed, plus accrued interest, if any, to the redemption date, plus, if such redemption is made prior to the applicable Premium Termination Date, the Make-Whole Premium, if any. The "Premium Termination Date" is __________ for the Series ___ Collateral Bonds and __________ for the Series ___ Collateral Bonds. The Make-Whole Premium, if any, on the Collateral Bonds will be determined by an independent investment banking institution of national standing (the "Investment Banker") selected by the Company. The Investment Bank will first determine the Treasury Rate with respect to any redemption of Collateral Bonds. The Treasury Rate means, with respect to each Collateral Bond to be redeemed, a per annum rate (expressed as a semiannual equivalent and as a decimal and, in the case of United States Treasury bills, converted to a bond equivalent yield) determined to be the per annum rate equal to the semiannual yield to maturity of United States Treasury securities maturing on the Average Life Date (as defined below) of such Collateral Bond, as determined by interpolation between the most recent weekly average yields to maturity for two series of United States Treasury securities (A) one maturing as close as possible to, but earlier than, the Average Life Date of such Collateral Bond and (B) the other maturing as close as possible to, but later than, the Average Life Date of such Collateral Bond, in each case as published in the most recent H.15(519) (or, if a weekly average yield to maturity for United States Treasury securities maturing on the Average Life Date of such Collateral Bond is reported in the most recent H.15(519), as published in H.15(519)). "H.15(519)" means Statistical Release H.15(519), Selected Interest Rates," or any successor publication, published by the Board of Governors of the Federal Reserve System. The "most recent H.15(519)" means the latest H.15(519) which is published prior to the close of business on the third business day prior to the applicable redemption date. The Average Life Date for any Collateral Bond to be redeemed shall be the date which follows the redemption date by a period equal to the Remaining Weighted Average Life of such Collateral Bond. The Remaining Weighted Average Life of such Collateral Bond with respect to the redemption of such Collateral Bond is the number of days equal to the quotient obtained by dividing (A) the sum of the products obtained by multiplying (1) the amount of each remaining principal payment on such Collateral Bond by (2) the number of days from and including the redemption date, to but excluding the scheduled payment date of such principal payment by (B) the unpaid principal amount of such Collateral Bond. To determine the Make-Whole Premium for any Collateral Bond, the Investment Banker then will determine, as of the third business day prior to the redemption date, the sum of the present values of all of the remaining scheduled payments of principal and interest from the redemption date to maturity on such Collateral Bond computed on a semiannual basis by discounting such payments (assuming a 360-day year consisting of twelve 30- day months) using such Treasury Rate. If the sum of these present values of the remaining payments as computed above exceeds the aggregate unpaid principal amount of the Collateral Bond to be redeemed plus any accrued but unpaid interest thereon, the difference will be payable as a premium upon redemption of such Collateral Bonds. If the sum is equal to or less than such principal amount plus accrued interest, there will be no premium payable with respect to such Collateral Bond. Procedure for and Notice of Redemption If fewer than all of the Collateral Bonds shall be called for redemption, the particular Collateral Bonds or portions thereof to be redeemed shall be selected by the Trustee from the series and in the principal amount designated by Funding Corporation except as otherwise required by the Indenture by prorating, as nearly as practicable, the principal amount of such Collateral Bonds to be redeemed among the Holders of such Collateral Bonds. Any Collateral Bonds and portions of Collateral Bonds selected for redemption which are deemed to be paid in accordance with the provisions of the Indenture will cease to bear interest on the specified redemption date. Notice of redemption shall be given by mail not less than 30 nor more than 60 days prior to the date fixed for redemption to the Holders of Collateral Bonds to be redeemed (which, if the Collateral Bonds are held in the book- entry only system, will be DTC or a successor depository); provided, however, that failure to duly give such notice by mail, or any defect therein, shall not affect the validity of any proceedings for the redemption of Collateral Bonds as to which there shall have been no such failure or defect. With respect to notice of any redemption of the Collateral Bonds, such notice will state that such redemption will be conditional upon the receipt by the Trustee at or prior to the date fixed for such redemption of money sufficient to pay the principal of and premium, if any, and interest on such Collateral Bonds. If such money is not so received, such notice will be of no force and effect, Funding Corporation will not redeem such Collateral Bonds and the Trustee will give notice, in the manner in which the notice of redemption was given, that such money was not so received, and such redemption is not required to be made. (Indenture, Article Six; Supplemental Indenture; and form of Collateral Bond) Book-Entry Only System DTC will act as securities depository for the Collateral Bonds. The Collateral Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee). DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants ("Direct Participants") deposit with DTC. DTC also facilitates the settlement among Direct Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Direct Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is owned by a number of its Participants (as defined below) and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants", and together with the Direct Participants, the "Participants"). The Rules applicable to DTC and its Participants are on file with the SEC. Purchases of Collateral Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Collateral Bonds on DTC's records. The ownership interest of each actual purchaser of each Collateral Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' respective records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Collateral Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners and will be settled in same-day funds. Beneficial Owners will not receive certificates representing their ownership interests in the Collateral Bonds except in the event that use of the book-entry system for the Collateral Bonds is discontinued. To facilitate subsequent transfers, all Collateral Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of the Collateral Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Collateral Bonds; DTC's records reflect only the identity of the Direct Participant to whose accounts such Collateral Bonds are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by either Direct or Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent by the Trustee to Cede & Co. Neither DTC nor Cede & Co. will consent or vote with respect to Collateral Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the Trustee as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Collateral Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal, premium, if any, and interest payments on the Collateral Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participants and not of DTC, the Company, Funding Corporation, the Underwriters or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium, if any, and interest to DTC is the responsibility of the Trustee on behalf of Funding Corporation, disbursement of such payments to Direct Participants is the responsibility of DTC, and disbursement of such payments to the Beneficial Owners is the responsibility of Participants. If DTC is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed, Funding Corporation will issue to Beneficial Owners individual certificated Collateral Bonds representing their ownership interests in Collateral Bonds. In addition, the Company may at any time determine not to have any particular series of Collateral Bonds held in the book-entry only system and, in such event, Funding Corporation will issue to Beneficial Owners individual certificated Collateral Bonds representing their ownership interests in such Collateral Bonds. In any such instance, a Beneficial Owner will be entitled to have such certificated Collateral Bonds registered in its name. Individual certificated Collateral Bonds so issued will be issued as registered Collateral Bonds in denominations of $1,000 or any integral multiple thereof. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Company believes to be reliable, including DTC, but none of the Company, Funding Corporation, the Underwriters or the Trustee takes responsibility for the accuracy or completeness thereof. None of the Company, the Trustee, Funding Corporation, the Underwriters or any agent for payment on or registration of transfer or exchange of the Collateral Bonds will have any responsibility or liability for any aspect of the records relating to or payments made on account of interests of beneficial owners of any Collateral Bond or for maintaining, supervising or reviewing any records relating to such interests. USE OF PROCEEDS Proceeds from the issuance of the Collateral Bonds will be used to make loans to the Lessors, to be evidenced by the Pledged Lessor Bonds, in amounts sufficient, together with amounts made available to the Lessors by the Company as rent under the related Leases and, at the option of the Owner Participant, from amounts made available by the Owner Participant as an additional investment, to enable the Lessors to redeem the outstanding Initial Lessor Bonds and to pay certain costs and expenses incurred in connection with the Refinancing. UNDERWRITING Subject to the terms and conditions of the Underwriting Agreement among the Company, Funding Corporation and the Underwriters, the Underwriters named below have severally agreed to purchase from Funding Corporation, and Funding Corporation has agreed to sell to the Underwriters, severally, the respective principal amounts of the Collateral Bonds set forth below. Principal Amount Principal Amount of Series of Series Collateral Bonds Collateral Bonds Morgan Stanley & Co. Incorporated $ $ Citicorp Securities, Inc. Total The Underwriting Agreement provides that the several obligations of the Underwriters thereunder are subject to the approval of certain legal matters by counsel and to various other conditions. The nature of the Underwriters' obligations is such that they are committed to purchase all of the Collateral Bonds if any are purchased; provided that the Underwriting Agreement provides that under certain circumstances involving a default of Underwriters, less than all of the Collateral Bonds may be purchased. The Company has been advised by the several Underwriters that the Underwriters propose to offer the Series Collateral Bonds and the Series Collateral Bonds directly to the public at the public offering prices set forth on the cover page of this Prospectus Supplement and to certain dealers at such prices less a concession of % of the principal amount of the Series Collateral Bonds and % of the principal amount of the Series Collateral Bonds. The Underwriters may allow, and such dealers may re-allow, a concession not in excess of % of the principal amount of the Series Collateral Bonds and % of the principal amount of the Series Collateral Bonds to certain other dealers. After the initial public offering, the offering prices and other selling terms may be changed. The Underwriting Agreement provides that, subject to certain conditions, the Company will indemnify each Underwriter and its controlling persons against certain liabilities, including certain liabilities under the Securities Act of 1933, as amended, and will contribute to payments the Underwriters may be required to make in respect thereof. The Company does not intend to apply for listing of the Collateral Bonds on a national securities exchange but has been advised by the Underwriters that the Underwriters presently intend to make a market in the Collateral Bonds, as permitted by applicable laws and regulations. The Underwriters are not obligated, however, to make a market in the Collateral Bonds, and such market making may be discontinued at any time at the sole discretion of each Underwriter. Accordingly, no assurance can be given as to the liquidity of, or trading markets for, the Collateral Bonds. From time to time, the Underwriters and/or certain of their affiliates engage in transactions with or perform services for the Company in the ordinary course of business. In addition, an affiliate of Citicorp Securities, Inc. is the Owner Participant. Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time that the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. PROSPECTUS Subject to Completion Dated February 29, 1996 $322,526,000 Waterford 3 Secured Lease Obligation Bonds The Waterford 3 Secured Lease Obligation Bonds (the "Collateral Bonds") will be issued at one time or from time to time, in one or more series, at prices and on terms to be determined at the time of sale. The Collateral Bonds will be indirectly secured, as described herein, by liens on, and security interests in, certain ownership interests in, and by the Leases relating to, Unit No. 3 (nuclear) of the Waterford Steam Electric Generating Station ("Waterford 3") and will be payable solely from basic rentals and certain other amounts payable under such Leases by Louisiana Power & Light Company The Collateral Bonds will be issued by W3A Funding Corporation ("Funding Corporation"), a corporation created for the sole purpose of issuing the Collateral Bonds as described herein. Louisiana Power & Light Company (the "Company"), as Lessee under each Lease, will be unconditionally obligated to make rental payments in amounts which will be at least sufficient to pay in full, when due, all scheduled payments of principal of and interest on the Collateral Bonds, although the Collateral Bonds will not be direct obligations of, or guaranteed by, the Company. This Prospectus will be supplemented by a prospectus supplement (the "Prospectus Supplement") which will set forth, as applicable, the designation, the aggregate principal amount, rate and time of payment of interest, maturity, purchase price, initial public offering price, if any, any redemption or installment payment provisions and other specific terms of each series of the Collateral Bonds in respect of which this Prospectus is being delivered. The Collateral Bonds will be secured by a pledge and assignment of certain nonrecourse Lessor Bonds ("Pledged Lessor Bonds") issued by the Lessors under the Lease Indentures described herein. Each Pledged Lessor Bond will be secured by a lien on and security interest in the undivided ownership interest in Waterford 3 of the Lessor which has issued such Pledged Lessor Bonds and certain of the rights of such Lessor under its Lease with the Company, including the right to receive the basic rentals and certain other amounts payable by the Company thereunder. (See "Security and Source of Payment for the Collateral Bonds," "Description of the Collateral Bonds and the Indenture," "Description of the Lease Indentures" and "Description of the Leases.") THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The Collateral Bonds will be sold through an underwriting syndicate including Morgan Stanley & Co. Incorporated and Citicorp Securities, Inc. as set forth in the Prospectus Supplement. The net proceeds from the sale of the Collateral Bonds, and any applicable commissions or discounts, are set forth in the applicable Prospectus Supplement. This Prospectus may not be used to consummate sales of the Collateral Bonds unless accompanied by the Prospectus Supplement. MORGAN STANLEY & CO. Incorporated CITICORP SECURITIES, INC. , 199_ IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES OFFERED HEREBY OR ANY OTHER SECURITIES OF THE COMPANY AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended ("Exchange Act"), and in accordance therewith files reports and other information with the Securities and Exchange Commission ("SEC"). Such reports include information, as of particular dates, concerning the Company's directors and officers, their remuneration, the principal holders of the Company's securities and any material interest of such persons in transactions with the Company. Such reports and other information can be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549; 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and Seven World Trade Center, 13th floor, New York, New York 10048. Copies of this material can also be obtained at prescribed rates from the Public Reference Section of the SEC at its principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The Company's series of 12.64% Preferred Stock and 9.68% Preferred Stock are listed on the New York Stock Exchange. Reports and other information concerning the Company can be inspected and copied at the office of such Exchange at 20 Broad Street, New York, New York 10005. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed with the SEC pursuant to the Exchange Act are incorporated in this Prospectus by reference: 1. The Company's Annual Report on Form 10-K for the year ended December 31, 1994. 2. The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995, June 30, 1995 and September 30, 1995. ln addition, all documents subsequently filed by the Company pursuant to Section 13, 14 or 15(d) of the Exchange Act prior to the termination of this offering shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing of such documents (such documents, and the documents enumerated above, being herein referred to as "Incorporated Documents"). Any statement contained herein or in an Incorporated Document shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained in any other subsequently filed Incorporated Document or in an accompanying Prospectus Supplement modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company hereby undertakes to provide without charge to each person, including any beneficial owner, to whom a copy of this Prospectus has been delivered, on the written or oral request of any such person, a copy of any or all of the Incorporated Documents, other than exhibits to such documents, unless such exhibits are specifically incorporated by reference therein. Requests should be directed to Christopher T. Screen, P.O. Box 61000, New Orleans, Louisiana 70161, telephone number 504-576-4212. The information relating to the Company contained in this Prospectus and any accompanying Prospectus Supplement does not purport to be comprehensive and should be read together with the information contained in the Incorporated Documents. No person has been authorized to give any information or to make any representation not contained in this Prospectus or, with respect to any series of the Collateral Bonds, the Prospectus Supplement relating thereto, and, if given or made, such information or representation must not be relied upon as having been authorized by the Company or any underwriter. This Prospectus and any Prospectus Supplement do not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby in any jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction. Neither the delivery of this Prospectus and a Prospectus Supplement nor any sale made thereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date of that Prospectus Supplement. THE COMPANY The Company was incorporated under the laws of the State of Louisiana on October 15, 1974 and is the successor by merger to a predecessor Louisiana Power & Light Company, which was incorporated under the laws of the State of Florida in 1927. The merger of such predecessor corporation into the Company became effective on February 28, 1975. The Company's principal executive office is located at 639 Loyola Avenue, New Orleans, Louisiana 70113. Its telephone number is (504) 576-4000. The Company is an electric public utility company with all of its operations in the State of Louisiana. All of the outstanding common stock of the Company is owned by Entergy Corporation ("Entergy"), a Delaware corporation. Entergy is a registered public utility holding company under the Public Utility Holding Company Act of 1935, as amended. The Company, Arkansas Power & Light Company ("AP&L"), Gulf States Utilities Company ("Gulf States"), Mississippi Power & Light Company ("MP&L") and New Orleans Public Service Inc. ("NOPSI") are the principal operating electric utility subsidiaries of Entergy. Entergy also owns, among other entities, all of the common stock of System Energy Resources, Inc. ("System Energy"), a generating company, and Entergy Operations, Inc., a nuclear management services company that operates Waterford 3 as well as the nuclear units of AP&L, Gulf States and System Energy. The Company, AP&L, MP&L and NOPSI own all of the capital stock of System Fuels, Inc., a special purpose company which implements and/or maintains certain programs for the procurement, delivery and storage of fuel supplies for certain Entergy subsidiaries. The foregoing information relating to the Company does not purport to be comprehensive and should be read together with the financial statements and other information contained in the Incorporated Documents. USE OF PROCEEDS Unless the accompanying Prospectus Supplement provides otherwise, the proceeds of the sale of the Collateral Bonds will be used to make loans to the Lessors, to be evidenced by the Pledged Lessor Bonds, in amounts sufficient, together with amounts made available to the Lessors by the Company as rent under the related Leases and, at the option of the Owner Participant, from amounts made available by the Owner Participant as an additional investment, to enable the Lessors to redeem all the outstanding Initial Lessor Bonds and to pay certain costs and expenses incurred in connection with the Refinancing. RATIOS OF EARNINGS TO FIXED CHARGES The Company has calculated ratios of earnings to fixed charges pursuant to Item 503 of SEC Regulation S-K as follows: Twelve Months Ended DecembeR 31, September 30, 1990 1991 1992 1993 1994 1995 Ratio of Earnings to Fixed 2.32 2.40 2.79 3.06 2.91 3.26 Charges THE TRANSACTIONS AND THE REFINANCING On September 28, 1989, the Company sold, for an aggregate purchase price of $353,600,000, and leased back, on a long-term net lease basis, three undivided portions of its 100% ownership interest in Unit 3 in three substantially identical, but entirely separate, Transactions, each such Transaction being documented separately. Such Undivided Interests, which represent, in the aggregate, approximately a 10.5% interest in Unit 3 (which is equivalent on a cost basis to approximately a 9.3% interest in Waterford 3), were sold to First National Bank of Commerce, New Orleans, Louisiana, as Owner Trustee under each of three separate trust agreements (each such agreement with an institutional investor as an Owner Participant) and as Lessor under each of three separate leases with the Company. Unit 3 excludes certain transmission, pollution control and other facilities included in Waterford 3. At the end of the terms of the Leases and assuming the Company does not exercise any of its purchase options under any Lease, the Lessors, together, as owners of the Undivided Interests, will be entitled to approximately 10.5% of the capacity and energy produced by Waterford 3; prior to such time such capacity and energy remain available to the Company. After the term of a Lease, any person (including a Lessor) other than the Company which has possession of the related Undivided Interest would be required to compensate the Company for the use of certain of such excluded facilities, at such levels that the sum of such compensation (discounted to present value, where appropriate) and the fair market value of such Undivided Interest, as of the end of the term of such Lease, would approximate the fair market value, determined as of such time, of an undivided ownership interest in Waterford 3 equal to such person's entitlement share of the capacity of Waterford 3. Approximately 87.7% of the aggregate consideration paid by the Lessors for their respective interests in Unit 3 was provided to the Lessors from the issuance and sale of the Waterford 3 Secured Lease Obligation Bonds (the "Initial Lessor Bonds") in 1989. The balance of such consideration was contributed to the Lessors by the Owner Participant. As of January 30, 1996, the outstanding Initial Lessor Bonds consist of (i) $77,840,000 aggregate principal amount of 10.30% Series A due January 2, 2005, $38,922,000 aggregate principal amount of 10.30% Series B due January 2, 2005 and $20,861,000 aggregate principal amount of 10.30% Series C due January 2, 2005, and (ii) $95,896,000 aggregate principal amount of 10.67% Series A due January 2, 2017, $47,949,000 aggregate principal amount of 10.67% Series B due January 2, 2017 and $25,700,000 aggregate principal amount of 10.67% Series C due January 2, 2017. The Company has determined, in light of prevailing economic and financial circumstances, to exercise its option pursuant to the Participation Agreements to request the respective Lessors to refinance the Initial Lessor Bonds which are currently outstanding (the "Refinancing"). The Lessors will obtain the funds required to redeem the Initial Lessor Bonds and to pay related expenses from non-recourse borrowings by them from Funding Corporation and from rent payments which the Company has agreed to make under the Leases with such Lessors and, at the option of the Owner Participant, from amounts made available from the Owner Participant as an additional investment. The loans by Funding Corporation to each Lessor will be evidenced by one or more new series of Lessor Bonds (the "Pledged Lessor Bonds") issued by such Lessor to Funding Corporation under the related Lease Indenture. The Pledged Lessor Bonds of each Lessor will be secured by, among other things, the basic rentals and certain other payments which the Company is obligated to make under the relevant Lease. Funding Corporation will obtain the funds to enable it to make the loans to the Lessors through the offer and sale of the Collateral Bonds. (See "Security and Source of Payment for the Collateral Bonds" and "Use of Proceeds.") FLOW OF FUNDS FOR DEBT SERVICE PAYMENTS ON THE COLLATERAL BONDS LOUISIANA POWER & LIGHT COMPANY (LESSEE) Rental Payments Due Under the Leases (Assigned by the Owner Trustees) LEASE INDENTURE TRUSTEES Debt Service for Rent Payments the Pledged Lessor in Excess of Bonds Debt Service TRUSTEE FOR THE COLLATERAL BONDS (Issued by W3A Funding Corporation) Debt Service for the Collateral Bonds COLLATERAL BONDHOLDERS OWNER TRUSTEES (LESSORS) Rental Payments in Excess of Debt Service OWNER PARTICIPANT See "Security and Source of Payment for the Collateral Bonds." SECURITY AND SOURCE OF PAYMENT FOR THE COLLATERAL BONDS Concurrently with the initial authentication and delivery of the Collateral Bonds of each series, Funding Corporation will cause to be delivered to the Trustee Pledged Lessor Bonds (a) issued as separate series under the Lease Indentures, (b) payable as to principal on such dates and in such amounts that on the stated maturity of principal and each sinking fund redemption date or principal installment payment date of such Collateral Bonds there shall be payable on the Pledged Lessor Bonds an amount in respect of principal equal to the principal amount of such Collateral Bonds then to mature or to be payable in installments of principal or be redeemed, (c) bearing interest at the same rate and payable at the same times as the corresponding Collateral Bonds of such series, (d) containing provisions for redemption, including redemption premiums, correlative to the provisions for redemption (other than pursuant to a sinking fund) of the corresponding Collateral Bonds of such series and (e) registered in the name of the Trustee. (Indenture, Section 2.03) The Pledged Lessor Bonds, which will be without recourse to the general credit of the related Owner Trustee and the Owner Participant and will not be direct obligations of, or guaranteed by, the Company, will be payable from and secured by, among other things, a lien on and security interest in the related Undivided Interest, and, subject to certain exceptions, the rights of the Owner Trustee under the related Lease, including the right to receive all basic rentals and certain other payments to be made by the Company (subject in each case to certain permitted liens). Excluded from the Lease Indenture Estate are any and all Excepted Payments and certain other rights. The Leases provide that basic rent payments to be made by the Company be calculated in such amounts as will be sufficient to provide for the payment, when due, of scheduled payments of principal of and interest on all of the related Lessor Bonds. (See "Description of the Leases _ Term and Rentals.") Each Lease is a net lease pursuant to which the Company will be unconditionally obligated to make all payments thereunder. (See "Description of the Leases _ Net Lease.") If a Lease Event of Default shall have occurred and be continuing under any Lease, remedies under such Lease may be exercised as described in "Description of the Leases _ Remedies." If a Lease Indenture Event of Default shall have occurred and be continuing, remedies may be exercised as described under "Description of the Lease Indentures _ Notice; Waiver; Acceleration and Remedies." If a Lease Indenture Event of Default shall have occurred and be continuing at a time when there shall not have occurred and be continuing a Lease Event of Default under the related Lease, the exercise of such remedies may not disturb the Company's quiet use and possession of the related Undivided Interest or require prepayment of basic rent, Casualty Value or Special Casualty Value under such Lease. In certain instances, the Company, or the Company and an Affiliate thereof jointly, may elect or may be required to assume the obligations of the Owner Trustee under the related Lease Indenture and on all or a portion of the related Lessor Bonds (see "Description of the Lease Indentures_Assumption by the Company"). Upon such an assumption, the Owner Trustee would be released from its obligations under such Lease Indenture and on the related Lessor Bonds. In such case, the Holders of such Lessor Bonds would retain the benefit under the related Lease Indenture of the Lien on and security interest in the related Undivided Interest, and the obligation to make payments on such Lessor Bonds would become a direct obligation of the Company, or the Company and an Affiliate thereof, as the case may be. Subject to certain conditions, additional Collateral Bonds may be issued under the Indenture (a) for the purpose of redeeming all or any part of any series of Collateral Bonds previously issued under such Indenture, including the Collateral Bonds issued in connection with the Refinancing, and of providing funds for the payment of certain expenses incurred in connection with the issuance of such additional Securities and (b) to provide funds for all or a portion of certain alterations, modifications, additions or capital improvements to Unit 3, subject to certain limitations. All additional Collateral Bonds issued under the Indenture will be secured equally, together with the Collateral Bonds issued in connection with the Refinancing, by all Lessor Bonds pledged by Funding Corporation to the Trustee. The Company has issued a new series of first mortgage bonds under its first mortgage bond indenture to secure the payment to the Owner Participant of the equity portion of amounts payable by the Company under the respective Leases and other transaction documents. If prior to maturity of such first mortgage bonds, there shall have occurred an Event of Loss, Deemed Loss Event, Financial Event or Lease Event of Default in respect of which the Lessee shall be obligated to prepay all or any portion of the principal of the promissory note which was issued by the Company to the Owner Participant as a condition to the issuance of the Initial Lessor Bonds, then such first mortgage bonds shall be redeemed, on the date such prepayment is to be made, in a principal amount equal to the portion of the principal of the promissory note then to be prepaid. Neither the holders of the Lessor Bonds (including the Trustee, as holder of the Pledged Lessor Bonds) nor the Holders of the Collateral Bonds are entitled to the benefit of any such financial support. (See "Other Agreements _ Participation Agreement.") If the Company were to enter into bankruptcy or reorganization proceedings, the Company or its bankruptcy trustee could reject any Lease. In such event, there could be no assurance that the amount of any claim for damages under such Lease would be allowed in amounts sufficient to provide for the repayment of the related Collateral Bonds. Under Section 502(b)(6) of the United States Bankruptcy Code, as amended, a claim by a lessor for damages resulting from the rejection of a lease of real property in connection with bankruptcy proceedings affecting the lessee may be limited to an amount equal to the rent reserved under the lease, without acceleration, for the greater of 1 year or 15 percent (but not more than 3 years) of the remaining term of the lease, plus rent already due but unpaid. Although there can be no assurances, Louisiana counsel to the Company believes that it is likely that a bankruptcy court would find much of the property covered by the Leases to be real property. If such property were held to constitute personal property, the above limitation would not apply. In any case, rejection of any Lease by the Company or its bankruptcy trustee would not deprive the related Indenture Trustee of its lien on and security interest in the related Undivided Interest. Rejection of any Lease would deprive the Company of the benefit of the related Undivided Interest and any revenues which could be derived from the sale of the output thereof. If the Owner Participant or any Lessor becomes subject to bankruptcy or reorganization proceedings and, by reason of such proceedings, the Owner Participant or any Lessor is held to have recourse liability to the Holder of any Lessor Bond or the related Lease Indenture Trustee, and such Holder or the related Lease Indenture Trustee actually receives payment on account of such recourse liability, such Holder or the Indenture Trustee, as the case may be, shall promptly refund to the Owner Participant or any Lessor, as appropriate, any amount of such payment which exceeds the amount which would have been received on or prior to the date of such payment by such Holder or the Indenture Trustee if the Owner Participant or the Lessor had not become subject to such recourse liability. (Participation Agreement, Section 20(f)) For further information with respect to the source of payment for the Collateral Bonds, the Indenture and the Lease Indentures relating to the Lessor Bonds, see "Description of the Collateral Bonds and the Indenture" and "Description of the Lease Indentures." W3A FUNDING CORPORATION Funding Corporation was incorporated under the laws of the state of Delaware for the purpose of facilitating the Refinancing and has only nominal equity capital. The only business of Funding Corporation will be the issuance and sale of the Collateral Bonds and the lending of the proceeds therefrom. (See "Use of Proceeds.") Funding Corporation may (but is not required to) make loans in connection with any significant capital improvements which may be installed at Unit 3 from time to time. The assets of Funding Corporation will consist of any Lessor Bonds issued by the Lessors to Funding Corporation from time to time and $1,000 in cash, representing the equity capital contributed by its sole shareholder, NCR Holding, Inc., which is a wholly-owned subsidiary of NCR Corporate Research, Ltd. None of the Company, any Lessor or the Owner Participant holds any ownership interest in Funding Corporation, NCR Holding, Inc. or NCR Corporate Research, Ltd., and no person affiliated with the Company, any Lessor or the Owner Participant is an officer, director or employee of any such entity. DESCRIPTION OF THE COLLATERAL BONDS AND THE INDENTURE The statements contained under this caption are intended to briefly summarize the Collateral Bonds; they do not purport to be complete and are qualified in their entirety by reference to the Indenture, a copy of the form of which has been filed as an exhibit to the Registration Statement of which this Prospectus is a part. A Prospectus Supplement will describe the following terms of the series of Collateral Bonds to be issued: (1) the designation of each series of the Collateral Bonds; (2) the aggregate principal amount of each series; (3) the date on which each series will mature; (4) the rate at which each series will bear interest and the date from which such interest accrues; (5) the dates on which interest will be payable; and (6) the prices, terms and conditions upon which each series may be redeemed by the Company prior to maturity or upon which installment payments of principal will become due and payable. General The Collateral Bonds are to be issued under the Collateral Trust Indenture (the "Indenture") among Funding Corporation, the Company and Bankers Trust Company, as Trustee, as supplemented by one or more Supplemental Indentures, among such parties. Unless otherwise indicated in a Prospectus Supplement, the Collateral Bonds will be issued in fully registered form without coupons in denominations of $1,000 or any integral multiple thereof. Collateral Bonds may be surrendered for registration of transfer or exchange for Collateral Bonds of the same series and maturity at the corporate trust office of Bankers Trust Company, registrar and paying agent for the Collateral Bonds, in New York, New York. The Trustee shall not be required to register the transfer or exchange of any Collateral Bonds called for redemption or during a period of 15 days preceding a mailing of notice of redemption. No service charge will be required of any Bondholder participating in any transfer or exchange of Collateral Bonds in respect of such transfer or exchange, but, with certain exceptions, payment may be required of any tax or other governmental charges that may be imposed in connection therewith. (Indenture, Sections 2.05 and 2.08) Additional Securities The Indenture provides that the aggregate principal amount of Securities (including the Collateral Bonds) which may be issued thereunder is unlimited, provided that at least an equal aggregate principal amount of Lessor Bonds must be pledged as security under the Indenture in support of the payment of such Securities. A separate Supplemental Indenture will be entered into among Funding Corporation, the Company and the Trustee establishing the designation, interest rate, sinking fund, installment payments of principal and redemption provisions, if any, and other specific terms of any particular series of Securities. (Indenture, Section 2.03) Any additional series of Securities will be secured pari passu with the Collateral Bonds by the Pledged Lessor Bonds. (Indenture, Granting Clauses) Merger, Consolidation and Transfer of Assets by Funding Corporation The certificate of incorporation of Funding Corporation provides that Funding Corporation will not (a) dissolve or liquidate, in whole or in part, or (b) merge into or consolidate with, or sell all or any part of its assets to, any person, firm, corporation, partnership or other entity unless the acquiring entity or the surviving corporation, as the case may be, has a certificate of incorporation containing provisions identical to those of Funding Corporation's certificate of incorporation restricting the nature of its business and purposes and its ability to take certain action and, in the case of a sale of assets, the acquiring entity shall have assumed all the liabilities and obligations of Funding Corporation. In addition, Funding Corporation has agreed in the Indenture that it will not amend those provisions of its certificate of incorporation that restrict the nature of its business, purposes and activities and that provide for its capitalization. (Indenture, Section 5.08) Events of Default The following will be Events of Default under the Indenture: (a) failure to pay any interest on any Security when it becomes due and payable, and the continuation of such failure for a period of 10 days; or (b) failure to pay any principal of or premium, if any, on any Security when it becomes due and payable, whether at its stated maturity of principal, on any applicable redemption date or any principal installment payment date or at any other time, and the continuation of such failure for a period of 10 days; or (c) failure on the part of either Funding Corporation or the Company to perform or observe any covenant or agreement in the Indenture to be performed or observed by it, and the continuation of such failure for a period of 30 days after notice has been given to Funding Corporation or the Company, as the case may be, by the Trustee, or to the Company or Funding Corporation, as the case may be, and the Trustee by the Holders of at least 25% in principal amount of the outstanding Securities, specifying such failure and requiring it to be remedied and stating that such notice is a "Notice of Default" under the Indenture; provided, however, that the continuation of such failure for a period of 30 days or more after such notice has been so given (but in no event for a period which is greater than one year after such notice has been given) shall not constitute an Event of Default if (i) such failure can be remedied but cannot be remedied within such 30 days; (ii) the Company or Funding Corporation, as the case may be, is diligent in pursuing a remedy of such failure and (iii) such failure does not impair in any respect the lien and security interest created by the Indenture; or (d) the occurrence of any Lease Indenture Event of Default; or (e) the entry of a decree or order by a court having jurisdiction in the premises adjudging Funding Corporation a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of Funding Corporation under the U.S. Bankruptcy Code or any other applicable federal or state law or law of the District of Columbia, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of Funding Corporation or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuation of any such decree or order unstayed and in effect for a period of 75 consecutive days; or (f) the institution by Funding Corporation of proceedings to be adjudicated a bankrupt or insolvent, or the consent by the institution of bankruptcy of insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under the United States Bankruptcy Code or any other applicable federal or state law or law of the District of Columbia, or the consent by it to the filing of any such petition or the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of Funding Corporation or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by Funding Corporation in furtherance of any such action. (Indenture, Section 8.01) The Company and Funding Corporation must file an annual certificate with the Trustee as to compliance with the provisions of the Indenture. (Indenture, Section 5.09) Funding Corporation has agreed in the Indenture that it will not take certain corporate action which could result in its being declared bankrupt or insolvent. (Indenture, Section 5.08) The Company, the Lessors, the Owner Participant and the Lease Indenture Trustees have each agreed in the Participation Agreements that none of them will file, or participate in the filing of, a petition seeking reorganization, arrangement, adjustment, or composition of or in respect of Funding Corporation prior to the 181st day following the payment in full of the Collateral Bonds and discharge of the Indenture. (Participation Agreement, Sections 6(b), 7(b), 8(b) and 9(b)) Acceleration and Remedies Upon the occurrence and continuance of an Event of Default, (i) if such Event of Default is of the type specified in clause (a), (b), (c), (e) or (f) of the first paragraph under "Events of Default" above, the Trustee may and, upon the direction of the Holders of not less than a majority in principal amount of the Securities outstanding the Trustee shall, and (ii) if such Event of Default is of the type specified in clause (d) of the first paragraph under "Events of Default" above (including without limitation a Lease Event of Default which has resulted in a default of the type specified in clause (a) or (b) of such paragraph) under circumstances in which there has been an acceleration of a maturity of the related Pledged Lessor Bonds, the Trustee shall, declare all the Securities to be immediately due and payable; provided that no such declaration will be made (and the Trustee will not take action to sell any property pledged to it under the Indenture or to institute proceedings for payment on any Securities or Pledged Lessor Bonds) in the case of a payment default of the type specified in clause (a) or (b) of such paragraph which resulted directly from a failure by the Company to make any payment of rent under a Lease until such time as the Lessor under such Lease has been given the opportunity to exercise its rights, if any, to cure such default under the related Lease Indenture. (See "Description of the Lease Indentures - Rights of Lessor to Cure and Purchase Lessor Bonds.") (Indenture, Section 8.02) In addition, upon the occurrence of a Lease Indenture Event of Default, Lease Indenture Default, Event of Loss, Deemed Loss Event or Financial Event, if an officer of the Trustee has actual knowledge thereof, the Trustee will give notice to all Holders of such fact in accordance with the provisions of the Indenture and thereafter each Holder will have the right to direct the Trustee, as the holder of the Pledged Lessor Bonds issued under such Lease Indenture, to vote the principal amount of such Pledged Lessor Bonds in proportion to the principal amount of Securities owned by such Holder, or to direct the related Lease Indenture Trustee to take such action, or refrain from taking such action, as it is permitted to take under the terms of the related Lease Indenture. Under each Lease Indenture, directions given to the Lease Indenture Trustee as described in the preceding sentence will be dictated by (x) in the case of a Lease Indenture Event of Default or a Lease Indenture Default, the holders of no less than a majority in aggregate principal amount of the outstanding Lessor Bonds of all series (considered as one class) and (y) in the case of an Event of Loss, Deemed Loss Event or Financial Event, the holders of not less than 5% in aggregate principal amount of the outstanding Lessor Bonds of all series (considered as one class), which, in either case, will mean, until such time, if any, as additional Lessor Bonds are issued under such Lease Indenture, the Holders of not less than a majority or 5% respectively in aggregate principal amount of the Collateral Bonds outstanding as a result of the pass-through voting mechanism described above. (Indenture, Section 3.03; Lease Indenture, Sections 2.16 and 7.07) With certain exceptions, the request of the Holders of not less than a majority in aggregate principal amount of Securities outstanding will be necessary to require the Trustee to exercise any remedy under the Indenture. (Indenture, Section 8.07) The Trustee will be entitled to receive reasonable indemnity and under certain circumstances is not required to act. (Indenture, Section 9.03) In addition, no Holder shall have any right to pursue any remedy under the Indenture unless the Trustee shall have been given written notice of an Event of Default, the Holders of at least 25% in principal amount of all Securities then outstanding shall have requested the Trustee to pursue a remedy, the Trustee shall have been offered satisfactory indemnity, the Trustee shall have failed to comply with such request within 60 days after receipt of such request and the Trustee shall not have received during such 60 day period any direction inconsistent with such request from Holders of a majority in principal amount of outstanding Securities. (Indenture, Section 8.09) Voting of Lessor Bonds The Trustee, as holder of the Pledged Lessor Bonds, will have the right to vote and give consents and waivers in respect of such Pledged Lessor Bonds and the Lease Indentures only as described below. The Holders of the Securities may instruct the Trustee as to action by the Trustee, as holder of the Pledged Lessor Bonds, under any Lease Indenture, including the voting of Pledged Lessor Bonds. Upon receiving from Holders any directions as to the taking of any action, including the voting of any Pledged Lessor Bond, the Trustee shall specify to the related Lease Indenture Trustee the principal amount of the Pledged Lessor Bonds which is in favor of the action or vote, the principal amount of the Pledged Lessor Bonds which is opposed to the action or vote and the principal amount of the Pledged Lessor Bonds which is not taking any position as to the action or vote. Such principal amounts shall be determined by allocating to the total principal amounts of the Pledged Lessor Bonds with respect to which direction is to be given the proportionate principal amount of Securities taking corresponding positions or not taking any position, based on the aggregate principal amount of outstanding Securities. (Indenture, Section 3.03) Because the Lease Indentures permit additional Lessor Bonds to be issued and secured thereunder, and do not require that such additional Lessor Bonds be issued only to Funding Corporation, it is possible that at some future time the Pledged Lessor Bonds would not constitute a majority of the Lessor Bonds issued and outstanding under the Lease Indentures. (See "Description of the Lease Indentures - Additional Lessor Bonds.") Supplemental Indenture Without the consent of the Holders of any Securities, Funding Corporation, the Company and the Trustee may enter into supplemental indentures for the following purposes: (a) to establish the form and terms of any series of Securities; (b) to evidence the succession of another corporation to the Company, and the assumption by any such successor of the covenants of the Company contained in the Indenture, or to evidence the succession of another corporation to Funding Corporation, and the assumption by any such successor of the covenants of Funding Corporation contained in the Indenture and in the Securities; (c) to evidence the succession of a new trustee or the appointment of a co-trustee or a separate trustee under the Indenture; (d) to add to the covenants of Funding Corporation or of the Company, for the benefit of the Holders of the Securities, or to evidence the surrender of any right or power conferred in the Indenture upon Funding Corporation or the Company; (e) to convey, transfer and assign to the Trustee, and to subject to the lien of the Indenture, additional Pledged Lessor Bonds or additional properties or assets, and to correct or amplify the description of any property at any time subject to the lien of the Indenture or to assure, convey and confirm unto the Trustee any property subject or required to be subject to the lien of the Indenture; (f) to permit or facilitate the issuance of Securities in uncertificated form; (g) to change or eliminate any provision of the Indenture; provided, however, that if such change or elimination will adversely affect the interests of the Holders of Securities of any series, such change or elimination will become effective with respect to such series only when no Security of such series remains outstanding; or (h) to cure any ambiguity, to correct or supplement any provision in the Indenture which may be defective or inconsistent with any other provision in the Indenture, or to make any other provisions with respect to matters or questions arising under the Indenture, provided such action shall not adversely affect the interest of the Holders of the Securities in any material respect. Without limiting the generality of the foregoing, if the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), as in effect at the date of the execution and delivery of the Indenture or at any time thereafter shall be amended and (x) if any such amendment shall require one or more changes to any provisions of the Indenture or the inclusion in the Indenture of any additional provisions, or shall by operation of law be deemed to effect such changes or incorporate such provisions by reference or otherwise, or (y) if any such amendment shall permit one or more changes to, or the elimination of, any provisions of the Indenture which, at the date of the execution and delivery of the Indenture or at any time thereafter, are required by the Trust Indenture Act to be contained in the Indenture or are contained in the Indenture to reflect any provisions of the Trust Indenture Act as in effect on such date, the Indenture shall be deemed to have been amended to conform to such amendment to the Trust Indenture Act or to effect such changes or elimination, and Funding Corporation, the Company and the Trustee may, without the consent of any Holders, enter into a supplemental indenture to evidence such amendment. (Indenture, Section 11.01) With the consent of the Holders of not less than a majority in aggregate principal amount of all Securities then outstanding considered as one class, Funding Corporation, the Company and the Trustee may enter into supplemental indentures for any purpose; provided that if there is more than one series of Securities outstanding and if a proposed supplemental indenture directly affects the Holders of at least one, but not all, of such series, then only the consent of a majority in aggregate principal amount of the Holders of the directly affected series of Securities will be required; and provided, further, that without the consent of the Holders of all the Securities then outstanding directly affected thereby no such supplemental indenture may: (a) change the stated maturity of the principal of, or any installment of interest on, or the maturity date of any installment of principal of, or the dates or circumstances of payment of premium, if any, on any Security or reduce the principal amount of, or the interest on, or any premiums payable upon any redemption of, any Security or change the place of payment where, or the coin or currency in which, any Security or the premium, if any, or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment of principal or interest on or after the stated maturity thereof (or, in the case of redemption, on or after the redemption date) or such payment of premium, if any, on or after the date such premium becomes due and payable or change the dates or amounts of payments to be made through the operation of a sinking fund (if any) or through installment payments of principal (if any) in respect of such Securities; (b) permit the creation of any lien prior or, except with respect to additional Securities issued in accordance with the Indenture, equal to the lien of the Indenture with respect to any of the Pledged Lessor Bonds, terminate the lien of the Indenture on the Pledged Lessor Bonds (except as permitted by the Indenture) or deprive any Holder of the security afforded by the Indenture; (c) reduce the percentage in principal amount of the Securities the consent of whose Holders is required for any supplemental indenture or the consent of whose Holders is required for any waiver provided for in the Indenture or reduce the requirements of the Indenture relating to (1) a quorum for meetings of Holders or (2) action taken by Holders pursuant to the Indenture at meetings thereof; or (d) modify any of the above provisions or the provisions of the Indenture dealing with waivers of past defaults, except to increase the percentage of the Holders whose consent is required for certain action or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the Holders affected thereby. (Indenture, Section 11.02) Without the consent of the Holders of any Securities, the Trustee may join in the execution of amendments of or supplements to, or waivers of the provisions of, the Participation Agreement. Defeasance Securities of any series, or any portion of the principal amount thereof, will, prior to the maturity thereof, be deemed to have been paid for purposes of the Indenture (except as to any surviving rights of registration of transfer or exchange expressly provided for in the Indenture), and the entire indebtedness of Funding Corporation in respect thereof will be deemed to have been satisfied and discharged, if (a) there shall have been irrevocably deposited with the Trustee, in trust, money in an amount which will be sufficient to pay when due the principal of and premium, if any, and interest due and to become due on such Securities or portions thereof on and prior to the stated maturity of principal or redemption date or (b) the Pledged Lessor Bonds of the corresponding series are deemed to have been paid in accordance with the Lease Indenture or Lease Indentures under which such Pledged Lessor Bonds were issued. (Indenture, Section 12.01) (See also "Description of the Lease Indentures - - Defeasance.") It is possible that for federal income tax purposes any deposit contemplated in the preceding paragraph or any deeming of the Pledged Lessor Bonds to have been paid as contemplated in such paragraph could be treated as a taxable exchange of the related Collateral Bonds for an issue of obligations of a trust or a direct interest in the cash and securities held in a trust. In that case, Holders of such Collateral Bonds would recognize gain or loss as if the trust obligations or the cash or securities deposited or deemed paid, as the case may be, had actually been received by them in exchange for their Collateral Bonds. Such gain or loss, generally, would be capital in nature to Holders for whom the Collateral Bonds are held as capital assets and any deductions for losses would be subject to certain limitations. Such Holders would be required to include in income a share of the income, gain or loss of the trust or the income from the securities held in trust, as the case may be, in the taxable year in which such event occurs. The amount so required to be included in income could be different from the amount that would be includable in the absence of such deposit. Neither the Company nor Funding Corporation has any obligation to obtain a revenue ruling or other authority as to the absence of adverse tax consequences arising from any such event. Prospective investors are urged to consult their own tax advisors as to the specific consequences to them of such deposit. The Trustee Bankers Trust Company will act as Trustee under the Indenture. As of the date of the issuance of the Collateral Bonds, Bankers Trust Company will also be Lease Indenture Trustee under each of the Lease Indentures entered into in connection with the Transactions. DESCRIPTION OF THE LEASE INDENTURES The statements made under this caption are intended to summarize the Lease Indentures as they relate to the Lessor Bonds; they do not purport to be complete and are qualified in their entirety by reference to the Lease Indentures, copies of which have been filed as exhibits to the Registration Statement of which this Prospectus is a part. Each Lease Indenture is an entirely separate indenture but contains substantially the same terms and provisions as each other Lease Indenture. Unless the context requires otherwise, in the following summary references to the Lease Indenture, the Lease Indenture Estate, the Lease, the Lessor, the Owner Participant, the Owner Trustee, the Lessor Bonds and the Pledged Lessor Bonds relate to each Lease Indenture. General Lessor Bonds (including the Initial Lessor Bonds, Pledged Lessor Bonds and other Lessor Bonds) may be issued under the Lease Indentures. The Pledged Lessor Bonds will, at the direction of Funding Corporation, be pledged and assigned to the Trustee for the benefit of the Holders of the Securities (including the Collateral Bonds). Lease Indenture Events of Default The following are Lease Indenture Events of Default: (a) any Lease Event of Default described in the following clauses of the first paragraph in "Description of the Leases _ Lease Events of Default": (i) clause (a)(x), except a failure of the Company to pay an amount which constitutes an Excepted Payment or except in the case of a default in the payment of Casualty Value, Special Casualty Value, or the payment of the equity portion of Casualty Value or Special Casualty Value, where the Owner Trustee has not rescinded or terminated the Lease or (ii) clause (e) or (g); (b) the rescission or termination of, or the taking of action by the Owner Trustee or the Owner Participant, the effect of which would be to rescind or terminate, the Lease; (c) the exercise by the Owner Trustee or the Owner Participant of certain remedies under the Lease, as a result of which the Company would be obligated to pay liquidated damages, prior to the occurrence of any of the events set forth in clause (b) above; (d) any assignment, sublease or transfer by the Company of the Lease and the other transaction documents in violation of the terms thereof; (e) breach by the Company of the provisions of the related Participation Agreement relating to the maintenance of its corporate existence and relating to a merger by the Company into or consolidation of the Company with another entity or the sale or transfer of all or substantially all of the Company's assets by the Company (see "Other Agreements _ Participation Agreement"); (f)(x) failure by the Owner Trustee to make any payment in respect of the principal of or premium, if any, or interest on the Lessor Bonds within five business days after the same shall have become due (other than by virtue of any failure by the Company to make any payment of rent therefor); or (y) following the actual receipt by the Owner Participant of proceeds of a partial draw upon a letter of credit in excess of the amounts due to the Owner Participant at the time of such partial draw, failure of such Owner Participant to cause such excess proceeds to be delivered to the Lease Indenture Trustee within five business days after the actual receipt of such proceeds; (g)(x) failure by the Owner Trustee to perform or observe any covenant or agreement in the Lease Indenture to be performed or observed by it (other than any failure by the Owner Trustee to pay or cause to be paid any payment of the principal of or premium, if any, or interest on the Lessor Bonds when due), or (y) failure by the Owner Participant to observe its covenant in the Participation Agreement not to create certain liens on the Lease Indenture Estate or the trust estate and, in either case, the continuation of such failure for a period of 30 days after notice thereof has been given to the Owner Trustee, the Owner Participant and the Company by the Lease Indenture Trustee or to the Lease Indenture Trustee, the Company, the Owner Trustee and the Owner Participant by the Holders of at least 25% in aggregate principal amount of the outstanding Lessor Bonds of all series, considered as one class; provided, however, that the continuation of such failure for a period of 30 days or more after such notice has been so given (but in no event for a period which is greater than one year after such notice has been given) shall not constitute a Lease Indenture Event of Default if (i) such failure can be remedied but cannot be remedied within such 30 days, (ii) the Owner Trustee or the Owner Participant, as the case may be, is diligently pursuing a remedy of such failure and (iii) such failure does not impair in any material respect the mortgage and security interest created by the Lease Indenture; (h) any representation or warranty made by the Owner Trustee in the Participation Agreement, or any representation or warranty made by the Owner Participant in the Participation Agreement concerning liens against the trust estate or the Lease Indenture Estate as a result of claims against the Owner Participant unrelated to the Transactions shall prove to have been incorrect in any material respect when such representation or warranty was made or given and remains materially incorrect at the time of discovery; provided, however, that such failure of such representation or warranty to be correct shall not constitute a Lease Indenture Event of Default if (i) the facts or circumstances making such representation or warranty incorrect can be remedied or changed so that such representation or warranty will henceforth be correct in all material respects, (ii) the Owner Trustee or the Owner Participant, as the case may be, is diligently pursuing such a remedy or change, (iii) such remedy or change is, in fact, accomplished within a period of one year from the time that the Owner Trustee or the Owner Participant, as the case may be, has been notified of such misrepresentation or breach of warranty and (iv) such facts or circumstances do not impair in any material respect the mortgage and security interest created by the Lease Indenture; (i)(x) the Owner Trustee shall file any petition for dissolution or liquidation of the trust created by the trust agreement or shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or subsequently in effect, or the Owner Trustee shall have consented to the entry of an order for relief with respect to the trust in an involuntary case under any such law, or a receiver, custodian or trustee (or other similar official) shall be appointed for the Owner Trustee or shall take possession of any substantial part of its property (other than at the instance of the Lease Indenture Trustee or the Holders of Lessor Bonds), or the Owner Trustee shall make a general assignment for the benefit of the trust's creditors, or shall enter into an agreement of composition with the trust's creditors; or (y) there shall be filed (other than at the instance of the Lease Indenture Trustee or the Holders of Lessor Bonds) against the Owner Trustee an involuntary petition in bankruptcy which results in an order for relief being entered or, notwithstanding that an order for relief has not been entered, the petition is not dismissed within 60 days after the date of the filing of the petition, or there shall be filed (other than at the instance of the Lease Indenture Trustee or the Holders of Lessor Bonds) under any Federal or state law relating to bankruptcy, insolvency or relief of debtors any petition against the Owner Trustee for reorganization, composition, extension or arrangement with creditors which either (i) results in a finding or adjudication of insolvency of the Owner Trustee or (ii) is not dismissed within 60 days after the date of the filing of such petition; (j)(x) the Owner Participant shall file any petition for dissolution or liquidation of the Owner Participant, or shall commence a voluntary case, under any applicable bankruptcy, insolvency or other similar law now or subsequently in effect, or the Owner Participant shall have consented to the entry of an order for relief in an involuntary case under any such law, or shall fail generally to pay its debts as such debts become due (within the meaning of the United States Bankruptcy Code, as amended), or a receiver, custodian or trustee (or other similar official) shall be appointed for the Owner Participant or shall take possession of any substantial part of its property, or the Owner Participant shall make a general assignment for the benefit of its creditors, or shall enter into an agreement of composition with its creditors; or (y) there shall be filed against the Owner Participant an involuntary petition in bankruptcy which results in an order for relief being entered or, notwithstanding that an order for relief has not been entered, the petition is not dismissed within 60 days after the date of the filing of the petition, or there shall be filed under any Federal or state law relating to bankruptcy, insolvency or relief of debtors any petition against the Owner Participant for reorganization, composition, extension or arrangement with creditors which either (i) results in a finding or adjudication of insolvency of the Owner Participant or (ii) is not dismissed within 60 days after the filing of such petition and any such event materially adversely affects the Holders of the Lessor Bonds; or (k) after a Special Transfer has been effected and amounts payable to the Owner Participant have been paid in full in accordance with the Participation Agreement, any violation or breach of any covenant of the Company concerning the Company's continuing obligation to pay rent under the Lease or concerning its obligation to effectuate and evidence an assumption as described in "Description of the Lease Indentures_Assumption by the Company." (Lease Indenture, Section 7.01) Notice; Waiver; Acceleration and Remedies The Lease Indenture Trustee, if it has knowledge of any Lease Indenture Default or Lease Indenture Event of Default, is required to give notice thereof (unless such Lease Indenture Default or Lease Indenture Event of Default shall have been waived or cured) within 90 days thereof in writing to the Holders of the outstanding Lessor Bonds of all series, the Owner Trustee, the Owner Participant and the Company; provided that, except in the case of a default in the payment of principal of or premium, if any, or interest on any Lessor Bond, the Lease Indenture Trustee will be protected in withholding such notice if in good faith it determines that the withholding of such notice is in the interest of the Holders; and provided, further, that in the case of a Lease Indenture Event of Default specified in clause (g) above, no such notice will be given until at least 30 days after the occurrence thereof. In the event the Lease Indenture Trustee has knowledge of an Event of Loss, Deemed Loss Event or Financial Event, the Lease Indenture Trustee shall give prompt notice thereof, and in any event, within 90 days after occurrence thereof, to the Holders of the outstanding Lessor Bonds. (Lease Indenture, Section 8.02) For all purposes of the Lease Indenture, in the absence of actual knowledge of a Responsible Officer of the Lease Indenture Trustee, the Lease Indenture Trustee will not be deemed to have knowledge of any Lease Indenture Default or Lease Indenture Event of Default (except the failure of the Company to pay any installment of basic rent within 5 business days after the same has become due) unless notified thereof in writing by any Holder, the Owner Trustee, the Owner Participant or the Company. (Lease Indenture, Section 8.03) The Holders of a majority in aggregate principal amount of the outstanding Lessor Bonds of all series, considered as one class, may on behalf of the Holders of all Lessor Bonds of all series waive any past Lease Indenture Default or Lease Indenture Event of Default and its consequences, except that only the Holders of all Lessor Bonds affected thereby may waive a Lease Indenture Default or Lease Indenture Event of Default (a) in the payment of the principal of or premium, if any, or interest on such Lessor Bonds, or (b) in respect of a covenant or other provision of the Lease Indenture which under the Lease Indenture cannot be modified or amended without the consent of the Holder of each outstanding Lessor Bond affected. (Lease Indenture, Section 7.09) If a Lease Indenture Event of Default has occurred and is continuing, the Lease Indenture Trustee may, and upon the written request of, and the proffering of satisfactory indemnity by, the Holders of a majority in aggregate principal amount of the outstanding Lessor Bonds of all series, considered as one class, shall, declare the unpaid principal amount of all outstanding Lessor Bonds, with accrued interest thereon, to be immediately due and payable, but the Lease Indenture Trustee shall not make any such declaration in the case of a Lease Indenture Event of Default which resulted from a failure by the Company to make a payment of rent under the Lease until the Owner Trustee and the Owner Participant have been given an opportunity to cure such default as described below under "Rights of Lessor to Cure and Purchase Lessor Bonds." (Lease Indenture, Sections 7.02, 7.16 and 8.03) Upon the occurrence and during the continuance of a Lease Indenture Event of Default, the Lease Indenture Trustee may, and upon the written request of, and the proffering of satisfactory indemnity or security by, the Holders of a majority in aggregate principal amount of the outstanding Lessor Bonds of all series, considered as one class, shall, subject to the Lessor's rights described under the following two paragraphs and under "Rights of Lessor to Cure and Purchase Lessor Bonds" below, exercise any or all of the rights and remedies available to it under the Lease Indenture and applicable law, including (a) the institution of judicial proceedings, either at law or in equity or otherwise, to protect its rights and those of the Holders under the Lease Indenture or for foreclosure of the lien thereof and (b) the sale in whole or in part of the Lease Indenture Estate. (Lease Indenture, Sections 7.03 through 7.08 and Section 8.03) No Holder shall have any right to pursue any remedy under the Lease Indenture unless the Lease Indenture Trustee shall have been given written notice of a Lease Indenture Event of Default, the Holders of at least 25% in principal amount of all Lessor Bonds then outstanding shall have requested the Lease Indenture Trustee to pursue a remedy, the Lease Indenture Trustee shall have been offered satisfactory indemnity, the Lease Indenture Trustee shall have failed to comply with such request within 60 days after receipt of such request and the Lease Indenture Trustee shall not have received during such 60 day period any direction inconsistent with such request from Holders of a majority in principal amount of outstanding Lessor Bonds. (Lease Indenture, Section 7.10) Except in the case of Lease Indenture Events of Default (i) described in clauses (f) through (k) under "Lease Indenture Events of Default" above and (ii) occurring or continuing after a Special Transfer, an assumption of the Lessor Bonds by the Company as described below under "_Assumption by the Company" or any of certain drawings upon a letter of credit, and except as described in the next paragraph, the exercise of remedies against the Company under the Lease will be controlled by the Owner Trustee. In such circumstances, however, the Owner Trustee will be required to consult with the Lease Indenture Trustee as to any proposed exercise or pursuit of remedies and the Lease Indenture Trustee will have the right to cause the Owner Trustee to forbear from such action if the Lease Indenture Trustee has determined that such action would have a material adverse effect on the Holders of the Lessor Bonds. In addition, the Owner Trustee will not exercise or pursue remedies in a manner which would unreasonably deprive the Holders of the Lessor Bonds of a material right or remedy unless the Owner Trustee is commensurately adversely affected. There could be circumstances, therefore, in which amounts due on the Lessor Bonds are not paid and the Lease Indenture Trustee is not able to direct the Owner Trustee's pursuit of remedies against the Company under the Lease. (Lease Indenture, Sections 7.03 and 7.17) Although, as described above, the exercise of remedies will generally be within the control of the Owner Trustee, the Lease Indenture Trustee will have the right to sell the Lease Indenture Estate in foreclosure or similar proceedings. However, if such sale occurs prior to or simultaneously with the termination of the Lease, the Lease Indenture Trustee must have offered to sell to the Owner Trustee the Lease Indenture Estate at a stated price determined by the Lease Indenture Trustee. If the Owner Trustee does not, within 60 days following receipt of such offer, elect to so purchase the Lease Indenture Estate, the Lease Indenture Trustee may foreclose and sell the Lease Indenture Estate within 180 days to any person (other than the Lease Indenture Trustee or a Holder or Holders of more than 25% of the outstanding Lessor Bonds (including, in each case, affiliates thereof) ) for not less than such stated price. In the event of a sale by the Lease Indenture Trustee pursuant to a foreclosure or similar proceeding (other than a sale to the Owner Trustee), the Lease Indenture Trustee will have the right to terminate the Lease in connection with such sale subject, however, to the Company's rights under the Lease. (See "Limitation on Remedies" below.) (Lease Indenture, Section 7.17) If a Lease Indenture Event of Default occurs and is continuing, and the maturity of the Lessor Bonds has been accelerated, any sums held or received by the Lease Indenture Trustee may be applied to reimburse the Lease Indenture Trustee for any expense (to the extent not previously reimbursed) incurred by it and to pay its fees and any other amounts due it prior to any payments to Holders of the Lessor Bonds. (Lease Indenture, Section 3.03) In the event of a bankruptcy of the Owner Participant, it is possible that, notwithstanding that the Undivided Interest is owned by the Owner Trustee in trust, the Undivided Interest and the related Lease and Pledged Lessor Bonds might become subject to bankruptcy proceedings. In such event, payments under such Lease or on such Pledged Lessor Bonds might be interrupted and the ability of the Lease Indenture Trustee to exercise its remedies under the Lease Indenture might be restricted, although the Lease Indenture Trustee would retain its status as a secured creditor in respect of the Lease and the Undivided Interest. Rights of Lessor to Cure and Purchase Lessor Bonds The Lease Indenture provides that a Lease Indenture Event of Default is to be deemed cured if such Lease Indenture Event of Default results from a non-payment of rent under the Lease and the Owner Trustee or Owner Participant has paid all principal of and interest on the Lessor Bonds due (other than by acceleration) on the date such rent was payable within 15 days after receipt by the Owner Trustee of notice of such nonpayment. However, such right of the Owner Trustee or Owner Participant to cure the non-payment of rent is limited to not more than six basic rent payment dates or two consecutive basic rent payment dates during the Lease term. (Lease Indenture, Section 7.16) If a Lease Indenture Event of Default has occurred and is continuing and (a) the Lessor Bonds have been accelerated and (b) the Owner Trustee, within 30 days after receiving notice thereof from the Lease Indenture Trustee, has given written notice to the Lease Indenture Trustee of its intention to purchase all the Lessor Bonds, then, upon receipt by the Lease Indenture Trustee within 10 business days after such notice from the Owner Trustee of an amount equal to the aggregate unpaid principal amount of and interest on the Lessor Bonds then outstanding (as well as any interest on overdue principal and, to the extent permitted by law, overdue interest), each Holder of a Lessor Bond will be required to sell such Lessor Bond, and its right, title and interest in and to the Lease Indenture and the Lease Indenture Estate, to the Owner Trustee. (Lease Indenture, Section 7.16) Limitation on Remedies Notwithstanding any other provision of the Lease Indenture, so long as no Lease Event of Default has occurred and is continuing, the Lease Indenture Trustee may not take or cause to be taken any action (x) contrary to the Company's rights under the Lease, including the right to quiet use, enjoyment and possession of the Undivided Interest or (y) that would require prepayment of any scheduled payment of rent thereunder. (Lease Indenture, Section 7.20) Assumption by the Company Under certain circumstances and subject to the satisfaction of certain conditions, the Company, or the Company and an Affiliate thereof jointly, may elect, or may be required, to assume the obligations of the Owner Trustee under the Lease Indenture and on all or a portion of the Lessor Bonds. Upon such assumption, the Lease Indenture and the Lessor Bonds so assumed will become direct obligations of the Company (and such Affiliate), the Lease will terminate, the Undivided Interest of the Lessor in Unit 3 will be transferred to the Company (and/or any such Affiliate) and the Owner Trustee will be released and discharged from all further obligations and liabilities under the Lease Indenture and on the Lessor Bonds so assumed. Although certain changes would be made to the Lease Indenture to reflect the termination of the Lease, the lien on and security interest in the Undivided Interest created by the Lease Indenture would not be affected thereby. (Lease Indenture, Section 2.16) Upon the occurrence of an Event of Loss, Deemed Loss Event, Financial Event or Lease Event of Default, the Owner Participant can demand that the Company pay the excess of Casualty Value (in the case of an Event of Loss or Lease Event of Default) or Special Casualty Value (in the case of a Deemed Loss Event or Financial Event, subject to certain exceptions) over the principal of and accrued interest on the Lessor Bonds then outstanding. (Participation Agreement, Sections 15 (a), (b) and (c) and Section 16(a)) At the time of the issuance of the Initial Lessor Bonds, the Company issued and delivered to the Owner Participant a promissory note evidencing the Company's obligation to pay such amounts. (Participation Agreement, Section 16(a)) In addition, upon the occurrence of any of such Events, the Owner Participant can effect a Special Transfer of the beneficial interest in the owner trust to the Company. (Participation Agreement, Section 15(d)) If an Event of Loss, Deemed Loss Event or Financial Event has occurred in respect of which the Owner Participant has demanded payment as described above or in response to which a Special Transfer has been effected, the Company, in order to effectuate and evidence an assumption of the Owner Trustee's obligations under the Lease Indenture and on the Lessor Bonds, may, and upon the direction of the Lease Indenture Trustee (to be given at the direction of the Holders of not less than 5% in aggregate principal amount of the Lessor Bonds outstanding of all series, considered as one class) or the Owner Trustee, shall promptly, commence and diligently pursue all steps requisite to deliver to the Lease Indenture Trustee, among other things, (a) a duly executed assumption agreement of the Company (and, if applicable, any of its Affiliates), (b) an opinion of counsel as to, among other things, compliance with the conditions of the assumption (including the obtainment of any necessary governmental actions), (c) an indenture supplemental to the Lease Indenture that, among other things, confirms the release of the Owner Trustee and contains provisions amending the Lease Indenture to delete references to the Lease and to reflect the fact that the obligations of the Owner Trustee have been assumed by the Company (and, if applicable, such Affiliate), (d) a certificate of responsible officers of the Company (and, if applicable, such Affiliate) to the effect that (i) to the best of such officers' knowledge, no Lease Indenture Default or Lease Indenture Event of Default has occurred and is continuing, (ii) such assumption is permitted by the provisions of the Company's (and, if applicable, such Affiliate's) articles of incorporation and by-laws (or similar corporate documents) and (iii) the Company (and, if applicable, such Affiliate) is not insolvent at the time of such assumption and (e) a certificate of a responsible officer of the Owner Trustee to the effect that, to the best of such officer's knowledge, no Lease Indenture Default or Lease Indenture Event of Default has occurred and is continuing (Lease Indenture, Section 2.16); provided, however, that, upon the occurrence of a Special Transfer, the Company, without further act, will be deemed to have assumed the obligation, and will be obligated to pay the principal of and premium, if any, and interest on the Lessor Bonds, notwithstanding (x) the Lessor's coextensive obligation to pay the principal of and premium, if any, and interest on the Lessor Bonds (which shall continue until the documents listed above have been delivered to the Lease Indenture Trustee) or (y) any provision of any transaction document to the contrary. (Participation Agreement, Section 15(d)(4)) Upon satisfaction of the conditions and payment of the amounts described in the preceding paragraph, the Lessor is required to transfer title to the Undivided Interest to the Company as directed by the Company (or an Affiliate of the Company), subject to the lien of the Lease Indenture. (Lease, Sections 9(c) and (d)) If the Company makes the payments to the Owner Participant as described above upon the occurrence of an Event of Loss, Deemed Loss Event, Financial Event or Lease Event of Default, but has not yet delivered the documents listed in the second preceding paragraph, then the Owner Participant must make a Special Transfer. (Participation Agreement, Section 15(d)) Any of the following events will constitute "Events of Loss": (a) a final shutdown of Unit 3 which could result from any of several events, including, and in some cases, subject to certain grace periods, certain NRC licensing problems with respect to Unit 3, direction by the NRC or other governmental authority to suspend operation of Unit 3 for reasons of radiological health and safety for a period exceeding or reasonably expected (in the opinion of an independent expert) to exceed 24 consecutive months, cessation of operation of Unit 3 for such period if resumption of operation would require concurrence of the NRC or other governmental authority, the occurrence of certain Nuclear Incidents (as defined in the Atomic Energy Act) with respect to Unit 3 as a result of which Unit 3 ceases to operate for a period exceeding or reasonably expected (in the opinion of an independent expert) to exceed 18 consecutive months, damage to Unit 3 and failure to restore Unit 3 within the shorter of three years or the period from the occurrence of such damage until the end of the Lease term, the destruction of Unit 3, or a declaration by the NRC that an Extraordinary Nuclear Occurrence (as defined in the Atomic Energy Act) has occurred with respect to Unit 3; (b) a requisition of title of Unit 3 or the Undivided Interest or certain shared facilities or the site of Unit 3 by a governmental authority for a period of time which exceeds or is reasonably expected to exceed the shorter of 60 months and the remaining Lease term, subject to certain contest rights of the Company; or (c) a requisition of the use of Unit 3 or the Undivided Interest or certain shared facilities or the site of Unit 3 by a governmental authority, other than a requisition of title, which would significantly interfere with the use of Unit 3 or the Undivided Interest, and which requisition is for a period of time which exceeds or is reasonably expected to exceed the shorter of 60 months and the remaining Lease term, subject to certain contest rights of the Company. (Participation Agreement, Appendix A) Any of the following events will constitute "Deemed Loss Events": (a) the Lessor or Owner Participant becoming subject to adverse regulation as a public utility solely as a result of the Transaction; (b) certain changes and/or new interpretations by a governmental authority regarding applicable law, including the Price-Anderson Act, the Atomic Energy Act, the Nuclear Waste Act or NRC regulations, as a result of which (i) the Lessor or Owner Participant would more likely than not become liable or responsible in any capacity for payments owed in respect of the nuclear waste fund or in respect of, among other things, the handling or disposal of nuclear waste and other radioactive or hazardous materials or (ii) the Lessor or the Owner Participant may be prohibited from asserting the limitation on liability of lessors provided by the 1988 amendments to the Price-Anderson Act or is more likely than not to be prohibited from asserting any other material right, protection or defense available under applicable law as of the date of closing of the Transactions with respect to civil or criminal actions brought in connection with a nuclear incident; (c) the Lessor or Owner Participant more likely than not being required to become a licensee under the Atomic Energy Act or otherwise subject to the Atomic Energy Act or otherwise subject to NRC or other significant regulation relating to nuclear energy, environmental or safety matters solely as a result of the Transaction; or (d) any governmental action or change in applicable law the effect of which is more likely than not to (i) cause the Lessor or Owner Participant to become liable with respect to the decommissioning of Unit 3 or (ii) constitute an assertion that (x) the exercise of certain rights of the Lessor or Owner Participant would constitute impermissible control over Unit 3 or the licensees of Unit 3 or would violate certain NRC or Atomic Energy Act regulations or (y) the acquisition or transfer of the Undivided Interest would violate other provisions of applicable law. (Participation Agreement, Appendix A) Any of the following events will be deemed "Financial Events" if it remains not cured following expiration of any applicable notice or cure period (there being no such notice or cure period in the case of the events described in clauses (f) and (g) below) and if the Company shall not have timely provided the Owner Participant with a letter of credit: (a) the Company shall have failed to maintain, as of the end of any fiscal quarter, total equity capital (including preferred stock) at least equal to 30% of the sum of total capitalization plus certain short-term debt; (b) the Company shall have failed to maintain, in respect of the twelve- month period ending on the last day of any fiscal quarter, a fixed charge coverage ratio of at least 1.50; (c) except for certain permitted transactions, the Company shall have sold, assigned, or otherwise disposed of any substantial part of its assets other than in the ordinary course of business without the prior approval of the Owner Participant, provided that the event described in this clause (c) will not constitute a Financial Event if the Company has delivered first mortgage bonds to the Owner Participant (see "Other Agreements _ Participation Agreement"); (d) the Company shall have merged with or into or consolidated with or into any other corporation or entity in violation of certain conditions without the prior approval of the Owner Participant; (e) the Company shall have created, assumed or suffered to exist liens (except for certain permitted liens) upon its assets; (f) subject to certain exceptions, the acceleration of certain indebtedness of the Company for borrowed money or default in payment of such indebtedness at maturity, if the total of all such indebtedness so accelerated or defaulted exceeds $10,000,000; (g) the occurrence of any of the events described in clause (e) under "Description of the Leases_Lease Events of Default"; (h) certain events relating to termination of certain of the Company's pension plans; or (i) Entergy shall cease to own, directly or indirectly, all of the common stock equity and all of the voting stock of the Company or its permitted successors (other than preferred stock that has only limited voting rights upon default in the payment of dividends). In general, the cure periods in respect of Financial Events of the type other than those described in clauses (f) and (g) above are 365 days. (Participation Agreement, Appendix A) The Company (or the Company and one of its Affiliates) may, at its option, but is not required to, assume all or a portion of the Lessor Bonds if it chooses to exercise any of certain purchase options described under "Description of the Leases _ Purchase Option for Significant Expenditures" or "_Periodic Purchase Option" or under "Other Agreements _ Participation Agreement." Any such assumption would be conditioned upon the prior delivery to the Lease Indenture Trustee of certain documents as described under "_Assumption by the Company." (See Lease Indenture, Section 2.16(b); Lease, Sections 13(f) and (g); and Participation Agreement, Section 16(d)) Defeasance The Lessor Bonds of any series, or any portion of the principal amount thereof, will, at or prior to the maturity thereof, be deemed to have been paid for purposes of the Lease Indenture, and the entire indebtedness of the Owner Trustee (or other obligor thereon) in respect thereof will be deemed to have been satisfied and discharged, if there shall have been irrevocably deposited with the Lease Indenture Trustee, in trust, either (a) moneys in an amount which will be sufficient, or (b) Federal Securities (as defined below), which do not contain provisions permitting the redemption or other prepayment thereof at the option of the issuer thereof, the principal of and the interest on which when due, without any regard to reinvestment thereof, will provide moneys which, together with the moneys, if any, deposited with or held by the Lease Indenture Trustee, will be sufficient, to pay when due the principal of and premium, if any, and interest due and to become due on such Lessor Bonds on and prior to the maturity thereof. For this purpose, the term "Federal Securities" is defined as direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America or certificates of an ownership interest in the principal of or interest on such obligations. (Lease Indenture, Section 11.01) Releases The Lease Indenture Trustee will release from the lien of the Lease Indenture any property subject to the lien thereof which is taken by any governmental authority pursuant to a power of eminent domain or other right to acquire such property (whether or not such taking constitutes an Event of Loss) upon its receipt of, among other things, a written request from the Owner Trustee or the Company requesting such release and the net proceeds of any property so taken. (Lease Indenture, Section 13.01) Subject to the following paragraph, the Owner Trustee or, with the Owner Trustee's consent, the Company, may obtain the release from the lien of the Lease Indenture of the Owner Trustee's interest in any component of Unit 3 the removal of which would not materially impair the operating capacity, cost efficiency or value of Unit 3, and the Lease Indenture Trustee will release from the lien of the Lease Indenture its interest in any such component upon its receipt of, among other things, a written request from the Owner Trustee or the Company requesting such release and a certificate of an engineer or other expert (who in certain cases will be required to be independent of the Owner Trustee and the Company and any Affiliate of either thereof) certifying (x) the value of the property to be released and (y) that, in the opinion of such expert, the proposed release will not impair the security under the Lease Indenture in violation of the provisions thereof. (Lease Indenture, Section 13.02) In addition to the release provisions described above, the Owner Trustee or, with the Owner Trustee's consent, the Company, may sell or otherwise dispose of, free from the lien of the Lease Indenture and without obtaining any release or other consent from the Lease Indenture Trustee, the Owner Trustee's interest in any components of Unit 3 which have become obsolete or otherwise permanently no longer useful for the operation of Unit 3. All replacement components incorporated in Unit 3 will, to the extent of the Owner Trustee's interest therein, immediately become subject to the lien of the Lease Indenture. (Lease Indenture, Section 13.03) Supplemental Indentures Without the consent of the Holders of any Lessor Bonds, the Owner Trustee and the Lease Indenture Trustee may enter into supplemental indentures for the following purposes: (a) to establish the form and terms of Lessor Bonds of any series; (b) to evidence the succession of another bank or trust company to the Owner Trustee and the assumption by any such successor of the covenants of the Owner Trustee contained in the Lease Indenture and in the Lessor Bonds or the appointment of a co-trustee pursuant to the terms of the Trust Agreement; (c) to evidence the succession of a new trustee or the appointment of a co-trustee or a separate trustee under the Lease Indenture; (d) to grant or confer upon the Lease Indenture Trustee for the benefit of the Holders any additional rights, remedies, powers, authority or security which may be lawfully so granted or conferred and which grant or conferral is not contrary to or inconsistent with the Lease Indenture; (e) to add to the covenants of the Owner Trustee for the benefit of the Holders or to evidence the surrender of any right or power conferred in the Lease Indenture upon the Owner Trustee; (f) to convey, transfer and assign to the Lease Indenture Trustee, and to subject to the lien of the Lease Indenture, additional properties or assets, or to correct or amplify the description of any property at any time subject to the lien of the Lease Indenture or to assure, convey and confirm unto the Lease Indenture Trustee any property subject or required to be subject to the lien of the Lease Indenture; (g) to modify, eliminate or add to the provisions of the Lease Indenture to the extent necessary to qualify or continue the qualification of the Lease Indenture (including any supplemental indenture) under the Trust Indenture Act, or under any similar federal statute subsequently enacted, or to add to the Lease Indenture such other provisions as may be expressly permitted by that Act; (h) to permit or facilitate the issuance of Lessor Bonds in uncertificated form; (i) to change or eliminate any provision of the Lease Indenture; provided, however, that if such change or elimination will adversely affect the interests of the Holders of Lessor Bonds of any series, such change or elimination will become effective with respect to such series only when no Lessor Bond of such series remains outstanding; (j) to evidence an assumption by the Company of the Lessor Bonds, and the release of the Owner Trustee from its obligations thereon, and to make the related changes in the Lease Indenture; (k) to cure any ambiguity or to correct or supplement any provision in the Lease Indenture which may be defective or inconsistent with any other provision in the Lease Indenture; or (l) to make any other provisions with respect to matters or questions arising under the Lease Indenture, provided such action shall not adversely affect the interests of the Holders of the Lessor Bonds in any material respect. (Lease Indenture, Section 10.01) Subject to the foregoing paragraph, with the consent of the Holders of not less than a majority in aggregate principal amount of the outstanding Lessor Bonds of all series, considered as one class, the Owner Trustee may, and the Lease Indenture Trustee shall, enter into supplemental indentures for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Lease Indenture; provided that if there is more than one series of Lessor Bonds outstanding and if a proposed supplemental indenture directly affects the Holders of at least one, but not all, of such series, then only the consent of a majority in aggregate principal amount of the outstanding Lessor Bonds of all series so directly affected, considered as one class, will be required; and provided, further, that without the consent of the Holder of each outstanding Lessor Bond directly affected thereby no such supplemental indenture may: (a) change the stated maturity of the principal of, or any installment of interest on, or the date or circumstances of payment of premium, if any, on, any Lessor Bond, or reduce the principal amount thereof or the interest thereon or any premium payable upon the redemption thereof, or change the place of payment where, or the coin or currency in which, any Lessor Bond or the premium, if any, or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment of principal or interest on or after the stated maturity thereof (or, in the case of redemption, on or after the redemption date) or such payment of premium, if any, on or after the date such premium becomes due and payable or change the dates or amounts of payments to be made through the operation of the sinking fund in respect of such Lessor Bonds; (b) permit the creation of any lien prior to or, except with respect to additional series of Lessor Bonds issued in accordance with the Lease Indenture, equal to the lien of the Lease Indenture with respect to any of the Lease Indenture Estate, or deprive any Holder of the benefit of the lien of the Lease Indenture upon any part of the Lease Indenture Estate for the security of its Lessor Bonds; (c) reduce the percentage in principal amount of the outstanding Lessor Bonds, the consent of whose Holders is required for any supplemental indenture or for any waiver provided for in the Lease Indenture; (d) modify the order of priorities in which distributions of income and proceeds from the Lease Indenture Estate are to be made under the Lease Indenture; (e) modify the definitions of "Outstanding," "Lease Indenture Default" or "Lease Indenture Event of Default"; (f) modify any of the above provisions or the provisions of the Lease Indenture dealing with waivers of past defaults, except to increase the percentage of the Holders whose consent is required for certain action or to provide that certain other specified provisions of the Lease Indenture cannot be modified or waived without the consent of the Holder of each Lessor Bond affected thereby. (Lease Indenture, Section 10.02) Limitations on Amendments of Other Documents The Lease Indenture Trustee, without the consent of the Holders of any Lessor Bonds, (a) will, upon receipt of written instructions to such effect from the Company and the Owner Trustee, consent to amendments of or supplements to, or waivers of any provisions of, the Lease or any other transaction document included in the Lease Indenture Estate and (b) may join in the execution of amendments of or supplements to, or waivers of any provisions of, the Participation Agreement, in each case for the purpose of adding any provision to, or changing in any manner or waiving or eliminating any provisions of, any such transaction document; provided, however, that, without the consent of the Holders of not less than a majority in aggregate principal amount of the outstanding Lessor Bonds of all series, considered as one class, the Lease Indenture Trustee will not consent to any such amendment, supplement or waiver which amends or waives certain provisions of the Lease relating to, among other things, liens, the right of the Company to assign or sublease its rights and obligations under the Lease, certain Lease Events of Default or the exercise of remedies under the Lease; provided, further, that, without the consent of the Holders of the outstanding Lessor Bonds of all series, the Lease Indenture Trustee will not consent to any such amendment, supplement or waiver which will: (1) amend or waive certain provisions of the Lease relating to, among other things, the sufficiency of certain rental payments to provide funds at least equal to scheduled amounts payable on the Lessor Bonds, the "net lease" obligations of the Company thereunder and the Company's unconditional obligation to make basic rental and certain other payments under the Lease, the obligation of the Owner Trustee to redeem the Lessor Bonds in the event of an obsolescence termination of the Lease by the Company, or the Lease Event of Default occasioned by the failure of the Company to pay basic rent when due; (2) modify the definitions of "Lease Default" or "Lease Event of Default"; or (3) (A) release the Company from its obligation to pay basic rent, Casualty Value, Special Casualty Value or any payment required to be made by it pursuant to an exercise of remedies under the Lease or (B) reduce the amount or change the timing of any payments of basic rent, Casualty Value, Special Casualty Value or any payments required to be made by the Company pursuant to an exercise of remedies under the Lease so that such payments would be insufficient to pay the principal of, and interest on, the outstanding Lessor Bonds of all series when due. (Lease Indenture, Section 10.03) Limitation of Liability The Lessor Bonds will not be direct obligations of, or guaranteed by, the Company, any Owner Participant, or any institution or individual acting as Owner Trustee in its individual capacity. All payments to be made by the Owner Trustee under the Lease Indenture or on the Lessor Bonds will be made only from the Lease Indenture Estate or the income and proceeds received by the Lease Indenture Trustee therefrom. Neither the Owner Participant, the Lease Indenture Trustee nor the Owner Trustee in its individual capacity, will be liable to any Holder for any amounts payable on any Lessor Bonds or otherwise under the Lease Indenture. (Lease Indenture, Section 2.15) Additional Bonds The Lease Indenture permits the issuance of additional Lessor Bonds at any time or from time to time, subject to certain conditions, for cash in the original principal amount of such additional Lessor Bonds for the following purposes: (a) refunding a previously issued series of Lessor Bonds in whole or in part and providing funds for the payment of certain expenses incurred in connection therewith and/or (b) providing funds for all or any portion of the Owner Trustee's share of certain capital improvements to Unit 3. (Lease Indenture, Section 2.05) All of the Lessor Bonds issued and outstanding under the Lease Indenture will rank on a parity with each other and will as to each other be secured equally and ratably thereunder, without preference, priority or distinction of any thereof over any other by reason of difference in time of issuance or otherwise. (Lease Indenture. Section 2.03) DESCRIPTION OF THE LEASES The statements contained under this caption are intended to summarize the Leases as they relate to the Collateral Bonds; they do not purport to be complete and are qualified in their entirety by reference to the Leases, copies of which have been filed as exhibits to the Registration Statement of which this Prospectus is a part. Each Lease is an entirely separate lease but contains substantially the same terms and provisions as each other Lease. In the following summary, references to the Lease, the Lease Indenture, the Owner Participant, the Undivided Interest, the Lessor and the Lessor Bonds relate to each Lease. Term and Rentals The Lessor has acquired its Undivided Interest and has leased such interest of the Company pursuant to the Lease, which has a term expiring on July 1, 2017 unless earlier terminated or extended as described below. Basic rent is required to be paid by the Company under the Lease in immediately available funds on each January 2 and July 2, through July 2, 2017. (Lease, Sections 2(b) and 3(a)) The amount of basic rent payable under the Lease on each basic rent payment date will be calculated to be at least equal to the scheduled amount of principal of and interest then payable on all Lessor Bonds then outstanding. (Lease, Section 3(g)) Each payment of basic rent by the Company during such time as the Lease Indenture is in effect will be made to the Lease Indenture Trustee and applied first to the payment of principal and interest due from the Lessor on the Lessor Bonds. Except in the case of an acceleration of Lessor Bonds due to a continuing Lease Indenture Event of Default, the balance of any payments of basic rent under the Lease, after payment of the scheduled principal of and interest on the Lessor Bonds, will be distributed to the Owner Trustee on behalf of the Owner Participant, as beneficial owner of the trust which is the owner of the Undivided Interest. (Lease Indenture, Sections 3.01, 3.03 and 3.06) Net Lease The obligations of the Company under the Lease are those of a lessee under a "net lease", and the Company will be responsible under the Lease for paying all insurance premiums, operating and maintenance costs and all other similar costs associated with the Undivided Interest. Payments of rent under the Lease by the Company are to be made without counterclaim, set-off, defense, abatement, suspension or reduction except for certain rights of set-off the exercise of which would not reduce the amount of rent required to be paid by the Company to an amount insufficient to pay in full the principal of, premium, if any, and interest on the Lessor Bonds then due. (Lease, Section 4) Capital Improvements The Company may incur costs from time to time in connection with capital improvements to Unit 3. Certain of such costs, based on the Owner Trustee's proportionate interest in Unit 3, may be financed through a supplemental financing. (See "Description of the Lease Indentures _ Additional Bonds.") In the event of such a supplemental financing, the rent under the Lease will be increased to cover the additional debt service. In addition, the Owner Participant may elect to make an additional equity investment with respect to the cost of any capital improvements on terms to be agreed upon. (Lease, Section 8(f)) Rights to Assign or Sublease The Company is permitted to assign, sublease, encumber or transfer its rights and obligations under the Lease and other documents related to the Transactions subject to certain conditions, including that the Company remain the primary obligor on the Lease. (Lease, Section 11) Insurance The Company is required under the Lease to carry and maintain, with respect to the Undivided Interest, Unit 3 and the Unit 3 site, the insurance described below: (a) Provided that such insurance is commercially available at a commercially reasonable cost, "all-risk" property insurance (excluding flood and earthquake insurance) covering physical loss with respect to Unit 3; (b) Bodily injury and property damage liability insurance covering claims arising out of the ownership, operation, maintenance, condition or use of Unit 3; and (c) Nuclear liability insurance. With respect to each of the types of insurance described in (a) through (c) above, the Company is required to maintain such insurance in such amounts and with such terms as are consistent with the Company's normal practice, and in any event in such amounts and with such terms as are consistent with applicable law and prudent utility practice. The Company is also required to maintain supplier's and transporter's insurance and master workers policy coverages, in each case in amounts consistent with prudent utility practice and applicable law. In addition, subject to such insurance being commercially available at a commercially reasonable cost, the Company is further required to maintain replacement power insurance covering not less than 90 percent of the cost of replacing power, as reasonably estimated by the Company in the event of damage or destruction at the Unit 3 site. However, the Company shall not be required to maintain such replacement power coverage if the Company provides the Owner Participant with a letter of credit as described under "Other Agreements _ Participation Agreement." (Lease, Section 10) Proceeds of property insurance received by the Lessor or the Company as a result of the occurrence of an Event of Loss shall be applied in reduction of the Company's obligation to make payment of the excess of Casualty Value over the principal of and accrued interest on the Lessor Bonds to the Owner Participant with the balance, if any, of such proceeds to be paid to the Company, subject, however, to any priority allocation of such proceeds. (Lease, Section 9(g)) In general, the Lease Indenture Trustee and the Holders of the Lessor Bonds will have no rights in respect of the proceeds of property insurance except for the assignment (to the extent, if any, of amounts then due and owing in respect of the principal of and premium, if any, and interest on the Lessor Bonds) by the Owner Trustee to the Lease Indenture Trustee of the Owner Trustee's rights in respect of such proceeds received as a result of the occurrence of an Event of Loss. Purchase and Renewal Options at the End of the Lease Term The Company has the option under the Lease to purchase at fair market sales value the Lessor's Undivided Interest at the end of the term of the Lease, or to renew the Lease for one or more periods of three years, at a fair market rental value or, subject to receipt of a satisfactory appraisal which will address certain tax matters, to renew the Lease at the end of the initial Lease term at a fixed rate rental for a single period of at least two years. (Lease, Sections 12 and 13) If the Company does not give notice of its election to exercise the options to purchase the Undivided Interest or renew the Lease not earlier than five but not later than two years prior to the expiration of the Lease, the Lessor may, on at least one year's prior written notice, terminate the Lease on the date specified in the notice. Upon such termination, the Company must pay to the Lessor all basic rent then due or accrued, together with any other amounts then payable to the Owner Trustee, the Owner Participant and the Lease Indenture Trustee. On or prior to such termination, the Lessor would be required to deposit with the Lease Indenture Trustee cash in an amount equal to the unpaid principal amount of all Lessor Bonds outstanding on such date, and all premium, if any, and interest accrued or to accrue on and as of such termination. (Lease, Section 14(c)) Purchase Option for Significant Expenditures The Company has the option on any January 2 or July 2 on or after January 2, 2000 to terminate the Lease if the Company is planning or required to make any significant expenditure for certain types of capital improvements to Unit 3. On such January 2 or July 2, the Company must pay to the Lessor an amount equal to the higher of the fair market sales value of the Undivided Interest and Casualty Value determined as of such January 2 or July 2 together with any other amounts then payable to the Owner Trustee, the Owner Participant and the Lease Indenture Trustee and, assuming such payment, the Lessor would be required to transfer the Undivided Interest to the Company. If the Company has assumed all or a portion of the Lessor Bonds then outstanding, such amount shall be reduced by the principal amount of the Lessor Bonds so assumed. A "significant expenditure" is an expenditure with respect to certain capital improvements to Unit 3 which (i) for the period until and including September 28, 2009, shall have been reasonably estimated by the Company to exceed $250,000,000 (as such amount may be adjusted periodically in accordance with the Consumer Price Index) and (ii) for the period from the day next succeeding the last day of the period specified in clause (i) above until the end of the Lease term, shall have been reasonably estimated by the Company to exceed $100,000,000 (as such amount may be adjusted periodically in accordance with the Consumer Price Index). (Lease, Section 13(f)) Periodic Purchase Option The Company has the option on January 2 in each of the years 2000, 2005 and 2010 to terminate the Lease and to purchase the Undivided Interest. On such January 2, the Company must pay to the Lessor an amount equal to the higher of the fair market sales value of the Undivided Interest and Casualty Value determined as of such January 2 together with any other amounts then payable to the Owner Trustee, the Owner Participant and the Lease Indenture Trustee. If the Company has assumed all or a portion of the Lessor Bonds then outstanding, such amount shall be reduced by the principal amount of the Lessor Bonds so assumed. (Lease, Section 13 (g)) Termination for Obsolescence The Company has the option on any January 2 or July 2, on or after January 2, 2000, to terminate the Lease if the Company's Board of Directors determines that the Company's leasehold interest in the Undivided Interest is uneconomic or obsolete for the Company's purposes. In such event, the Lessor may elect to either retain the Undivided Interest or sell it to the highest bidder. On the Lease termination date, if the Lessor has not elected to retain the Undivided Interest, the Lessor will be required to sell the Undivided Interest to the highest bidder (which may not be either the Company or any Affiliate thereof) and the Company must pay to the Lessor an amount equal to the excess, if any, of Special Casualty Value as of the termination date over such net sale price, and any other amounts then payable to the Owner Trustee, the Owner Participant and the Lease Indenture Trustee; provided, however, that if the highest bid shall be less than Special Casualty Value, the Lessee may reject the bid, in which case no sale shall occur. If no such sale shall occur or if the Company shall not have fulfilled its obligations in respect of such termination, the Lease will continue in full force and effect. (Lease, Sections 14(a) and 14(b)) In the event of such a termination, the Lessor Bonds will be redeemed. (Lease Indenture, Section 5.02(a)) Lease Events of Default The following are Lease Events of Default: (a) the Company shall fail to make or cause to be made, (x) any payment of basic rent, Casualty Value, Special Casualty Value, or the payment of the equity portion of Casualty Value or Special Casualty Value or any other amount determined by reference to any of such amounts pursuant to any of the transaction documents, within five business days after the same shall become due or (y) any payment of supplemental rent (other than Casualty Value, Special Casualty Value, or the payment of the equity portion of Casualty Value or Special Casualty Value) including, without limitation, any payments due under the Tax Indemnification Agreement, within 20 days after the same shall become due or be demanded, as the case may be; or (b) the Company shall fail to perform or observe any covenant, condition or agreement to be performed or observed by it under the Participation Agreement relating to the maintenance of its corporate existence and maintenance of certain of its material rights and franchises, and the conditions under which it may merge, consolidate or dispose of all or substantially all of its assets, or to comply with the return or the assignment and sublease provisions of the Lease; or (c) the Company shall fail to perform or observe any covenant, condition or agreement (other than those referred to in clauses (a), (b), (f) and (h) of this paragraph) to be performed or observed by it under the Lease or any other transaction document (other than under the Tax Indemnification Agreement or under the general tax indemnity provisions of the Participation Agreement), and such failure shall continue for a period of 30 days after there shall have been given to the Company by the Lessor or the Owner Participant a notice specifying such failure and requiring it to be remedied; provided, however, that the continuation of such failure for a period of 30 days or more after such notice has been so given (but in no event for a period which is greater than one year after such notice has been given) shall not constitute a Lease Event of Default if (a) such failure can be remedied but cannot be remedied within such 30 days, (b) the Company is diligently pursuing a remedy of such failure and (c) such failure does not impair in any material respect the Company's ability to perform its obligations under any of the transaction documents to which the Company is a party, or the Lessor's interest in Unit 3 or the mortgage and security interest created by the Lease Indenture; or (d) any representation or warranty made by the Company in the Lease, any other transaction document (other than the Tax Indemnification Agreement) or any agreement, document or certificate delivered by the Company in connection with the Transactions shall prove to have been incorrect in any material respect when such representation or warranty was made or given if such representation or warranty continues to be material and remain materially incorrect at the time in question; provided, however, that such failure of such representation or warranty to be correct shall not constitute a Lease Event of Default if (i) the facts or circumstances making such representation or warranty incorrect can be remedied or changed so that such representation or warranty will thenceforth be correct in all material respects, (ii) the Company is diligently pursuing such a remedy or change, (iii) such remedy or change is, in fact, accomplished within a period of one year from the time that the Company has been notified or has knowledge of such misrepresentation or breach of warranty and (iv) such facts or circumstances do not impair in any material respect the Company's ability to perform its obligations under any of the transaction documents to which the Company is a party or the Lessor's interest in Unit 3 or the mortgage and security interest created by the Lease Indenture; or (e) (x) the Company shall (i) admit in writing its inability to, or be generally unable to, pay its debts as such debts become due, (ii) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under the United States Bankruptcy Code, (v) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or readjustment of debts, (vi) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the United States Bankruptcy Code, or (vii) take any corporate action for the purpose of effecting any of the foregoing; or (y) a proceeding or case shall be commenced, without the application or consent of the Company, in any court of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of the Company or of all or any substantial part of its assets, or (iii) similar relief in respect of the Company under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or readjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 or more days; or an order for relief against the Company shall be entered in an involuntary case under the United States Bankruptcy Code; or (f) if the Company shall theretofore have provided a letter of credit to the Owner Participant, the Company (A) shall fail, at any time, to provide or maintain a letter of credit which complies with the terms and conditions of the Participation Agreement, whether or not the Company has used its best efforts to obtain and maintain such letter of credit or (B) shall fail to provide a renewal or replacement letter of credit so complying (l) by the tenth day prior to the stated termination date of an existing letter of credit or (2) if the issuing bank of an existing letter of credit shall have delivered notice, in accordance with the terms thereof, that such existing letter of credit will be terminated prior to its stated termination date, by the tenth day prior to the date of such early termination; or (g) the occurrence and continuance of an event of default under any other lease, executed and delivered as of the same date as the Lease, under which the Company is the lessee of an undivided interest in Unit 3, and the declaration of such lease to be in default by any party thereto; or (h) any suspension, revocation or termination of the nuclear liability insurance required to be maintained under the Lease; provided, however, that such suspension, revocation or termination shall not constitute a Lease Event of Default if the applicable insurer has failed to comply with applicable notice termination provisions of the pertinent policy; and provided, further, that the foregoing proviso shall cease to apply upon the earlier of (x) five business days following receipt by the Company of actual notice of such suspension, revocation or termination or (y) the applicable termination date of such policy assuming that the insurer had complied with its notice obligations under the pertinent policy; or (i) any material obligation of the Company under the Lease or any other documents relating to the Transaction to which it is a party shall at any time for any reason cease to be valid and binding on the Company, or shall be declared to be null and void, or the validity or enforceability thereof shall be contested by the Company or any governmental agency or authority, or the Company shall assert that it has no further liability or obligation under the Lease or any other document relating to the Transactions to which it is a party; or (j) final judgment for the payment of money in excess of $10,000,000 shall be rendered against the Company and the Company shall not have discharged the same or provided for its discharge in accordance with its terms or bonded the same or procured a stay of execution thereof within 60 days from the entry thereof; or (k) the Company shall exercise, or commence any action or proceeding or take any action seeking to exercise, any rights it may have under Louisiana law to partition Unit 3. (Lease, Section 15) Remedies Upon the occurrence and continuance of any Lease Event of Default, a Lessor may exercise one or more of the remedies set forth in the Lease, which include the following: (a) the Lessor may declare the Lease to be in default or may terminate the Lease; (b) the Lessor may repossess the Undivided Interest; (c) the Lessor may sell the Undivided Interest or any part thereof; (d) the Lessor may hold, keep idle or lease to others all or any part of the Undivided Interest; (e) the Lessor may demand any unpaid rent plus, as liquidated damages, any of the following amounts which the Lessor, in its sole discretion, shall specify: (i) an amount equal to the excess of Casualty Value over the fair market rental value of the Undivided Interest until the end of the remaining useful life of Unit 3 (discounted to present value), (ii) an amount equal to the excess of Casualty Value over the fair market sales value of the Undivided Interest, (iii) an amount equal to the excess of the present value of all installments of basic rent until the end of the Lease term over the present value of the fair market rental value of the Undivided Interest until the end of such term, or (iv) an amount equal to the highest of Casualty Value, such discounted fair market rental value and such fair market sales value; and (f) if the Lessor shall have sold all the Undivided Interest pursuant to clause (c) above, the Lessor, in lieu of exercising its rights under clause (e) above may demand that the Company pay to the Lessor, as liquidated damages, any unpaid rent plus the amount of any deficiency between the sale proceeds and Casualty Value together with interest on the amount of such rent and such deficiency. The remedies in the Lease are cumulative and in addition to any other remedy available to the Lessor at law or in equity, and no exercise of any remedy under the Lease will, except as specifically provided therein, relieve the Company of any of its liabilities and obligations under the Lease. (Lease, Section 16) Quiet Enjoyment The transaction documents provide that, unless a Lease Event of Default has occurred and is continuing, the Company's use and possession of Unit 3, including the Undivided Interest, shall not be interrupted by the Lessor or any person claiming by, through or under the Lessor. (Lease, Section 6(a)) OTHER AGREEMENTS The discussion of the Participation Agreements and Tax Indemnification Agreements below is intended to merely summarize certain provisions of those agreements as they relate to the Collateral Bonds and the Transactions; it does not purport to be complete and is qualified in its entirety by reference to those agreements, copies of which have been filed as exhibits to the Registration Statement of which this Prospectus is a part. Participation Agreement In each Participation Agreement the Company has agreed, among other things, that it will at all times maintain its corporate existence and will not consolidate with or merge into, or sell, transfer or otherwise dispose of substantially all of its assets to, any person unless immediately after giving effect to such transaction a number of conditions are met, including the requirements that (a) the survivor be a corporation organized under the laws of the United States of America, a State thereof or the District of Columbia, (b) the survivor of such transaction assumes the obligations of the Company under each of the other documents relating to the Transactions to which the Company was a party, (c) such transaction does not permit the early termination of any letter of credit prior to its scheduled expiration date, (d) all governmental actions and corporate approvals have been obtained for the transaction, (e) the transaction will not result in a material violation of any provision of any agreement or financing arrangement to which the Company is a party, and (f) the survivor delivers to the Owner Participant, the Owner Trustee and the Lease Indenture Trustee opinions and officers' certificates as to, among other things, compliance with the transfer conditions above. (Participation Agreement, Section 9(b) (3)) Reference is also made to the discussion above under "Description of the Lease Indentures _ Assumption by the Company" for additional restrictions in respect of certain mergers, consolidations or sales of assets affecting the Company. Pursuant to each Participation Agreement, the Company provided the Owner Participant with financial support to secure the payment to the Owner Participant of the equity portion of amounts payable by the Lessee under the Lease and related documents in the form of a new series of first mortgage bonds issued under the Company's first mortgage indenture. Upon the occurrence of an Event of Loss, a Deemed Loss Event, a Financial Event or a Lease Event of Default under the related Lease, an Owner Participant would be entitled to demand payment on such first mortgage bonds in an amount generally not exceeding Casualty Value less the aggregate principal amount of and accrued interest on the related Lessor Bonds then outstanding. The Holders of the Lessor Bonds (including the Trustee, as holder of the Pledged Lessor Bonds) and Holders of the Collateral Bonds are not entitled to the benefit of such first mortgage bonds. As an alternative to the first mortgage bonds, the Company could supply such financial support in the form of a letter of credit issued by a commercial bank. Once a letter of credit has been provided to an Owner Participant, the Company will be required to provide a letter of credit for such Owner Participant for the remainder of the basic term of the related Lease. If a letter of credit were about to expire or be terminated prior to the scheduled expiration thereof, and the Company does not replace such letter of credit with another letter of credit issued by an eligible bank, the Company would have the right to purchase the related Undivided Interest from the related Lessor, thereby terminating the related Lease, at a price equal to the higher of fair market sales value and Casualty Value; provided, however, that if the Company had assumed all or a portion of the related Lessor Bonds then outstanding, the purchase price would be reduced by the principal amount of such Lessor Bonds then outstanding. (Participation Agreement, Section 16(d)) Subject to certain first refusal rights of the Company, any Owner Participant may at any time assign, convey or otherwise transfer its interest in, to and under any transaction document or its trust estate to a person with a net worth at the time of such transfer of not less than $50 million or to a person whose obligations under the transaction documents have been guaranteed by a person with such a net worth. The transferring Owner Participant will, with certain limited exceptions, be released from its obligations under the transaction documents and the transferee Owner Participant shall succeed to such obligations and rights of the transferring Owner Participant. (Participation Agreement, Section 14) Tax Indemnification Agreement Pursuant to separate Tax Indemnification Agreements for each Transaction between the Company and the Owner Participant, the Company is obligated to pay to the Owner Participant, among other things, amounts which, on an after-tax basis, equal the amounts of additional federal income taxes payable by the Owner Participant with respect to any current or prior taxable year as a result of a Tax Loss and any interest, penalties or additions to any tax imposed as a result of such Tax Loss or the contest thereof. For purposes of each Tax Indemnification Agreement, "Tax Loss" includes, subject to certain exceptions: (a) loss to the Owner Participant of depreciation or analogous deductions with respect to the related Undivided Interest or interest deductions with respect to the related Lessor Bonds; (b) loss to the Owner Participant of foreign tax credits due to the treatment of any item of income, gain, loss or deduction with respect to the related Transaction as derived from, or allocable to, foreign sources (in the case of either (a) or (b) as a result of, among other things, (i) any act or failure to act by the Company, (ii) any misrepresentation or breach of warranty or covenant in the transaction documents by the Company, (iii) bankruptcy of the Company or any disposition of the related Undivided Interest pursuant to the exercise of remedies under the related Indenture or (iv) damage to or the taking of the related Undivided Interest); or (c) unanticipated income of the Owner Participant with respect to the related Undivided Interest. PLAN OF DISTRIBUTION The Prospectus Supplement relating to a series of Collateral Bonds will set forth the terms of the offering of the Collateral Bonds, including the names of underwriters, including Morgan Stanley & Co. Incorporated and Citicorp Securities, Inc., the proceeds to Funding Corporation from such sale, any items constituting underwriters' compensation, any initial public offering price and any discounts or concessions allowed or reallowed to dealers. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. The Collateral Bonds will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of each resale. Unless otherwise set forth in the Prospectus Supplement, the obligations of the underwriters to purchase the Collateral Bonds will be subject to certain conditions precedent, and the underwriters will be obligated to purchase all such Collateral Bonds if any are purchased; provided that the agreement between the Company and the underwriters providing for the sale of the Collateral Bonds may provide that under certain circumstances involving a default of underwriters, less than all of the Collateral Bonds may be purchased. Each Prospectus Supplement relating to a particular offering of Collateral Bonds will contain a statement (1) as to whether or not the existence of a secondary market for such securities can be predicted and, if such existence is predicted, as to the extent of such secondary market, and (2) as to whether or not the underwriter or underwriters intend to make a market in such securities. Subject to certain conditions, the Company may agree to indemnify the underwriter or underwriters and their controlling persons against certain civil liabilities, including liabilities under the Securities Act of 1933, as amended. EXPERTS AND LEGALITY The Company's balance sheet as of December 31, 1994 and the statements of income, retained earnings, and cash flows and the related financial statement schedule for the year ended December 31, 1994, incorporated by reference in this Prospectus, have been incorporated by reference herein in reliance on the reports of Coopers & Lybrand L.L.P., independent accountants, given on the authority of that firm as experts in accounting and auditing. The financial statements and the related financial statement schedule as of December 31, 1993 and for each of the two years in the period ended December 31, 1993, incorporated in this Prospectus by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1994, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports dated February 11, 1994 (which reports expressed an unqualified opinion and included an explanatory paragraph relating to the Company's change in method of accounting for income taxes) also incorporated by reference herein, and have been so included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. Legal matters in connection with the issuance of the Collateral Bonds will be passed upon for the Company by Monroe & Lemann (A Professional Corporation), New Orleans, Louisiana, and Reid & Priest LLP, New York, New York, and for the underwriters by Winthrop, Stimson, Putnam & Roberts, New York, New York. In rendering such opinions, Reid & Priest LLP and Winthrop, Stimson, Putnam & Roberts will rely upon the opinion of Monroe & Lemann (A Professional Corporation) as to matters of Louisiana law, and Monroe & Lemann (A Professional Corporation) will rely upon the opinion of Reid & Priest LLP as to matters of New York law. Certain matters with respect to the legality of the Lessor Bonds will be passed upon for the Owner Trustee by Haight, Gardner, Poor & Havens, New York, New York, and by Liskow & Lewis, New Orleans, Louisiana. GLOSSARY Certain capitalized terms used in this Prospectus and the accompanying Prospectus Supplement have the following meanings and such meanings shall apply to terms both singular and plural unless the context clearly requires otherwise: "Affiliate" means with respect to the Company any other person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Company. For purposes of this definition, the term "control" (including the correlative meanings of the terms "controlled by" and "under common control with"), as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such person, whether through the ownership of voting securities or by contract or otherwise. "Atomic Energy Act" means the Atomic Energy Act of 1954, as amended, and regulations from time to time issued, published or promulgated pursuant thereto. "Casualty Value" means an amount specified in each Lease which the Company must pay to the Lessor under such Lease in certain circumstances, which amount is, in general and among other things, calculated to preserve the net economic return of the related Owner Participant. "Collateral Bonds" mean bonds offered by this Prospectus. "Company" means Louisiana Power & Light Company. "Deemed Loss Event" means any of the events described as a Deemed Loss Event in each Lease upon the occurrence of which the Company must (subject to certain conditions) acquire the beneficial interest of the related Owner Participant and/or assume the related Lessor Bonds. (See "Description of the Lease Indentures _ Assumption by the Company.") "Event of Loss" means any of the events described as an Event of Loss in each Lease upon the occurrence of which the Company must (subject to certain conditions) acquire the beneficial interest of the Owner Participant and/or assume the related Lessor Bonds. (See "Description of the Lease Indentures _ Assumption by the Company.") "Excepted Payment" means (i) any indemnity payment (including payments under the Tax Indemnification Agreement) payable to the Owner Trustee or the Owner Participant, (ii) any amount payable under any transaction document to reimburse the Lessor or the Owner Participant for performing or complying with any of the obligations of the Company under and as permitted by any transaction document, (iii) any insurance proceeds or other payments received with respect to an Event of Loss in excess of amounts then due and owing to reimburse the Lease Indenture Trustee for any of its expenses and to pay the reasonable remuneration of the Lease Indenture Trustee plus amounts then due and owing in respect of the principal of and premium, if any, and interest on all Lessor Bonds outstanding, (iv) any insurance proceeds under liability policies, replacement power insurance policies and insurance policies not required by the Lease, (v) any payment of the equity portion of Casualty Value or Special Casualty Value in respect of an Event of Loss, Deemed Loss Event or Financial Event, (vi) amounts payable to the Owner Trustee in connection with the exercise by the Company of its option to purchase the Undivided Interest during the term of the Lease (subject, in any event, to the condition that the Company shall have assumed all of the Lessor Bonds then outstanding and none of such Lessor Bonds are then to be redeemed), (vii) if a letter of credit has been terminated or has expired, the portion, if any, of Casualty Value or Special Casualty Value (before taking into account the effect of certain drawings on such letter of credit) equal to the amount by which Casualty Value, reduced by the principal amount of and accrued interest on the outstanding Lessor Bonds, exceeds the sum of all amounts drawn under such letter of credit and not reinstated, (viii) any amount payable to the Owner Participant by any transferee as the purchase price of the Owner Participant's interest in the trust estate, (ix) the ongoing fees and expenses of the Owner Trustee under the transaction documents and (x) any payments in respect of interest to the extent attributable to payments referred to in clauses (i) through (vii) above. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Financial Event" means any of the events described as a Financial Event in each Lease upon the occurrence of which the Company must (subject to certain conditions) acquire the beneficial interest of the related Owner Participant and/or assume the related Lessor Bonds. (See "Description of the Lease Indentures _ Assumption by the Company.") "Funding Corporation" means W3A Funding Corporation, a Delaware corporation. "Holder", as used in "Description of the Collateral Bonds and the Indenture," means the registered holder of Securities, as indicated on the Security Register maintained under the Indenture, and, as used in "Description of the Lease Indentures," means the registered holder of Lessor Bonds under a Lease Indenture, as indicated on the Bond Register maintained under such Lease Indenture. "Indenture" means the Collateral Trust Indenture, among Funding Corporation, the Company and the Trustee, as supplemented and amended, pursuant to which the Collateral Bonds are issued. "Initial Lessor Bonds" means Waterford 3 Secured Lease Obligation Bonds issued in 1989 by the respective Lessors as three separate issues under three separate Lease Indentures, each issue comprised of a series maturing in 2005 and a series maturing in 2017. "Lease" means each Facility Lease, dated as of September 1, 1989, as supplemented, under which the Company leases an Undivided Interest in Unit 3 from a Lessor in connection with the Transactions. "Leases" means each and every Lease. "Lease Default" means an event or condition which, with the giving of notice or lapse of time, or both, would constitute a Lease Event of Default. "Lease Event of Default" means an Event of Default as such term is defined under a Lease. (See "Description of the Leases _ Lease Events of Default.") "Lease Indenture" means each Indenture of Mortgage and Deed of Trust, dated as of September 1, 1989, as supplemented, between a Lessor and the Lease Indenture Trustee, pursuant to which the Lessor Bonds are issued. "Lease Indentures" means each and every Lease Indenture. "Lease Indenture Default" means an event or condition which, with the giving of notice or the lapse of time, or both, would constitute a Lease Indenture Event of Default. "Lease Indenture Estate" means the trust estate assigned, transferred and pledged by a Lessor to the related Lease Indenture Trustee under its Lease Indenture, for the ratable benefit of the holders of the Lessor Bonds issued thereunder. "Lease Indenture Event of Default" means an "Indenture Event of Default" as defined in a Lease Indenture. (See "Description of the Lease Indentures _ Lease Indenture Events of Default.") "Lease Indenture Trustee" means each institution and/or individual acting as an indenture trustee under each of the Lease Indentures. "Lease Indenture Trustees" means each and every Lease Indenture Trustee. "Lessor" means any institution and/or individual acting as Owner Trustee under a trust agreement with an Owner Participant and as Lessor under a Lease and which, in such capacity, has purchased an Undivided Interest in Unit 3 as part of the Transactions. "Lessors" means each and every Lessor. "Lessor Bonds" means the non-recourse bonds issued by a Lessor under its Lease Indenture. "NRC" means the Nuclear Regulatory Commission of the United States of America or any successor agency. "Nuclear Waste Act" means the Nuclear Waste Policy Act of 1982, as amended, or any comparable successor law. "Owner Participant" means a corporation which, in connection with the Transactions, has acquired a beneficial interest in the owner trust which is the owner and Lessor of an Undivided Interest. "Owner Trustee" means each institution and/or individual acting as owner trustee under a trust agreement with an Owner Participant in connection with the Transactions. "Participation Agreement" means each Participation Agreement, dated as of September 1, 1989, as amended, entered into among the Company, Funding Corporation, the Owner Participant, a Lessor, a Lease Indenture Trustee and the Trustee, which relates to a Transaction and sets forth the terms and conditions upon which a Transaction will be consummated. "Participation Agreements" mean each and every Participation Agreement. "Pledged Lessor Bonds" means the Lessor Bonds which are pledged by Funding Corporation to Trustee as security for Securities (including the Collateral Bonds). "Price-Anderson Act" means the Price-Anderson Act (1957), as amended. "Refinancing" means the series of transactions pursuant to which the Initial Lessor Bonds will be refinanced. "Responsible Officer" shall mean, with respect to the subject matter of any covenant, agreement or obligation of any party contained in any Transaction Document, the President, any Vice President, Assistant Vice President, Account Officer, Treasurer, Assistant Treasurer or any other officer who in the normal performance of his operational responsibility would have knowledge of such matter and the requirements with respect thereto. "SEC" means Securities and Exchange Commission. "Securities" means bonds, notes or other evidences of indebtedness which may be issued under the Indenture. "Special Casualty Value" means an amount specified in each Lease which the Company must pay to the Lessor under such Lease in certain circumstances, which amount is, in general and among other things, calculated to preserve the net economic return of the related Owner Participant. "Special Transfer" means the assignment and transfer by an Owner Participant of its beneficial interest in the related owner trust to the Company or its designee upon the occurrence of an Event of Loss, a Deemed Loss Event, Financial Event or a Lease Event of Default. "Supplemental Financing" means the issuance of additional Lessor Bonds under a Lease Indenture to finance the related Lessor's proportionate share of capital improvements to Unit 3. "Supplemental Indenture" means a supplemental indenture to the Indenture, among Funding Corporation, the Company and the Trustee. "Tax Indemnification Agreement" means each tax indemnification agreement dated as of September 1, 1989, as amended, between the Company and an Owner Participant. "Transaction" means any of the three transactions pursuant to which the Company sold the Undivided Interests in Unit 3 to the Lessors under three separate owner trust agreements and leased back such interests pursuant to three separate Leases. "Transactions" refers to all of such transactions. "Trustee" means Bankers Trust Company, trustee under the Indenture. "Undivided Interest" means any of the three undivided interests in Unit 3, which interests compose in aggregate an approximate 10.5% interest in Unit 3 (as defined) (which is equivalent on a cost basis to an approximate 9.3% interest in Waterford 3) and each of which undivided interest was sold by the Company to the Owner Trustee under three separate owner trust agreements with the Owner Participant, and then leased back to the Company on a long-term net lease basis. "Unit 3" means Waterford 3, exclusive of certain transmission, pollution control and other facilities, together with certain capital improvements thereto. "Waterford 3" means Unit No. 3 (nuclear) of the Waterford Steam Electric Generating Station. PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. Filing Fees _ Securities and Exchange Commission: Registration Statement $111,216 Application - Declaration 2,000 *Rating Agencies' fees 100,000 *Trustees' fees 30,000 *Fees of Company's Counsel: Monroe & Lemann (A Professional Corporation 25,000 Reid & Priest LLP 200,000 *Fees of Underwriters' Counsel 100,000 *Fees of Entergy Services, Inc. 50,000 *Accountants' fees 20,000 *Printing and engraving costs 75,000 *Miscellaneous expense (including blue-sky expense) 36,784 *Total Expenses $750,000 * Estimated Item 15. Indemnification of Directors and Officers. The Company has insurance covering its expenditures which might arise in connection with its lawful indemnification of its directors and officers for certain of their liabilities and expenses. Directors and officers of the Company also have insurance which insures them against certain other liabilities and expenses. The corporation laws of Louisiana permit indemnification of directors and officers in a variety of circumstances, which may include liabilities under the Securities Act of 1933, as amended ("Securities Act"), and, under the Company's Restated Articles of Incorporation, as amended, its officers and directors may generally be indemnified to the full extent of such laws. Item 16. List of Exhibits* 1(a) _ Form of Underwriting Agreement among the Company, Funding Corporation and the Underwriters. 4(a) _ Form of Collateral Trust Indenture among Funding Corporation, the Company and Bankers Trust Company, as Trustee. 4(b) _ Form of Supplemental Indenture No. 1 to Collateral Trust Indenture. **4(c)-1 _ Indenture of Mortgage and Deed of Trust No. 1 among the Owner Trustee, the Company and Bankers Trust Company and Stanley Burg as Indenture Trustee ("Indenture No. 1") (filed as Exhibit 4(a)-1 to Registration Statement No. 33- 30660). **4(c)-2 _ Indenture of Mortgage and Deed of Trust No. 2 among the Owner Trustee, the Company and Bankers Trust Company of California, National Association, and Cecil D. Bobey as Indenture Trustee ("Indenture No. 2") (filed as Exhibit 4(a)-2 to Registration Statement No. 33- 30660). **4(c)-3 _ Indenture of Mortgage and Deed of Trust No. 3 among the Owner Trustee, the Company and Security Pacific National Trust Company (New York) and Kenneth T. McGraw as Indenture Trustee ("Indenture No. 3") (filed as Exhibit 4(a)-3 to Registration Statement No. 33-30660). **4(d)-1 _ Supplemental Indenture No. 1 to Indenture No. 1 (filed as Exhibit A-2(b)(1) to Rule 24 Certificate in File No. 70-7653). **4(d)-2 _ Supplemental Indenture No. 1 to Indenture No. 2 (filed as Exhibit A-2(b)(2) to Rule 24 Certificate in File No. 70-7653). **4(d)-3 _ Supplemental Indenture No. 1 to Indenture No. 3 (filed as Exhibit A-2(b)(3) to Rule 24 Certificate in File No. 70-7653). 4(d)-4 _ Form of Supplemental Indenture No. 2 to Lease Indenture. **4(e)-1 _ Facility Lease No. 1 between the Owner Trustee, as Lessor, and the Company, as Lessee (filed as Exhibit 4(c)-1 to Registration Statement No. 33-30660). **4(e)-2 _ Facility Lease No. 2 between the Owner Trustee, as Lessor, and the Company, as Lessee (filed as Exhibit 4(c)-2 to Registration Statement No. 33-30660). **4(e)-3 _ Facility Lease No. 3 between the Owner Trustee, as Lessor, and the Company, as Lessee (filed as Exhibit 4(c)-3 to Registration Statement No. 33-30660). 4(e)-4 _ Form of Lease Supplement No. 1 to Facility Lease. **4(f)-1 _ Participation Agreement No. 1 among the Owner Participant, the Owner Trustee, the Company and Bankers Trust Company and Stanley Burg as Indenture Trustee (filed as Exhibit 4(d)-1 to Registration Statement No. 33-30660). **4(f)-2 _ Participation Agreement No. 2 among the Owner Participant, the Owner Trustee, the Company and Bankers Trust Company of California, National Association, and Cecil D. Bobey as Indenture Trustee (filed as Exhibit 4(d)-2 to Registration Statement No. 33-30660). **4(f)-3 _ Participation Agreement No. 3 among the Owner Participant, the Owner Trustee, the Company and Security Pacific National Trust Company (New York) and Kenneth T. McGraw as Indenture Trustee (filed as Exhibit 4(d)-3 to Registration Statement No. 33-30660). 4(f)-4 _ Form of Amendment No. 1 to Participation Agreement. **4(g)-1 _ Facilities Agreement No. 1 between the Company and the Owner Trustee (filed as Exhibit 4(e)-1 to Registration Statement No. 33-30660). **4(g)-2 _ Facilities Agreement No. 2 between the Company and the Owner Trustee (filed as Exhibit 4(e)-2 to Registration Statement No. 33-30660). **4(g)-3 _ Facilities Agreement No. 3 between the Company and the Owner Trustee (filed as Exhibit 4(e)-3 to Registration Statement No. 33-30660) **4(h)-1 _ Ground Lease No. 1 between the Company and the Owner Trustee (filed as Exhibit 4(f)-1 to Registration Statement No. 33- 30660). **4(h)-2 _ Ground Lease No. 2 between the Company and the Owner Trustee (filed as Exhibit 4(f)-2 to Registration Statement No. 33- 30660). **4(h)-3 _ Ground Lease No. 3 between the Company and the Owner Trustee (filed as Exhibit 4(f)-3 to Registration Statement No. 33- 30660). **4(i)-1 _ Tax Indemnification Agreement No. 1 between the Owner Participant and the Company (filed as Exhibit 4(g)-1 to Registration Statement No. 33-30660). **4(i)-2 _ Tax Indemnification Agreement No. 2 between the Owner Participant and the Company (filed as Exhibit 4(g)-2 to Registration Statement No. 33-30660). **4(i)-3 _ Tax Indemnification Agreement No. 3 between the Owner Participant and the Company (filed as Exhibit 4(g)-3 to Registration Statement No. 33-30660). 4(i)-4 _ Form of Amendment No. 1 to Tax Indemnification Agreement. **4(j) _ Ownership and Operating Agreement between the Company and the Owner Trustee (filed as Exhibit 4(h)-1 to Registration Statement No. 33-30660). 4(k) _ Form of Refunding Agreement among Owner Participant, Owner Trustee, Lease Indenture Trustee and the Company. 5(a) _ Opinion of Reid & Priest LLP, counsel for the Company. 5(b) _ Opinion of Monroe & Lemann (A Professional Corporation), counsel for the Company. 12 _ Company's Computation of Ratio of Earnings to Fixed Charges. 23(a) _ Consent of Reid & Priest LLP (included in Exhibit 5(a)). 23(b) _ Consent of Monroe & Lemann (A Professional Corporation) (included in Exhibit 5(b)). 23(c) _ Consent of Deloitte & Touche LLP is contained herein at page II-8. 23(d) _ Consent of Coopers & Lybrand L.L.P. is contained herein at page II-9. 24 _ A Power of Attorney is contained herein at page II-6. 25(a) _ Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Bankers Trust Company, Trustee. *Reference is made to a duplicate list of exhibits filed as part of this Registration Statement, which list, prepared in accordance with Item 102 of Regulation S-T of the Securities and Exchange Commission, immediately precedes the exhibits being filed with this Registration Statement. **Incorporated herein by reference as indicated. Item 17. Undertakings. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post- effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that (i) and (ii) do not apply if the information required to be included in a post-effective amendment is contained in periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (5) That, for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (6) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. Exhibit 24 POWER OF ATTORNEY Each director and/or officer of the registrant whose signature appears below hereby appoints Gerald D. McInvale, William J. Regan, Jr., and Laurence M. Hamric, and each of them severally, as his attorney-in-fact to sign in his name and behalf, in any and all capacities stated below, and to file with the Securities and Exchange Commission, any and all amendments, including post-effective amendments, to this registration statement, and the registrant hereby also appoints each such named person as its attorney- in-fact with like authority to sign and file any such amendments in its name and behalf. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3, and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New Orleans, State of Louisiana, on the 29th day of February 1996. LOUISIANA POWER & LIGHT COMPANY By: /s/ John T. Cordaro John J. Cordaro President Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date /s/ Edwin Lupberger Chairman of the February 29, 1996 Edwin Lupberger Board, Chief Executive Officer and Director (Principal Executive Officer) /s/ Gerald D. McInvale Executive Vice Gerald D. McInvale President, Chief February 29, 1996 Financial Officer, and Director (Principal Financial Officer) /s/ Louis E. Buck, Jr. Vice President, Louis E. Buck, Jr. Chief Accounting February 29, 1996 Officer and Assistant Secretary (Principal Accounting Officer) /s/ Michael B. Bemis Michael B. Bemis /s/ John J. Cordaro John J. Cordaro /s/ Donald C. Hintz Directors February 29, 1996 Donald C. Hintz /s/ Jerry D. Jackson Jerry D. Jackson /s/ Jerry L. Maulden Jerry L. Maulden EXHIBIT 23(c) INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Louisiana Power & Light Company on Form S-3 of our reports dated February 11, 1994, appearing in the Annual Report on Form 10-K of Louisiana Power & Light Company for the year ended December 31, 1994 and to the references to us under the heading "Experts and Legality" in the Prospectus, which is part of this Registration Statement. /s/ DELOITTE & TOUCHE LLP New Orleans, Louisiana February 28, 1996 EXHIBIT 23(d) CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this Registration Statement of Louisiana Power & Light Company on Form S-3 of our reports dated February 21, 1995 on our audit of the financial statements and financial statement schedule of Louisiana Power & Light Company as of and for the year ended December 31, 1994. We also consent to the reference to our firm under the caption "Experts and Legality." /s/ Coopers & Lybrand L.L.P. New Orleans, Louisiana February 22, 1996 EX-1 2 Exhibit 1(a) LOUISIANA POWER & LIGHT COMPANY W3A FUNDING CORPORATION $________ Waterford 3 Secured Lease Obligation Bonds, ____% Series due ____ $________ Waterford 3 Secured Lease Obligation Bonds, ____% Series due ____ UNDERWRITING AGREEMENT __________ __, 1996 MORGAN STANLEY & CO. INCORPORATED CITICORP SECURITIES, INC. c/o MORGAN STANLEY & CO. INCORPORATED 1585 Broadway New York, New York 10036-8293 Ladies and Gentlemen: Each of the undersigned, Louisiana Power & Light Company (the "Company") and W3A Funding Corporation (the "Funding Corporation"), hereby confirms its agreement with you, as underwriters (the "Underwriters", which term, when the context permits, shall also include any underwriters substituted as hereinafter in Section 12 provided), as follows: SECTION 1. Introduction. The Funding Corporation proposes to issue and sell $_____________ in aggregate principal amount of its Waterford 3 Secured Lease Obligation Bonds, ____% Series due __________ __, ____ (the "Short Bonds") and $__________ in aggregate principal amount of its Waterford 3 Secured Lease Obligation Bonds, ____% Series due _______ __, ____ (the "Long Bonds") (collectively, the "Bonds"; each of the Short Bonds and the Long Bonds sometimes being referred to herein as a "series" of Bonds) registered under the Registration Statement (as defined herein). The Bonds will be issued under a Collateral Trust Indenture dated as of ________ __, 1996, as supplemented by Supplemental Indenture No. 1 thereto dated as of ________ __, 1996 (the "Supplemental Indenture"), among the Funding Corporation, the Company and Bankers Trust Company, as trustee (the "Trustee") (such Collateral Trust Indenture, as so supplemented, the "Trust Indenture"). SECTION 2. Purchase and Sale. On the basis of the representations and warranties herein contained, and subject to the terms and conditions herein set forth, each Underwriter shall purchase from the Funding Corporation, at the time and place herein specified, severally and not jointly, and the Funding Corporation shall issue and sell to each of the Underwriters, the following principal amounts of the Bonds at the price (equal to the percentage of the principal amount thereof) indicated below[, plus accrued interest thereon from _______ __, 1996 to the Closing Date (as defined herein)]: Short Bonds Price: 100% Name Principal Amount Morgan Stanley & Co. Incorporated $ Citicorp Securities, Inc. $ Long Bonds Price: 100% Name Principal Amount Morgan Stanley & Co. Incorporated $ Citicorp Securities, Inc. $ It is understood that the Underwriters will offer the Bonds for sale as set forth in the Prospectus (as defined herein). Neither series of the Bonds shall be purchased hereunder unless both series are purchased. Concurrently with such purchase, issuance and sale, the Company will pay, or cause to be paid, to the Underwriters in same day funds an underwriting commission of ____% of the principal amount thereof ($_________) in respect of the Short Bonds and an underwriting commission of ____% of the principal amount thereof ($_______) in respect of the Long Bonds. The Company acknowledges that the fees and expenses of counsel to the Underwriters shall be included on the invoice of transaction expenses to be delivered by First National Bank of Commerce, as Owner Trustee (the "Owner Trustee"), on or prior to the Closing Date, pursuant to Sections 3.01(a)(iii) and 3.01(b) of the Refunding Agreements Nos. 2 and 3, dated as of ____________ __, 1996, among the Funding Corporation, the Company, the Owner Participant named therein, the Owner Trustee, Bankers Trust Company and Stanley Burg (the "Refunding Agreements"), and to be paid by the Owner Trustee with funds provided by such Owner Participant and from proceeds from the sale of the Bonds. SECTION 3. Description of Bonds. The Bonds and the Trust Indenture shall have the terms and provisions described in the Prospectus, provided that subsequent to the date hereof and prior to the Closing Date the form of the Trust Indenture (including the Supplemental Indenture) may be amended by mutual agreement among the Funding Corporation, the Company and the Underwriters. SECTION 4. Representations and Warranties of the Company and the Funding Corporation. (a) The Company represents and warrants to the several Underwriters, and covenants and agrees with the several Underwriters, that: (i) The Company is duly organized and validly existing as a corporation in good standing under the laws of the State of Louisiana and has the necessary corporate power and authority to conduct the business which it is described in the Prospectus as conducting and to own and operate the properties owned and operated by it in such business. (ii) The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (File No. 333-_____) for the registration of $322,526,000 principal amount of the Bonds under the Securities Act of 1933, as amended (the "Securities Act"), and such registration statement has become effective. The Company qualifies for use of Form S-3 for the registration of the Bonds. The prospectus forming a part of such registration statement, at the time such registration statement became effective, including all documents incorporated by reference therein at that time pursuant to Item 12 of Form S-3, is hereinafter referred to as the "Basic Prospectus". In the event that (A) the Basic Prospectus shall have been amended, revised or supplemented prior to the time of effectiveness of this Underwriting Agreement, including without limitation by any preliminary prospectus supplement relating to the Bonds, or (B) the Company shall have filed documents pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), after the time such registration statement initially became effective and prior to the time of effectiveness of this Underwriting Agreement, which are deemed to be incorporated by reference in the Basic Prospectus pursuant to Item 12 of Form S-3, the term "Basic Prospectus" as used herein shall also mean such prospectus as so amended, revised or supplemented and reflecting such incorporation by reference. Such registration statement in the form in which it became effective and as it may have been amended by all amendments thereto as of the time of effectiveness of this Underwriting Agreement (including for these purposes as an amendment any document incorporated by reference in the Basic Prospectus), and the Basic Prospectus as it shall be supplemented to reflect the terms of the offering and sale of the Bonds by a prospectus supplement (the "Prospectus Supplement") to be filed with, or transmitted for filing to, the Commission pursuant to Rule 424 under the Securities Act ("Rule 424"), are hereinafter referred to as the "Registration Statement" and the "Prospectus," respectively. (iii) (A) After the time of effectiveness of this Underwriting Agreement and during the time specified in Section 7(d), the Company will not file any amendment to the Registration Statement or supplement to the Prospectus, and (B) between the time of effectiveness of this Underwriting Agreement and the Closing Date, the Company will not file any document which is to be incorporated by reference in, or any supplement to, the Basic Prospectus, in either case, without prior notice to the Underwriters and to Winthrop, Stimson, Putnam & Roberts ("Counsel for the Underwriters"), or any such amendment or supplement to which said Counsel shall reasonably object on legal grounds in writing. For purposes of this Underwriting Agreement, any document which is filed with the Commission after the time of effectiveness of this Underwriting Agreement and is incorporated by reference in the Prospectus pursuant to Item 12 of Form S-3 shall be deemed a supplement to the Prospectus. (iv) The Registration Statement, in the form in which it (or the latest post-effective amendment thereto) became effective, and the Trust Indenture, at such time, fully complied, and the Prospectus, when delivered to the Underwriters for their use in making confirmations of sales of the Bonds and at the Closing Date, as it may then be amended or supplemented, will fully comply, in all material respects with the applicable provisions of the Securities Act, the Trust Indenture Act of 1939, as amended (the "TIA"), and the rules and regulations of the Commission thereunder or pursuant to said rules and regulations did or will be deemed to comply therewith. The documents incorporated by reference in the Prospectus pursuant to Item 12 of Form S-3, on the date first filed with the Commission pursuant to the Exchange Act, fully complied or will fully comply in all material respects with the applicable provisions of the Exchange Act and the rules and regulations of the Commission thereunder or pursuant to said rules and regulations did or will be deemed to comply therewith. On the later of (A) the date the Registration Statement was declared effective by the Commission under the Securities Act and (B) the date that the Company's most recent Annual Report on Form 10-K was filed with the Commission under the Exchange Act (the date described in either clause (A) or (B) is hereinafter referred to as the "Effective Date"), the Registration Statement did not, and on the date that any post-effective amendment to the Registration Statement became or becomes effective, the Registration Statement, as amended by any such post-effective amendment, did not or will not, 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 not misleading. At the time the Prospectus is delivered to the Underwriters for their use in making confirmations of sales of the Bonds and at the Closing Date, the Prospectus, as it may then be amended or supplemented, 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 are made, not misleading, and on said dates and at such times, the documents then incorporated by reference in the Prospectus pursuant to Item 12 of Form S-3, when read together with the Prospectus, or the Prospectus, as it may then be amended or supplemented, 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 are made, not misleading. The foregoing representations and warranties in this subsection (iv) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the Company by the Underwriters or on behalf of any Underwriter specifically for use in connection with the preparation of the Registration Statement or the Prospectus, as they may be then amended or supplemented, or to any statements in or omissions from the statements of eligibility on Form T-1 and Form T-2, as they may then be amended, under the TIA filed as exhibits to the Registration Statement. (v) Each of (A) the Participation Agreements (as defined in the Prospectus), (B) the Granting Clause Documents (as defined in Appendix A to the Participation Agreements), (C) the Trust Indenture, (D) the Refunding Agreements, and (E) this Underwriting Agreement (the documents described in clauses (A) through (D) above, as they each may be amended or supplemented as of the Closing Date, being collectively referred to herein as the "Transaction Documents") has been or, as of the Closing Date, will be duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by each other party thereto, constitutes a legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms, except as limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar laws affecting creditors' rights and general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) and, with respect to this Underwriting Agreement, subject to any principles of public policy limiting the right to enforce the indemnification provisions contained herein. (vi) The issuance and sale of the Bonds and the fulfillment of the terms of this Underwriting Agreement will not result in a breach of any of the terms or provisions of, or constitute a default under, the Trust Indenture, the Granting Clause Documents or the Refunding Agreements or any other indenture, mortgage, deed of trust or other agreement or instrument to which the Company is now a party. (vii) Except as set forth or contemplated in the Prospectus, as it may be amended or supplemented, the Company has obtained all material licenses, permits, and other governmental or regulatory authorizations currently required for the conduct of its business (including, without limitation, the performance of its current obligations under the Transaction Documents), and is in all material respects complying therewith, and the Company is not aware of any fact that would lead it to believe that any material license, permit or other governmental or regulatory authorization would not remain in effect or be renewed in its ordinary course of business. (viii) It is not necessary for the Funding Corporation to register as an investment company pursuant to the Investment Company Act of 1940, as amended, in order to participate in the transactions contemplated by the Prospectus. (b) The Funding Corporation represents and warrants to the several Underwriters that each of the Participation Agreements, the Refunding Agreements, the Trust Indenture, this Underwriting Agreement and the Bonds has been or, as of the Closing Date, will be duly authorized, executed and delivered by the Funding Corporation and, assuming the due authorization, execution, authentication and delivery thereof by each other party thereto, constitutes a legal, valid and binding obligation of the Funding Corporation enforceable against it in accordance with its terms, except as limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar laws affecting creditors' rights and general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) and subject to any principles of public policy limiting the right to enforce the indemnification provisions contained herein. SECTION 1. Offering. The Company is advised by the Underwriters that they propose to make a public offering of their respective portions of the Bonds of each series as soon after the effectiveness of this Underwriting Agreement as in their judgment is advisable. The Company is further advised by the Underwriters that the Bonds are to be offered to the public at the respective initial public offering prices specified in the Prospectus Supplement [plus accrued interest thereon from _________ __, 1996 to the Closing Date]. SECTION 2. Time and Place of Closing. Delivery of the Bonds and payment of the purchase price therefor by wire transfer or check or checks payable to the Funding Corporation in same day funds shall be made at the offices of Reid & Priest LLP, 40 West 57th Street, New York, New York, at 10:00 A.M., New York time, on _____________ __, 1996, or at such other time on the same or such other day as shall be agreed upon by the Company and Morgan Stanley & Co. Incorporated, or as may be established in accordance with Section 12 hereof. The hour and date of such delivery and payment are herein called the "Closing Date." The Bonds shall be delivered to the Underwriters in book-entry form through the facilities of The Depository Trust Company in New York, New York. The certificates for the Bonds shall be in the form of one or more typewritten bonds in fully registered form, in the aggregate principal amount of the Bonds, and registered in the name of Cede & Co, as nominee of The Depository Trust Company. The Company agrees to make the Bonds available to the Underwriters for checking not later than 2:30 P.M., New York time, on the last business day preceding the Closing Date at such place as may be agreed upon between Morgan Stanley & Co. Incorporated and the Company, or at such other time and/or date as may be agreed upon between Morgan Stanley & Co. Incorporated and the Company. SECTION 3. Covenants of the Funding Corporation and the Company. Each of the Funding Corporation and the Company covenants and agrees with the several Underwriters that: (a) Not later than the Closing Date, the Company will deliver to the Underwriters a copy of the Registration Statement relating to the Bonds, as originally filed with the Commission, and of all amendments or supplements thereto relating to the Bonds, certified by an officer of the Company to be in the form filed. (b) The Company will deliver to the Underwriters as many copies of the Prospectus (and any amendments or supplements thereto) as the Underwriters may reasonably request. (c) The Company will cause the Prospectus to be filed with, or transmitted for filing to, the Commission pursuant to and in compliance with Rule 424 and will advise Morgan Stanley & Co. Incorporated promptly of the issuance of any stop order under the Securities Act with respect to the Registration Statement or the institution of any proceedings therefor of which the Funding Corporation or the Company shall have received notice. Each of the Funding Corporation and the Company will use its best efforts to prevent the issuance of any such stop order and to secure the prompt removal thereof if issued. (d) During such period of time after this Underwriting Agreement has become effective as the Underwriters are required by law to deliver a prospectus, if any event relating to or affecting the Company or the Funding Corporation, or of which the Company shall be advised by the Underwriters in writing, shall occur which in the Company's opinion should be set forth in a supplement or amendment to the Prospectus in order to make the Prospectus not misleading in the light of the circumstances when it is delivered to a purchaser of the Bonds, the Company will amend or supplement the Prospectus by either (i) preparing and filing with the Commission and furnishing to the Underwriters a reasonable number of copies of a supplement or supplements or an amendment or amendments to the Prospectus, or (ii) making an appropriate filing pursuant to Section 13, 14 or 15(d) of the Exchange Act which will supplement or amend the Prospectus, so that, as supplemented or amended, it 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 when the Prospectus is delivered to a purchaser, not misleading. Unless such event relates solely to the activities of the Underwriters (in which case the Underwriters shall assume the expense of preparing any such amendment or supplement), the expenses of complying with this Section 7(d) shall be borne by the Company until the expiration of nine months from the time of effectiveness of this Underwriting Agreement and such expenses shall be borne by the Underwriters thereafter. (e) The Company will make generally available to its security holders, as soon as practicable, an earning statement (which need not be audited) covering a period of at least twelve months beginning after the "effective date of the registration statement" within the meaning of Rule 158 under the Securities Act, which earning statement shall be in such form, and be made generally available to security holders in such a manner so as to meet the requirements of the last paragraph of Section 11(a) of the Securities Act and Rule 158 under the Securities Act. (f) At any time within six months of the date hereof, the Company and the Funding Corporation will furnish such proper information as may be lawfully required and otherwise cooperate in qualifying the Bonds for offer and sale under the blue sky laws of such jurisdictions as the Underwriters may reasonably designate, provided, that neither the Funding Corporation nor the Company shall be required to qualify as a foreign corporation or dealer in securities, to file any consents to service of process under the laws of any jurisdiction, or to meet any other requirements deemed by it to be unduly burdensome. (g) The Company will, except as herein provided, pay or cause to be paid all expenses and taxes (except transfer taxes) in connection with (i) the preparation and filing of the Registration Statement and any post-effective amendment thereto, (ii) the printing, issuance and delivery of the Bonds and the preparation, execution, printing and recordation of the Trust Indenture, (iii) legal fees and expenses relating to the qualification of the Bonds under the blue sky laws of various jurisdictions in an amount not to exceed $20,000, (iv) the printing and delivery to the Underwriters of reasonable quantities of copies of the Registration Statement, the Basic Prospectus, the preliminary (and any supplemental) blue sky survey, any preliminary prospectus supplement relating to the Bonds and the Prospectus and any amendment or supplement thereto, except as otherwise provided in paragraph (d) of this Section 7, (v) fees of the rating agencies in connection with the rating of the Bonds, (vi) fees (if any) of the National Association of Securities Dealers, Inc. (the "NASD") in connection with its review of the terms of the offering and (vii) the procurement by the Underwriters of same day funds for the payment of the purchase price for the Bonds as required by Section 6 of this Underwriting Agreement. Except as provided above, the Company shall not be required to pay any amount for any expenses of the Underwriters, except that, if this Underwriting Agreement shall be terminated in accordance with the provisions of Section 8, 9 or 13 hereof, the Company will reimburse the Underwriters for (i) the reasonable fees and expenses of Counsel for the Underwriters, and (ii) reasonable out-of- pocket expenses, in an amount not exceeding in the aggregate $15,000, incurred in contemplation of the performance of this Underwriting Agreement. The Company shall not in any event be liable to the Underwriters for damages on account of loss of anticipated profits. SECTION 4. Conditions of Underwriters' Obligations. The obligations of the Underwriters to purchase and pay for the Bonds shall be subject to the accuracy on the date hereof and on the Closing Date of the representations and warranties made herein on the part of the Funding Corporation and the Company and of any certificates furnished by the Funding Corporation and the Company on the Closing Date and to the following conditions: (a) The Prospectus shall have been filed with, or transmitted for filing to, the Commission pursuant to Rule 424 prior to 5:30 p.m., New York time, on the second business day following the date of this Underwriting Agreement, or such other time and date as may be agreed upon by the Company and the Underwriters. (b) No stop order suspending the effectiveness of the Registration Statement shall be in effect at or prior to the Closing Date; no proceedings for such purpose shall be pending before, or, to the knowledge of the Funding Corporation, the Company or the Underwriters, threatened by, the Commission on the Closing Date; and the Underwriters shall have received a certificate, dated the Closing Date and signed by the President, a Vice President, the Treasurer or an Assistant Treasurer of each of the Funding Corporation and the Company to the effect that no such stop order has been or is in effect and that no proceedings for such purpose are pending before, or, to the knowledge of the Funding Corporation or the Company, respectively, threatened by, the Commission. (c) At the Closing Date, there shall have been issued, and there shall be in full force and effect, to the extent legally required for the issuance and sale of the Bonds, an order or orders of the Commission under the Public Utility Holding Company Act of 1935, as amended (the "Holding Company Act"), authorizing the issuance and sale of the Bonds on the terms set forth in, or contemplated by, this Underwriting Agreement, the Trust Indenture and the Prospectus. (d) At the Closing Date, the Underwriters shall have received from Monroe & Lemann (A Professional Corporation) and Reid & Priest LLP, as counsel to the Company, and Reid & Priest LLP, as counsel to the Funding Corporation, opinions, dated the Closing Date, substantially in the forms set forth in Exhibits A, B and C hereto, respectively, (i) with such changes therein as may be agreed upon by the Company and the Underwriters with the approval of Counsel for the Underwriters, and (ii) if the Prospectus shall be supplemented after being furnished to the Underwriters for use in offering the Bonds, with changes therein to reflect such supplementation. (e) At the Closing Date, the Underwriters shall have received from Winthrop, Stimson, Putnam & Roberts, Counsel for the Underwriters, an opinion, dated the Closing Date, substantially in the form set forth in Exhibit D hereto, with such changes therein as may be necessary to reflect any supplementation of the Prospectus prior to the Closing Date. (f) On or prior to the effective date of this Underwriting Agreement, the Underwriters shall have received from Coopers & Lybrand L.L.P., the Company's independent certified public accountants (the "Accountants"), a letter dated the date hereof and addressed to the Underwriters to the effect that (i) they are independent certified public accountants with respect to the Company within the meaning of the Securities Act and the applicable published rules and regulations thereunder; (ii) in their opinion, the financial statements and financial statement schedules examined by them and included or incorporated by reference in the Prospectus comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Exchange Act and the applicable published rules and regulations thereunder; (iii) on the basis of performing the procedures specified by the American Institute of Certified Public Accountants for a review of interim financial information as described in SAS No. 71, Interim Financial Information, on the latest unaudited financial statements, if any, included or incorporated by reference in the Prospectus, a reading of the latest available interim unaudited financial statements of the Company, the minutes of the meetings of the Board of Directors of the Company, the Executive Committee thereof, if any, and the stockholder of the Company, since December 31, 1995 to a specified date not more than five business days prior to the date of such letter, and inquiries of officers of the Company who have responsibility for financial and accounting matters (it being understood that the foregoing procedures do not constitute an examination made in accordance with generally accepted auditing standards and they would not necessarily reveal matters of significance with respect to the comments made in such letter, and, accordingly, that the Accountants make no representations as to the sufficiency of such procedures for the purposes of the Underwriters), nothing has come to their attention which caused them to believe that, to the extent applicable, (A) the unaudited financial statements of the Company (if any) included or incorporated by reference in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Exchange Act and the related published rules and regulations thereunder; (B) any material modifications should be made to said unaudited financial statements for them to be in conformity with generally accepted accounting principles; and (C) at a specified date not more than five business days prior to the date of the letter, there was any change in the capital stock or long-term debt of the Company, or decrease in its net assets, in each case as compared with amounts shown in the most recent balance sheet incorporated by reference in the Prospectus, except in all instances for changes or decreases which the Prospectus discloses have occurred or may occur, for declarations of dividends, for the repayment or redemption of long-term debt, for the amortization of premium or discount on long-term debt, for the redemption or purchase of preferred stock for sinking fund purposes, for any increases in long-term debt in respect of previously issued pollution control, solid waste disposal or industrial development revenue bonds, or for changes or decreases as set forth in such letter, identifying the same and specifying the amount thereof; and (iv) stating that they have compared specific dollar amounts, percentages of revenues and earnings and other financial information pertaining to the Company (A) set forth in the Prospectus, and (B) set forth in documents filed by the Company pursuant to Section 13, 14 or 15(d) of the Exchange Act as specified in Exhibit E hereto, in each case, to the extent that such amounts, numbers, percentages and information may be derived from the general accounting records of the Company, and excluding any questions requiring an interpretation by legal counsel, with the results obtained from the application of specified readings, inquiries and other appropriate procedures (which procedures do not constitute an examination in accordance with generally accepted auditing standards) set forth in the letter, and found them to be in agreement. (g) At the Closing Date, the Underwriters shall have received (i) certificates, dated the Closing Date and signed by the President, a Vice President, the Treasurer or an Assistant Treasurer of each of the Funding Corporation and the Company, respectively, to the effect that (A) the representations and warranties of the Funding Corporation and the Company, as the case may be, contained herein are true and correct, and (B) each of the Funding Corporation and the Company has performed and complied with all agreements and conditions in this Underwriting Agreement on its part to be performed or complied with at or prior to the Closing Date, (ii) a certificate, dated the Closing Date and signed by the President, a Vice President, the Treasurer or an Assistant Treasurer of the Company that since the most recent date as of which information is given in the Prospectus, there has not been any material adverse change in the business, property or financial condition of the Company and there has not been any material transaction entered into by the Company, other than transactions in the ordinary course of business, in each case other than as referred to in, or contemplated by, the Prospectus as it may then be amended or supplemented. (h) At the Closing Date, the Underwriters shall have received duly executed counterparts of the Trust Indenture and the Supplemental Indenture. (i) At the Closing Date, the Underwriters shall have received from the Accountants a letter, dated the Closing Date, confirming, as of a date not more than five days prior to the Closing Date, the statements contained in the letter delivered pursuant to Section 8(f) hereof. (j) On or prior to the effective date of this Underwriting Agreement, the Underwriters shall have received from Deloitte & Touche LLP a letter, dated the date hereof, and addressed to the Underwriters, with respect to certain financial information contained in the Prospectus, as mutually agreed to by the Underwriters and the Company. (k) Between the date hereof and the Closing Date, no Default (or an event which, with the giving of notice or the passage of time or both, would constitute a Default) under the Lease (as defined in the Prospectus), the Lease Indenture (as defined in the Prospectus) or the Trust Indenture shall have occurred. (l) Between the date hereof and the Closing Date, no other event shall have occurred with respect to or otherwise affecting the Company, which, in the reasonable opinion of the Underwriters, materially impairs the investment quality of the Bonds. (m) Prior to the Closing Date, the Underwriters shall have received from the Company evidence reasonably satisfactory to the Underwriters that the Bonds have received ratings of _____ or higher from Moody's Investors Service, Inc. and ______ or higher from Standard & Poor's Ratings Group. (n) Between the date hereof and the Closing Date, neither Moody's Investors Service, Inc. nor Standard and Poor's Ratings Group shall have lowered its rating of any of the Company's debt securities in any respect. (o) The Bonds shall, upon delivery to the Underwriters in accordance with this Underwriting Agreement, be secured by the Pledged Lessor Bonds (as defined in the Prospectus) in accordance with the Trust Indenture; the conditions precedent to a refunding, as set forth in the Participation Agreement (including, without limitation, Sections 2(b) and 10(c) thereof) and the Refunding Agreements (including, without limitation, Article 2 thereof), shall have been met prior to the issuance and delivery of such notes, with none of such conditions precedent having been waived by the Funding Corporation, the Company or the Trustee without the consent of the Underwriters. (p) The opinions of counsel required to be delivered by the first two sentences of Section 10(c)(5) of the Participation Agreement as a condition precedent to a refunding shall also be addressed and delivered to the Underwriters, except for the opinions of Special Counsel, NRC Counsel and Special Louisiana Counsel to the Owner Participants, all as described and/or defined in the Participation Agreement, it being understood that such opinions of counsel may be confirmations by counsel of opinions previously delivered by such counsel in connection with the transactions described in or contemplated by the Participation Agreement, provided that such confirmations of opinions shall be dated the Closing Date, shall confirm the previously delivered opinions as of the Closing Date, and shall either be addressed to the Underwriters or shall state that the Underwriters may rely upon the previously delivered opinions, as so confirmed, as if addressed to them. (q) The opinions of counsel required to be delivered to the Trustee pursuant to Section 2.04(e) of the Trust Indenture shall also be addressed and delivered to the Underwriters. (r) The Underwriters shall have received payment in full of the underwriting commissions specified in Section 2 hereof. (s) All legal matters in connection with the issuance and sale of the Bonds shall be satisfactory in form and substance to Counsel for the Underwriters. (t) The Funding Corporation and the Company will furnish the Underwriters with additional conformed copies of such opinions, certificates, letters and documents as may be reasonably requested. If any of the conditions specified in this Section 8 shall not have been fulfilled, this Underwriting Agreement may be terminated by the Underwriters upon notice thereof to the Company. Any such termination shall be without liability of any party to the other party, except as otherwise provided in paragraph (g) of Section 7 and in Section 11. SECTION 5. Conditions of the Obligations of the Funding Corporation and the Company. The obligations of the Funding Corporation and the Company hereunder shall be subject to the following conditions: (a) No stop order suspending the effectiveness of the Registration Statement shall be in effect at or prior to the Closing Date, and no proceedings for that purpose shall be pending before, or threatened by, the Commission on the Closing Date. (b) At the Closing Date there shall be in full force and effect an order or orders of the Commission under the Holding Company Act authorizing the issuance and sale of the Bonds on the terms set forth in or contemplated by this Underwriting Agreement, the Trust Indenture and the Prospectus. In case any of the conditions specified in this Section 9 shall not have been fulfilled, this Underwriting Agreement may be terminated by the Company upon notice thereof to the Underwriters. Any such termination shall be without liability of any party to the other party, except as otherwise provided in paragraph (g) of Section 7 and in Section 11. SECTION 6. Indemnification. (a) The Company shall indemnify, defend and hold harmless each Underwriter and each person who controls each Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages or liabilities, joint or several, to which each Underwriter or any or all of them may become subject under the Securities Act or any other statute or common law and shall reimburse each Underwriter and any such controlling person for any legal or other expenses (including to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon an untrue statement or alleged untrue statement of a material fact required to be stated therein or contained in the Registration Statement, as amended or supplemented, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or upon an untrue statement or alleged untrue statement of a material fact contained in the Basic Prospectus (if used prior to the time the Prospectus is filed with, or transmitted for filing to, the Commission pursuant to Rule 424), or in the Prospectus, as each may be amended or supplemented, or the omission or alleged omission to state therein 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 indemnity agreement contained in this paragraph shall not apply to any such losses, claims, damages, liabilities, expenses or actions arising out of, or based upon, any such untrue statement or alleged untrue statement, or any such omission or alleged omission, if such statement or omission was made in reliance upon and in conformity with information furnished herein or in writing to the Company by any Underwriter specifically for use in connection with the preparation of the Registration Statement, the Basic Prospectus (if used prior to the date the Prospectus is filed with, or transmitted for filing to, the Commission pursuant to Rule 424) or the Prospectus or any amendment or supplement to any thereof or arising out of or based upon statements in or omissions from the statements of eligibility on Form T-1 and Form T-2 under the TIA filed as exhibits to the Registration Statement; and provided further, that the indemnity agreement contained in this subsection shall not inure to the benefit of any Underwriter or to the benefit of any person controlling any Underwriter on account of any such losses, claims, damages, liabilities, expenses or actions arising from the sale of the Bonds to any person in respect of any Basic Prospectus or the Prospectus, as supplemented or amended, furnished by an Underwriter to a person to whom any of the Bonds were sold (excluding in both cases, however, any document then incorporated or deemed incorporated by reference therein), insofar as such indemnity relates to any untrue or misleading statement or omission made in the Basic Prospectus or the Prospectus but eliminated or remedied prior to the consummation of such sale in the Prospectus, or any amendment or supplement thereto, furnished pursuant to Section 7(d) hereof, respectively, unless a copy of the Prospectus (in the case of such a statement or omission made in the Basic Prospectus) or such amendment or supplement (in the case of such a statement or omission made in the Prospectus) (excluding, however, any document then incorporated or deemed incorporated by reference in the Prospectus or such amendment or supplement) is furnished by such Underwriter to such person (i) with or prior to the written confirmation of the sale involved or (ii) as soon as available after such written confirmation (if it is made available to the Underwriters prior to settlement of such sale). (b) Each Underwriter shall indemnify, defend and hold harmless the Company, its directors and officers and each person who controls the foregoing within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act or any other statute or common law and shall reimburse each of them for any legal or other expenses (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with defending any action, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, as amended or supplemented, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or upon an untrue statement or alleged untrue statement of a material fact contained in the Basic Prospectus (if used prior to the date the Prospectus is filed with, or transmitted for filing to, the Commission pursuant to Rule 424), or in the Prospectus, as amended or supplemented, or the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case, if, but only if, such statement or omission was made in reliance upon and in conformity with information furnished herein or in writing to the Company by any Underwriter specifically for use in connection with the preparation of the Registration Statement, the Basic Prospectus (if used prior to the date the Prospectus is filed with, or transmitted for filing to, the Commission pursuant to Rule 424) or the Prospectus, or any amendment or supplement thereto. (c) In case any action shall be brought, based upon the Registration Statement, the Basic Prospectus or the Prospectus (including amendments or supplements thereto), against any party in respect of which indemnity may be sought pursuant to any of the preceding paragraphs, such party (hereinafter called the indemnified party) shall promptly notify the party or parties against whom indemnity shall be sought hereunder (hereinafter called the indemnifying party) in writing, and the indemnifying party shall have the right to participate at its own expense in the defense or, if it so elects, to assume (in conjunction with any other indemnifying party) the defense thereof, including the employment of counsel reasonably satisfactory to the indemnified party and the payment of all fees and expenses. If the indemnifying party shall elect not to assume the defense of any such action, the indemnifying party shall reimburse the indemnified party for the reasonable fees and expenses of any counsel retained by such indemnified party. Such indemnified party shall have the right to employ separate counsel in any such action in which the defense has been assumed by the indemnifying party and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the employment of counsel has been specifically authorized by the indemnifying party or (ii) the named parties to any such action (including any impleaded parties) include each of such indemnified party and the indemnifying party and such indemnified party shall have been advised by such counsel that a conflict of interest between the indemnifying party and such indemnified party may arise and for this reason it is not desirable for the same counsel to represent both the indemnifying party and the indemnified party (it being understood, however, that the indemnifying party shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys for such indemnified party (plus any local counsel retained by such indemnified party in its reasonable judgment). The indemnified party shall be reimbursed for all such fees and expenses as they are incurred. The indemnifying party shall not be liable for any settlement of any such action effected without its consent, but if any such action is settled with the consent of the indemnifying party or if there be a final judgment for the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity has or could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims which are the subject matter of such action, suit or proceeding. (d) If the indemnification provided for under subsections (a), (b) or (c) in this Section 10 is unavailable to an indemnified party in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Underwriters from the offering of the Bonds or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering (after deducting underwriting discounts and commissions but before deducting expenses) bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault of the Company on the one hand and of the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by any of the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 10(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable to an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 10(d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Bonds underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section 10(d) are several in proportion to their respective underwriting obligations and not joint. SECTION 7. Survival of Certain Representations and Obligations. Any other provision of this Underwriting Agreement to the contrary notwithstanding, (a) the indemnity and contribution agreements contained in Section 10 of, and the representations and warranties and other agreements of the Funding Corporation and the Company contained in, this Underwriting Agreement shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or by or on behalf of the Funding Corporation or the Company, or its directors or officers or any of the other persons referred to in Section 10 hereof and (ii) acceptance of and payment for the Bonds and (b) the indemnity and contribution agreements contained in Section 10 shall remain operative and in full force and effect regardless of any termination of this Underwriting Agreement. SECTION 8. Default of Underwriters. If any Underwriter shall fail or refuse (otherwise than for some reason sufficient to justify, in accordance with the terms hereof, the cancellation or termination of its obligations hereunder) to purchase and pay for the principal amount of Bonds which it has agreed to purchase and pay for hereunder, and the aggregate principal amount of Bonds which such defaulting Underwriter agreed but failed or refused to purchase is not more than one- tenth of the aggregate principal amount of the Bonds, the other Underwriters shall be obligated to purchase the Bonds which such defaulting Underwriter agreed but failed or refused to purchase; provided that in no event shall the principal amount of Bonds which any Underwriter has agreed to purchase pursuant to Section 2 hereof be increased pursuant to this Section 12 by an amount in excess of one-ninth of such principal amount of Bonds without written consent of such Underwriter. If any Underwriter shall fail or refuse to purchase Bonds and the aggregate principal amount of Bonds with respect to which such default occurs is more than one-tenth of the aggregate principal amount of the Bonds, the Company shall have the right (a) to require the non-defaulting Underwriters to purchase and pay for the respective principal amounts of Bonds that they had severally agreed to purchase hereunder, and, in addition, the principal amount of Bonds that the defaulting Underwriter shall have so failed to purchase up to a principal amount thereof equal to one- ninth of the respective principal amount of Bonds that such non- defaulting Underwriters have otherwise agreed to purchase hereunder, and/or (b) to procure one or more others, members of the NASD (or, if not members of the NASD, who are foreign banks, dealers or institutions not registered under the Exchange Act and who agree in making sales to comply with the NASD's Rules of Fair Practice), to purchase, upon the terms herein set forth, the principal amount of Bonds that such defaulting Underwriter had agreed to purchase, or that portion thereof that the remaining Underwriters shall not be obligated to purchase pursuant to the foregoing clause (a). In the event the Company shall exercise its rights under clause (a) and/or (b) above, the Company shall give written notice thereof to the Underwriters within 24 hours (excluding any Saturday, Sunday or legal holiday) of the time when the Company learns of the failure or refusal of any Underwriter to purchase and pay for its respective principal amount of Bonds, and thereupon the Closing Date shall be postponed for such period, not exceeding three business days, as the Company shall determine. In the event the Company shall be entitled to but shall not elect (within the time period specified above) to exercise its rights under clause (a) and/or (b), the Company shall be deemed to have elected to terminate this Underwriting Agreement. In the absence of such election by the Company, this Underwriting Agreement will, unless otherwise agreed by the Company and the non-defaulting Underwriters, terminate without liability on the part of any non-defaulting party except as otherwise provided in paragraph (g) of Section 7 and in Section 11. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of its default under this Underwriting Agreement. SECTION 9. Termination. This Underwriting Agreement shall be subject to termination by notice given by written notice from Morgan Stanley & Co. Incorporated to the Company and the Funding Corporation, if (a) after the execution and delivery of this Underwriting Agreement and prior to the Closing Date (i) trading generally shall have been suspended on the New York Stock Exchange by The New York Stock Exchange, Inc., the Commission or other governmental authority, (ii) minimum or maximum ranges for prices shall have been generally established on the New York Stock Exchange by The New York Stock Exchange, Inc., the Commission or other governmental authority, (iii) a general moratorium on commercial banking activities shall have been declared by either Federal or New York State authorities, or (iv) there shall have occurred any material outbreak or escalation of hostilities or any calamity or crisis that, in the judgment of Morgan Stanley & Co. Incorporated, is material and adverse and (b) in the case of any of the events specified in clauses (a) (i) through (iv), such event singly or together with any other such event makes it, in the reasonable judgment of Morgan Stanley & Co. Incorporated, impracticable to market the Bonds. This Underwriting Agreement shall also be subject to termination, upon notice by Morgan Stanley & Co. Incorporated as provided above, if, in the judgment of Morgan Stanley & Co. Incorporated, the subject matter of any amendment or supplement (prepared by the Company) to the Prospectus (except for information relating solely to the manner of public offering of the Bonds by the Underwriters or to the activity of the Underwriters) filed or issued after the effectiveness of this Underwriting Agreement by the Company shall have materially impaired the marketability of the Bonds. Any termination hereof, pursuant to this Section 13, shall be without liability of any party to any other party, except as otherwise provided in paragraph (g) of Section 7 and in Section 11. SECTION 10. Miscellaneous. THIS UNDERWRITING AGREEMENT SHALL BE A NEW YORK CONTRACT AND ITS VALIDITY AND INTERPRETATION SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. This Underwriting Agreement shall become effective when a fully executed copy thereof is delivered to the Company and to Morgan Stanley & Co. Incorporated. This Underwriting Agreement may be executed in any number of separate counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which, taken together, shall constitute but one and the same agreement. This Underwriting Agreement shall inure to the benefit of each of the Company, the Funding Corporation, the Underwriters and, with respect to the provisions of Section 10, each director, officer and other persons referred to in Section 10, and their respective successors. Should any part of this Underwriting Agreement for any reason be declared invalid, such declaration shall not affect the validity of any remaining portion, which remaining portion shall remain in full force and effect as if this Underwriting Agreement had been executed with the invalid portion thereof eliminated. Nothing herein is intended or shall be construed to give to any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of any provision in this Underwriting Agreement. The term "successor" as used in this Underwriting Agreement shall not include any purchaser, as such purchaser, of any Bonds from the Underwriters. SECTION 11. Notices. All communications hereunder shall be in writing and, if to the Underwriters, shall be mailed or delivered to Morgan Stanley & Co. Incorporated at the address set forth at the beginning of this Underwriting Agreement (to the attention of the General Counsel), if to the Company, shall be mailed or delivered to it at 639 Loyola Avenue, New Orleans, Louisiana 70113, Attention: Secretary, if to Entergy Services, Inc., shall be mailed or delivered to it at 639 Loyola Avenue, New Orleans, Louisiana 70113, Attention: Treasurer or, if to the Funding Corporation, shall be mailed or delivered to it c/o _________________________________________________, with a copy to ________________________________. Very truly yours, W3A FUNDING CORPORATION By: Name: Title: LOUISIANA POWER & LIGHT COMPANY By: Name: Title: Accepted as of the date first above written: MORGAN STANLEY & CO. INCORPORATED CITICORP SECURITIES, INC. By: MORGAN STANLEY & CO. INCORPORATED By: Name: Title: EXHIBIT A [Letterhead of Monroe & Lemann] ______________, 1996 Morgan Stanley & Co. Incorporated Citicorp Securities, Inc. c/o Morgan Stanley & Co. Incorporated 1285 Broadway New York, New York 10036-8293 Ladies and Gentlemen: We, together with Reid & Priest LLP, of New York, New York, have acted as counsel for Louisiana Power & Light Company (the "Company") in connection with the issuance and sale to you pursuant to the Underwriting Agreement, effective __________ __, 1996 (the "Underwriting Agreement"), among W3A Funding Corporation (the "Funding Corporation"), the Company and you, of $____________ aggregate principal amount of the Funding Corporation's Waterford 3 Secured Lease Obligation Bonds, _____% Series due ____ and $___________ aggregate principal amount of its Waterford 3 Secured Lease Obligation Bonds, _____% Series due ____ (collectively, the "Bonds"). The Bonds are being issued pursuant to the Collateral Trust Indenture dated as of ___________ __, 1996, as amended by Supplemental Indenture No. 1 thereto, dated as of ___________ __, 1996 (the Collateral Trust Indenture, as so amended, being hereinafter referred to as the "Trust Indenture"), among the Funding Corporation, the Company and Bankers Trust Company, as trustee (the "Trustee"). This opinion is being rendered to you at the request of the Company. In our capacity as such counsel, we have either participated in the preparation of or have examined and are familiar with: (a) the Company's Restated Articles of Incorporation and By-Laws, each as amended; (b) the Underwriting Agreement; (c) the Trust Indenture; (d) the Registration Statement and Prospectus filed under the Securities Act; (e) the records of various corporate proceedings relating to the authorization, issuance and sale of the Bonds by the Funding Corporation and the execution and delivery by the Company of the Trust Indenture and the Underwriting Agreement; and (f) the proceedings before the Commission under the Holding Company Act relating to the issuance and sale of the Bonds by the Funding Corporation and the execution and delivery by the Company of the Trust Indenture and the Underwriting Agreement. We have also examined or caused to be examined such other documents and have satisfied ourselves as to such other matters as we have deemed necessary in order to render this opinion. We have not examined the Bonds, except specimens thereof, and we have relied upon a certificate of the Trustee as to the authentication and delivery thereof. Capitalized terms used herein and not otherwise defined have the meanings ascribed to such terms in the Underwriting Agreement. Subject to the foregoing and to the further exceptions and qualifications set forth below, we are of the opinion that: (1) The Company is duly organized and validly existing as a corporation in good standing under the laws of the State of Louisiana, has due corporate power and authority to conduct the business which it is described as conducting in the Prospectus and to own and operate the properties owned and operated by it in such business and is duly qualified to conduct such business in the State of Louisiana. (2) The Trust Indenture has been duly and validly authorized by all necessary corporate action on the part of the Company, has been duly and validly executed and delivered by the Company, is a legal, valid and binding instrument enforceable against the Company in accordance with its terms, except as limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar laws affecting creditors' rights and general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law), and has been duly qualified under the TIA and no proceedings to suspend such qualification have been instituted or, to our knowledge, threatened by the Commission. (3) The Underwriting Agreement has been duly authorized, executed and delivered by the Company. (4) The statements made in the Prospectus and the Prospectus Supplement under the captions "Selected Information", "Selected Information Relating to the Collateral Bonds", "Certain Terms of the Collateral Bonds", "Security and Source of Payment for the Collateral Bonds", "Description of the Collateral Bonds and the Indenture", "Description of the Lease Indentures", "Description of the Leases" and "Other Agreements", insofar as they purport to constitute summaries of the documents referred to therein, constitute accurate summaries of the terms of such documents in all material respects. (5) The execution, delivery and performance by the Company of the Underwriting Agreement and the Trust Indenture and the consummation of the transactions contemplated thereby (a) will not violate any provision of the Company's Restated Articles of Incorporation or By-Laws, each as amended, (b) will not violate any provision of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance on or security interest in (except as contemplated by the Trust Indenture) any of the assets of the Company pursuant to the provisions of, any mortgage, indenture, contract, agreement or other undertaking known to us (having made due inquiry with respect thereto) to which the Company is a party or which purports to be binding upon the Company or upon any of its assets, and (c) will not violate any provision of any law or regulation applicable to the Company or, to the best of our knowledge (having made due inquiry with respect thereto), any provision of any order, writ, judgment or decree of any governmental instrumentality applicable to the Company (except that various consents of, and filings with, governmental authorities may be required to be obtained or made, as the case may be, in connection or compliance with the provisions of the securities or blue sky laws of any jurisdiction). (6) Except as to the financial statements and other financial or statistical data included or incorporated by reference therein, upon which we do not pass, the Registration Statement, at the time it became effective, and the Prospectus, at the time it was filed with, or transmitted for filing to, the Commission pursuant to Rule 424 under the Securities Act, complied as to form in all material respects with the applicable requirements of the Securities Act and (except with respect to the statements of eligibility on Form T-1 and Form T-2 filed as exhibits to the Registration Statement, upon which we do not pass) the TIA, and the applicable instructions, rules and regulations of the Commission thereunder or pursuant to said instructions, rules and regulations are deemed to comply therewith; and, with respect to documents or portions thereof filed with the Commission pursuant to the Exchange Act, and incorporated by reference in the Prospectus pursuant to Item 12 of Form S-3, such documents or portions thereof, on the day first filed with the Commission, complied as to form in all material respects with the applicable provisions of the Exchange Act, and the applicable instructions, rules and regulations of the Commission thereunder or pursuant to said instructions, rules and regulations are deemed to comply therewith; the Registration Statement has become, and on the date hereof is, effective under the Securities Act; and, to the best of our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose are pending or threatened under Section 8(d) of the Securities Act. (7) An appropriate order has been entered by the Commission under the Holding Company Act authorizing the issuance and sale of the Bonds and the execution, delivery and performance by the Company of the Underwriting Agreement and the Trust Indenture; to the best of our knowledge, said order is in full force and effect; no further approval, authorization, consent or other order of any governmental body including without limitation the Nuclear Regulatory Commission (other than under the Securities Act, which has been duly obtained, or in connection or compliance with the provisions of the securities or blue sky laws of any jurisdiction) is legally required to permit the issuance and sale of the Bonds by the Funding Corporation pursuant to the Underwriting Agreement; and no further approval, authorization, consent or other order of any governmental body is legally required to permit the performance by the Company of its obligations with respect to the Bonds or under the Trust Indenture and the Underwriting Agreement. (8) Assuming the capacity of the Owner Participant (as defined in the Prospectus), the Owner Trustee and the Lease Indenture Trustee (as defined in the Prospectus) to engage in the transactions contemplated by the Lease Indenture (as defined in the Prospectus) and the Transaction Documents, (a) the Pledged Lessor Bonds (as defined in the Prospectus) are equally and ratably secured by a lien on and security interest in (i) the related Undivided Interest (as defined in the Prospectus) and (ii) the rights of the Owner Trustee under the Transaction Documents, including the right to receive all payments of Basic Rent (as defined in Appendix A to the Participation Agreement) and certain other payments made by the Company, subject to certain exceptions (including, but not limited to, the creation of liens in respect of moneys and securities not held by the Lease Indenture Trustee), and (b) the execution by the Owner Trustee and delivery to the Lease Indenture Trustee of the Lease Indenture and the Transaction Documents, and the filings and/or recordings heretofore effected, create a valid and perfected first lien thereon and security interest therein (subject only to Permitted Liens) in favor of Funding Corporation. The description of the Indenture Estate contained in the Lease Indenture is adequate under the laws of the State of Louisiana to create the lien therein that the Lease Indenture purports to create. In passing upon the forms of the Registration Statement and the Prospectus, we necessarily assume the correctness, completeness and fairness of the statements made by the Company and information included or incorporated by reference in the Registration Statement and the Prospectus and take no responsibility therefor, except insofar as such statements relate to us and as set forth in paragraph (4) above. In connection with the preparation by the Company of the Registration Statement and the Prospectus, we have had discussions with certain of the Company's officers and representatives, with other counsel for the Company and with the independent certified public accountants of the Company who examined certain of the financial statements included or incorporated by reference in the Registration Statement. Our examination of the Registration Statement and the Prospectus and our discussions did not disclose to us any information which gives us reason to believe that the Registration Statement, at the Effective Date, 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 that the Prospectus, at the time first filed with, or transmitted for filing to, the Commission pursuant to Rule 424 under the Securities Act and at the date hereof, 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. We do not express any opinion or belief as to the financial statements or other financial or statistical data included or incorporated by reference in the Registration Statement, the Prospectus or as to the statements of eligibility on Form T-1 and Form T-2 filed as exhibits to the Registration Statement or as to the information contained in the Prospectus Supplement under the caption "Certain Terms of the Collateral Bonds--Book-Entry Only System." [We have examined the portions of the information contained in the Registration Statement which are stated therein to have been made on our authority, and we believe such information to be correct.] We are members of the Louisiana Bar and do not hold ourselves out as experts on the laws of any other state. We have examined the opinions of even date herewith rendered to you by Reid & Priest LLP and Winthrop, Stimson, Putnam & Roberts, and we concur in the conclusions expressed therein insofar as they involve questions of Louisiana law. As to all matters of New York law, we have relied, with your approval, upon the opinion of even date herewith addressed to you by Reid & Priest LLP. The opinion set forth above is solely for the benefit of the addressees of this letter in connection with the Underwriting Agreement and the transactions contemplated thereunder and may not be relied upon in any manner by any other person or for any other purpose without our prior written consent, except that Reid & Priest LLP and Winthrop, Stimson, Putnam & Roberts may rely on this opinion as to all matters of Louisiana law in rendering their opinions required to be delivered under the Underwriting Agreement. Very truly yours, MONROE & LEMANN (A Professional Corporation) By: EXHIBIT B [Letterhead of Reid & Priest LLP] ______________, 1996 Morgan Stanley & Co. Incorporated Citicorp Securities, Inc. c/o Morgan Stanley & Co. Incorporated 1285 Broadway New York, New York 10036-8293 Ladies and Gentlemen: We, together with Monroe & Lemann (A Professional Corporation), of New Orleans, Louisiana, have acted as counsel for Louisiana Power & Light Company (the "Company") in connection with the issuance and sale to you pursuant to the Underwriting Agreement, effective ____________ __, 1996 (the "Underwriting Agreement"), among W3A Funding Corporation (the "Funding Corporation"), the Company and you, of $___________ aggregate principal amount of the Funding Corporation's Waterford 3 Secured Lease Obligation Bonds, _____% Series due ____ and $___________ aggregate principal amount of its Waterford 3 Secured Lease Obligation Bonds, _____% Series due ____ (collectively, the "Bonds"). The Bonds are being issued pursuant to the Collateral Trust Indenture, dated as of __________ __, 1996, as amended by Supplemental Indenture No. 1, dated as of __________ __, 1996 (the Collateral Trust Indenture, as so amended, being hereinafter referred to as the "Trust Indenture"), among the Funding Corporation, the Company and Bankers Trust Company, as trustee (the "Trustee"). This opinion is being rendered to you at the request of the Company. In our capacity as such counsel, we have either participated in the preparation of or have examined and are familiar with: (a) the Company's Restated Articles of Incorporation and By-Laws, each as amended; (b) the Underwriting Agreement; (c) the Trust Indenture; (d) the Registration Statement and Prospectus filed under the Securities Act; (e) the records of various corporate proceedings relating to the authorization, issuance and sale of the Bonds by the Funding Corporation and the execution and delivery by the Company of the Trust Indenture and the Underwriting Agreement; and (f) the proceedings before the Commission under the Holding Company Act relating to the issuance and sale of the Bonds by the Funding Corporation and the execution and delivery by the Company of the Trust Indenture and the Underwriting Agreement. We have also examined or caused to be examined such other documents and have satisfied ourselves as to such other matters as we have deemed necessary in order to render this opinion. We have not examined the Bonds, except specimens thereof, and we have relied upon a certificate of the Trustee as to the authentication and delivery thereof. Capitalized terms used herein and not otherwise defined have the meanings ascribed to such terms in the Underwriting Agreement. Subject to the foregoing and to the further exceptions and qualifications set forth below, we are of the opinion that: (1) The Trust Indenture has been duly and validly authorized by all necessary corporate action on the part of the Company, has been duly and validly executed and delivered by the Company, is a legal, valid and binding instrument enforceable against the Company in accordance with its terms, except as limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar laws affecting creditors' rights and general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law), and has been duly qualified under the TIA, and no proceedings to suspend such qualification have been instituted or, to our knowledge, threatened by the Commission. (2) The Underwriting Agreement has been duly authorized, executed and delivered by the Company. (3) The statements made in the Prospectus and the Prospectus Supplement under the captions "Selected Information", "Selected Information Relating to the Collateral Bonds", "Certain Terms of the Collateral Bonds", "Security and Source of Payment for the Collateral Bonds", "Description of the Collateral Bonds and the Indenture", "Description of the Lease Indentures", "Description of the Leases" and "Other Agreements", insofar as they purport to constitute summaries of the documents referred to therein, constitute accurate summaries of the terms of such documents in all material respects. (4) The execution, delivery and performance by the Company of the Underwriting Agreement and the Trust Indenture and the consummation of the transactions contemplated thereby (a) will not violate any provision of the Company's Restated Articles of Incorporation or By-Laws, each as amended, (b) will not violate any provision of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance on or security interest in (except as contemplated by the Trust Indenture) any of the assets of the Company pursuant to the provisions of, any mortgage, indenture, contract, agreement or other undertaking known to us (having made due inquiry with respect thereto) to which the Company is a party or which purports to be binding upon the Company or upon any of its assets, and (c) will not violate any provision of any law or regulation applicable to the Company or, to the best of our knowledge (having made due inquiry with respect thereto), any provision of any order, writ, judgment or decree of any governmental instrumentality applicable to the Company (except that various consents of, and filings with, governmental authorities may be required to be obtained or made, as the case may be, in connection or compliance with the provisions of the securities or blue sky laws of any jurisdiction). (5) Except as to the financial statements and other financial or statistical data included or incorporated by reference therein, upon which we do not pass, the Registration Statement, at the time it became effective, and the Prospectus, at the time it was filed with, or transmitted for filing to, the Commission pursuant to Rule 424 under the Securities Act, complied as to form in all material respects with the applicable requirements of the Securities Act and (except with respect to the statements of eligibility on Form T-1 and Form T-2 filed as exhibits to the Registration Statement, upon which we do not pass) the TIA, and the applicable instructions, rules and regulations of the Commission thereunder or pursuant to said instructions, rules and regulations are deemed to comply therewith; and, with respect to documents or portions thereof filed with the Commission pursuant to the Exchange Act, and incorporated by reference in the Prospectus pursuant to Item 12 of Form S-3, such documents or portions thereof, on the day first filed with the Commission, complied as to form in all material respects with the applicable provisions of the Exchange Act, and the applicable instructions, rules and regulations of the Commission thereunder or pursuant to said instructions, rules and regulations are deemed to comply therewith; the Registration Statement has become, and on the date hereof is, effective under the Securities Act; and, to the best of our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose are pending or threatened under Section 8(d) of the Securities Act. (6) An appropriate order has been entered by the Commission under the Holding Company Act authorizing the issuance and sale of the Bonds and the execution, delivery and performance by the Company of the Trust Indenture and Underwriting Agreement; to the best of our knowledge, said order is in full force and effect; no further approval, authorization, consent or other order of any governmental body including without limitation the Nuclear Regulatory Commission (other than under the Securities Act, which has been duly obtained, or in connection or compliance with the provisions of the securities or blue sky laws of any jurisdiction) is legally required to permit the issuance and sale of the Bonds by the Funding Corporation pursuant to the Underwriting Agreement; and no further approval, authorization, consent or other order of any governmental body is legally required to permit the performance by the Company of its obligations with respect to the Bonds or under the Trust Indenture and the Underwriting Agreement. In passing upon the forms of the Registration Statement and the Prospectus, we necessarily assume the correctness, completeness and fairness of the statements made by the Company and information included in the Registration Statement and the Prospectus and take no responsibility therefor, except insofar as such statements relate to us and as set forth in paragraph (3) above. In connection with the preparation by the Company of the Registration Statement and the Prospectus, we have had discussions with certain of the Company's officers and representatives, with other counsel for the Company and with the independent certified public accountants of the Company who examined certain of the financial statements included or incorporated by reference in the Registration Statement. Our examination of the Registration Statement and the Prospectus and our discussions did not disclose to us any information which gives us reason to believe that the Registration Statement, at the Effective Date, 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 that the Prospectus, at the time first filed with, or transmitted for filing to, the Commission pursuant to Rule 424 under the Securities Act and at the date hereof, 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. We do not express any opinion or belief as to the financial statements or other financial or statistical data included or incorporated by reference in the Registration Statement or the Prospectus, as to the statements of eligibility on Form T-1 and Form T-2 filed as exhibits to the Registration Statement or as to the information contained in the Prospectus Supplement under the caption "Certain Terms of the Collateral Bonds--Book-Entry Only System." [We have examined the portions of the information contained in the Registration Statement which are stated therein to have been made on our authority, and we believe such information to be correct.] We are members of the New York Bar and do not hold ourselves out as experts on the laws of any other state. As to all matters of Louisiana law, we have relied upon the opinion of even date herewith addressed to you of Monroe & Lemann (A Professional Corporation). We have not examined into and are not passing upon matters relating to title to property, franchises or the lien of the Trust Indenture. The opinion set forth above is solely for the benefit of the addressees of this letter in connection with the Underwriting Agreement and the transactions contemplated thereunder and may not be relied upon in any manner by any other person or for any other purpose without our prior written consent, except that Monroe & Lemann (A Professional Corporation) may rely on this opinion as to matters of New York law in rendering its opinion required to be delivered under the Underwriting Agreement. Very truly yours, REID & PRIEST LLP EXHIBIT C [Letterhead of Reid & Priest LLP] ______________, 1996 Morgan Stanley & Co. Incorporated Citicorp Securities, Inc. c/o Morgan Stanley & Co. Incorporated 1285 Broadway New York, New York 10036-8293 Ladies and Gentlemen: We have acted as special counsel to W3A Funding Corporation ("Funding Corporation"), in connection with the issuance and sale to you of $___________ aggregate principal amount of its Waterford 3 Secured Lease Obligation Bonds, _____% Series due ____ and $___________ of its Waterford 3 Secured Lease Obligation Bonds, _____% Series due ____ (collectively, the "Bonds"), pursuant to the Underwriting Agreement, effective __________ __, 1996 (the "Underwriting Agreement"), among Funding Corporation, Louisiana Power & Light Company ("LP&L") and you. The Bonds are being issued pursuant to the Collateral Trust Indenture, dated as of ________ __, 1996 (the "Original Indenture"), as amended by Supplemental Indenture No. 1 (the "Supplemental Indenture"), dated as of ___________ __, 1996 (the Original Indenture, as so amended, being hereinafter referred to as the "Trust Indenture"), among Funding Corporation, LP&L and Bankers Trust Company, as Trustee (the "Trustee"). This opinion is being rendered to you at the request of Funding Corporation. In our capacity as such counsel, we have either participated in the preparation of or have examined and are familiar with: (a) Funding Corporation's Certificate of Incorporation and By-Laws, each as amended; (b) the Underwriting Agreement; (c) the Trust Indenture; (d) the Registration Statement and Prospectus filed under the Securities Act; (e) the records of various corporate proceedings relating to the authorization, issuance and sale of the Bonds by Funding Corporation and the execution and delivery by Funding Corporation of the Trust Indenture and the Underwriting Agreement; and (f) the proceedings before the Commission under the Holding Company Act relating to the issuance and sale of the Bonds by Funding Corporation, and the execution and delivery by Funding Corporation of the Trust Indenture and the Underwriting Agreement. We have also examined or caused to be examined such other documents and have satisfied ourselves as to such other matters as we have deemed necessary in order to render this opinion. We have not examined the Bonds, except specimens thereof, and we have relied upon a certificate of the Trustee as to the authentication and delivery thereof. Capitalized terms used herein and not otherwise defined have the meanings ascribed to such terms in the Underwriting Agreement. Subject to the foregoing and to the further exceptions and qualifications set forth below, we are of the opinion that: (1) Funding Corporation is duly organized and validly existing as a corporation in good standing under the laws of the State of Delaware and has due corporate power and authority to own its properties and conduct its business as described in the Prospectus. (2) The Trust Indenture has been duly and validly authorized by all necessary corporate action on the part of Funding Corporation, has been duly and validly executed and delivered by Funding Corporation, is a legal, valid and binding instrument enforceable against Funding Corporation in accordance with its terms, except as limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar laws affecting creditors' rights and general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law), and has been duly qualified under the TIA, and no proceedings to suspend such qualification have been instituted or, to our knowledge, threatened by the Commission. (3) Funding Corporation has executed such instruments and complied with such other formalities as are required by the Trust Indenture as a condition precedent to the creation and issuance of the Bonds. (4) The Bonds have been duly and validly authorized, executed and issued by Funding Corporation and are legal, valid and binding obligations of Funding Corporation enforceable in accordance with their terms, except as limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar laws affecting creditors' rights and general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law), are entitled to the benefit of the security afforded by the Trust Indenture. (5) The Registration Statement has become, and on the date hereof is, effective under the Securities Act, and to the best of our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose are pending or threatened under Section 8(d) of the Act. (6) An appropriate order has been entered by the Commission under the Holding Company Act authorizing the issuance and sale of the Bonds and the execution, delivery and performance by Funding Corporation of the Trust Indenture and Underwriting Agreement; to the best of our knowledge, said order is in full force and effect; no further approval, authorization, consent or other order of any governmental body (other than under the Securities Act, which has been duly obtained, or in connection or compliance with the provisions of the securities or blue sky laws of any jurisdiction) is legally required to permit the issuance and sale of the Bonds by the Funding Corporation pursuant to the Underwriting Agreement; and no further approval, authorization, consent or other order of any governmental body is legally required to permit the performance by the Funding Corporation of its obligations with respect to the Bonds or under the Trust Indenture and the Underwriting Agreement. (7) It is not necessary for Funding Corporation to register as an investment company pursuant to the Investment Company Act of 1940, as amended, in order to participate in the transactions contemplated by the Prospectus. (8) The Underwriting Agreement has been duly authorized, executed and delivered by Funding Corporation. (9) The execution, delivery and performance by Funding Corporation of the Underwriting Agreement, the Bonds or the Trust Indenture and the consummation of the transactions contemplated thereby (a) will not violate any provision of Funding Corporation's Certificate of Incorporation or By-Laws, each as amended, (b) will not violate any provision of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance on or security interest in (except as contemplated by the Trust Indenture) any of the assets of Funding Corporation pursuant to the provisions of, any mortgage, indenture, contract, agreement or other undertaking known to us (having made due inquiry with respect thereto) to which Funding Corporation is a party or which purports to be binding upon the Company or upon any of its assets, and (c) will not violate any provision of any law or regulation applicable to Funding Corporation or, to the best of our knowledge (having made due inquiry with respect thereto), any provision of any order, writ, judgment or decree of any governmental instrumentality applicable to Funding Corporation (except that various consents of, and filings with, governmental authorities may be required to be obtained or made, as the case may be, in connection or compliance with the provisions of the securities or blue sky laws of any jurisdiction). (10) The statements made in the Prospectus and the Prospectus Supplement under the captions "Selected Information", "Selected Information Relating to the Collateral Bonds", "Certain Terms of the Collateral Bonds", "Security and Source of Payment for the Collateral Bonds", "W3A Funding Corporation", "Description of the Collateral Bonds and the Indenture", "Description of the Lease Indentures", "Description of the Leases" and "Other Agreements", insofar as they purport to constitute summaries of documents referred to therein, constitute accurate summaries of the terms of such documents in all material respects. (11) No recordation, registration or filing of the Original Indenture, the Supplemental Indenture or any other supplemental indenture or instrument of further assurance is necessary to make effective the lien intended to be created by the Trust Indenture or fully to preserve and protect the rights of the bondholders and the Trustee. The opinion expressed in paragraph (11) above assumes (x) the due authorization, execution and delivery of the Original Indenture and the Supplemental Indenture by each of the parties thereto (other than Funding Corporation) and that the same constitute the legal, valid and binding agreements of such parties, enforceable in accordance with their respective terms, (y) that no property of the types described in the Granting Clauses of the Original Indenture has been subjected to the lien of the Trust Indenture, and (z) that the Trustee has obtained and continues to retain possession of the Pledged Lessor Bonds (as defined in the Prospectus). In connection with such opinion, we note that each of the filings and recordings of the Original Indenture and the Supplemental Indenture described in Schedule 1 to the Refunding Agreements has been made. In rendering the opinions set forth above, we have not passed upon and do not purport to pass upon the application of any laws of any jurisdiction other than the Federal laws of the United States, the law of the State of New York and the General Corporation Law of the State of Delaware. The opinion set forth above is solely for the benefit of the addressees of this letter in connection with the Underwriting Agreement and the transactions contemplated thereunder and may not be relied upon in any manner or for any other purpose by any other person without our prior written consent, except that the Trustee, Funding Corporation and LP&L are entitled to rely on this opinion as if addressed to them. Very truly yours, REID & PRIEST LLP EXHIBIT D [Letterhead of Winthrop, Stimson, Putnam & Roberts] ______________, 1996 Morgan Stanley & Co. Incorporated Citicorp Securities, Inc. c/o Morgan Stanley & Co. Incorporated 1285 Broadway New York, New York 10036-8293 Ladies and Gentlemen: We have acted as counsel for you as the several underwriters of $___________ in aggregate principal amount of Waterford 3 Secured Lease Obligation Bonds, _____% Series due ____ and $___________ in aggregate principal amount of Waterford 3 Secured Lease Obligation Bonds, _____% Series due ____ (collectively, the "Bonds") issued by W3A Funding Corporation (the "Funding Corporation") pursuant to the Underwriting Agreement, effective __________ __, 1996 (the "Underwriting Agreement"), among Funding Corporation, Louisiana Power & Light Company ("LP&L") and you. The Bonds are being issued pursuant to the Collateral Trust Indenture, dated as of ________ __, 1996, as amended by Supplemental Indenture No. 1, dated as of ___________ __, 1996 (the Collateral Trust Indenture, as so amended, being hereinafter referred to as the "Trust Indenture"), among Funding Corporation, LP&L and Bankers Trust Company, as Trustee (the "Trustee"). We are members of the Bar of the State of New York and, for purposes of this opinion, do not hold ourselves out as experts on the laws of any jurisdiction other than the State of New York and the United States of America. We have, with your consent, relied upon an opinion of even date herewith addressed to you of Monroe & Lemann (A Professional Corporation) as to all matters of Louisiana law related to this opinion. We have reviewed said opinion and believe that it is satisfactory. We have also reviewed the opinion of Reid & Priest LLP required by Section 8(d) of the Underwriting Agreement, and we believe said opinion to be satisfactory. In our capacity as your counsel, we have examined such documents and have satisfied ourselves as to such other matters as we have deemed necessary in order to render this opinion. As to various questions of fact material to this opinion, we have relied upon representations of the Company and the Funding Corporation and statements in the Registration Statement hereinafter mentioned. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to the originals of the documents submitted to us as certified or photostatic copies. We have not examined the Bonds, except specimens thereof, and we have relied upon a certificate of the Trustee as to the authentication and delivery thereof. We have not examined into, and are expressing no opinion or belief as to matters relating to, incorporation of the Company or the Funding Corporation, titles to property, franchises or the liens of the Trust Indenture or the Lease Indenture (as defined in the Prospectus). Capitalized terms used herein and not otherwise defined have the meanings ascribed to such terms in the Underwriting Agreement. Subject to the foregoing and to the further exceptions and qualifications set forth below, we are of the opinion that: (1) The Trust Indenture has been duly and validly authorized by all necessary corporate action on the part of the Company, has been duly and validly executed and delivered by the Company, and is a legal, valid and binding instrument enforceable against the Company in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar laws affecting creditors' rights and general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), and is qualified under the TIA, and, to our knowledge, no proceedings to suspend such qualification have been instituted or threatened by the Commission. (2) The Bonds are legal, valid and binding obligations of the Funding Corporation, enforceable in accordance with their terms, except as limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar laws affecting creditors' rights and general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law). (3) The statements made in the Prospectus and the Prospectus Supplement under the captions "Selected Information", "Selected Information Relating to the Collateral Bonds", "Certain Terms of the Collateral Bonds", "Security and Source of Payment for the Collateral Bonds", "Description of the Collateral Bonds and the Indenture", "Description of the Lease Indentures", "Description of the Leases" and "Other Agreements", insofar as they purport to constitute summaries of the documents referred to therein, constitute accurate summaries of the terms of such documents in all material respects. (4) The Underwriting Agreement has been duly authorized, executed and delivered by the Funding Corporation and the Company. (5) An appropriate order has been issued by the Commission under the Holding Company Act authorizing the issuance and sale of the Bonds and, to the best of our knowledge, such order is in full force and effect; and no further approval, authorization, consent or other order of any governmental body (other than under the Securities Act, which has been duly obtained, or in connection or compliance with the provisions of the securities or "blue sky" laws of any jurisdiction) is legally required to permit the issuance and sale of the Bonds by the Funding Corporation pursuant to the Underwriting Agreement. (6) Except in each case as to the financial statements and other financial or statistical data included or incorporated by reference therein, upon which we do not pass, the Registration Statement, at the time it became effective, and the Prospectus, at the time it was filed with, or transmitted for filing to, the Commission pursuant to Rule 424 under the Securities Act, complied as to form in all material respects with the applicable requirements of the Securities Act and (except with respect to the statements of eligibility on Form T-1 and Form T-2 filed as exhibits to the Registration Statement, upon which we do not pass) the TIA, and the applicable instructions, rules and regulations of the Commission thereunder or pursuant to said instructions, rules and regulations are deemed to comply therewith; and, with respect to documents or portions thereof filed with the Commission pursuant to the Exchange Act, and incorporated by reference in the Prospectus pursuant to Item 12 of Form S-3, such documents or portions thereof, on the day first filed with the Commission, complied as to form in all material respects with the applicable provisions of the Exchange Act, and the applicable instructions, rules and regulations of the Commission thereunder or pursuant to said instructions, rules and regulations are deemed to comply therewith; the Registration Statement has become, and on the date hereof is, effective under the Securities Act; and, to our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose are pending or threatened under Section 8(d) of the Securities Act. In passing upon the form of the Registration Statement and the form of the Prospectus, we necessarily assume the correctness, completeness and fairness of statements made by the Company and information included or incorporated by reference in the Registration Statement and the Prospectus and take no responsibility therefor, except insofar as such statements relate to us and as set forth in paragraph (3) above. In the course of the preparation by the Company of the Registration Statement and the Prospectus, we have had discussions with certain officers, employees and representatives of the Funding Corporation, the Company and Entergy Services, Inc., with counsel for the Funding Corporation and the Company and with your representatives. Our review of the Registration Statement and the Prospectus, and our discussions, did not disclose to us any information which gives us reason to believe that the Registration Statement, at the Effective Date, 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 that the Prospectus, at the time first filed with, or transmitted for filing to, the Commission pursuant to Rule 424 under the Securities Act and at the date hereof, 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. We do not express any opinion or belief as to the financial statements or other financial or statistical data included or incorporated by reference in the Registration Statement or Prospectus, as to the statements of eligibility on Form T-1 and Form T-2 filed as exhibits to the Registration Statement or as to the information contained in the Prospectus Supplement under the caption "Certain Terms of the Collateral Bonds--Book-Entry Only System.". This opinion is solely for the benefit of the addressees hereof in connection with the Underwriting Agreement and the transactions contemplated thereunder and may not be relied upon in any manner by any other person or for any other purpose, without our prior written consent. Very truly yours, WINTHROP, STIMSON, PUTNAM & ROBERTS EXHIBIT E ITEMS CONTAINED IN EXCHANGE ACT DOCUMENTS PURSUANT TO SECTION 8(f)(iv) OF THE UNDERWRITING AGREEMENT FOR INCLUSION IN THE LETTER OF THE ACCOUNTANTS REFERRED TO THEREIN Caption Pages Items EX-4 3 Exhibit 4(a) COLLATERAL TRUST INDENTURE dated as of __________, 19__ AMONG W3A FUNDING CORPORATION, LOUISIANA POWER & LIGHT COMPANY AND BANKERS TRUST COMPANY not in its individual capacity, but solely as Trustee ___________ Providing for the Issuance from Time to Time of Securities To Be Issued in One or More Series Issuance of Securities in connection with the Lease of Three Undivided Interests in Unit No. 3 of the Waterford Steam Electric Generating Station St. Charles Parish, Louisiana W3A FUNDING CORPORATION LOUISIANA POWER & LIGHT COMPANY Reconciliation and tie between Indenture dated as of October 1, 1994 and Trust Indenture Act of 1939 Section Section of Act of Indenture 310(a)(1) 9.09 (2) 9.09 (3) 9.15(b)(2) (4) Inapplicable (5) 9.09 (b) 9.08,9.10 (c) 9.13 311(a) 9.13 (b) 9.13 (c) Inapplicable 312(a) 10.01 (b) 10.01 (c) 10.01 313(a) 10.02 (b) 10.02 (c) 10.02 (d) 10.02 314(a) 10.02 (b) 5.06 (c)(1) 1.02 (2) 1.02 (3) 2.04(g)(i) (d)(1) 5.11 (2) Inapplicable (3) 2.04(g)(ii) (e) 1.02 315(a) 9.01, 9.03 (b) 9.02 (c) 9.01 (d)(1) 9.01 (2) 9.01 (3) 9.01 (e) 8.10 316(a)(1)(A) 8.07 (B) 8.08 (2) Inapplicable (a) (last sentence) 1.01 ("Outstanding") (b) 8.11 317(a)(1) 8.05(a) (2) 8.05(d) (b) 5.03 9.14(a) 318(a) 1.07 ____________________ Bond: This reconciliation and tie shall not, for any purpose, be deemed to constitute a part of the Indenture. TABLE OF CONTENTS Page RECITALS 1 GRANTING CLAUSES 1 ARTICLE ONE Definitions and Other Provisions of General Application Section 1.01. Definitions 2 Section 1.02. Compliance Certificates and Opinions 7 Section 1.03. Form of Documents Delivered to Trustee 8 Section 1.04. Acts of Holders 8 Section 1.05. Notices, etc., to Trustee, Company and LP&L 9 Section 1.06. Notices to Holders; Waiver 9 Section 1.07. Conflict with Trust Indenture Act 10 Section 1.08. Effect of Heading and Table of Contents 10 Section 1.09. Successors and Assigns 10 Section 1.10. Separability Clause 10 Section 1.11. Benefits of Indenture 10 Section 1.12. Governing Law 10 Section 1.13. Legal Holidays 11 ARTICLE TWO The Securities Section 2.01. Form of Security to Be Established by Series Supplemental Indenture 11 Section 2.02. Form of Trustee's Authentication 11 Section 2.03. Amount Unlimited; Issuable in Series; Limitations on Issuance 11 Section 2.04. Authentication and Delivery of Securities 13 Section 2.05. Form and Denominations 14 Section 2.06. Execution of Securities 14 Section 2.07. Temporary Securities 15 Section 2.08. Registration, Transfer and Exchange 15 Section 2.09. Mutilated, Destroyed, Lost and Stolen Securities 16 Section 2.10. Payment of Interest; Interest Rights Preserved 16 Section 2.11. Persons Deemed Owners 18 Section 2.12. Cancellation 18 Section 2.13. Dating of Securities; Computation of Interest 18 Section 2.14. Source of Payments; Rights and Liabilities of Lessors, Owner Participants and Lease Indenture Trustees 18 Section 2.15. Application of Proceeds from the Sale of Securities 18 Section 2.16. Principal Amount of Securities Payable Without Presentment or Surrender. 19 ARTICLE THREE Provisions as to Pledged Property Section 3.01. Holding of Pledged Securities 19 Section 3.02. Disposition of Payments on Pledged Property. 19 Section 3.03. Exercise of Rights and Powers Under Pledged Lessor Bonds and Lease Indentures 19 Section 3.04. Certain Actions in Case of Judicial Proceedings 20 Section 3.05. Cash Held by Trustee Treated as a Deposit 20 ARTICLE FOUR Withdrawal of Collateral Section 4.01. Withdrawal of Collateral 20 Section 4.02. Reassignment of Pledged Lessor Bonds upon Payment 20 ARTICLE FIVE Covenants Section 5.01. Payment of Principal, Premium, if any, and Interest 20 Section 5.02. Maintenance of Office or Agency 21 Section 5.03. Money for Security Payments to be Held in Trust 21 Section 5.04. Maintenance of Corporate Existence 22 Section 5.05. Protection of Pledged Property. 22 Section 5.06. Opinions as to Pledged Property. 23 Section 5.07. Performance of Obligations 23 Section 5.08. Negative Covenants 23 Section 5.09. Annual Statement as to Compliance 24 Section 5.10. Delivery of Certificate of Independent Public Accountant 24 Section 5.11. Delivery of Certificate of Engineer, Appraiser or Other Expert 24 ARTICLE SIX Redemption of Securities Section 6.01. Applicability of Article 25 Section 6.02. Election to Redeem; Notice to Trustee 25 Section 6.03. Selection by Trustee of Securities to be Redeemed. 25 Section 6.04. Notice of Redemption. 26 Section 6.05. Securities Payable on Redemption Date 27 Section 6.06. Securities Redeemed in Part. 27 ARTICLE SEVEN Sinking Funds Section 7.01. Applicability of Article 27 Section 7.02. Sinking Funds for Securities 28 ARTICLE EIGHT EVENTS OF DEFAULT; REMEDIES Section 8.01. Events of Default 28 Section 8.02. Acceleration of Maturity; Rescission and Annulment 29 Section 8.03. Trustee's Power of Sale of Pledged Property; Notice Required; Power to Bring Suit 30 Section 8.04. Incidents of Sale of Pledged Property 30 Section 8.05. Judicial Proceedings Instituted by Trustee 31 Section 8.06. Holders May Demand Enforcement of Rights by Trustee 33 Section 8.07. Control by Holders 33 Section 8.08. Waiver of Past Defaults 34 Section 8.09. Proceedings Instituted by Holder 34 Section 8.10. Undertaking To Pay Court Costs 34 Section 8.11. Right of Holders To Receive Payment Not To Be Impaired 35 Section 8.12. Application of Moneys Collected by Trustee 35 Section 8.13. Securities Held by Certain Persons Not To Share in Distribution. 36 Section 8.14. Waiver of Appraisement, Valuation, Stay, Right to Marshalling 36 Section 8.15. Remedies Cumulative; Delay or Omission Not a Waiver 36 ARTICLE NINE The Trustee Section 9.01. Certain Duties and Responsibilities 37 Section 9.02. Notice of Defaults 37 Section 9.03. Certain Rights of Trustee 37 Section 9.04. Not Responsible for Recitals or Issuance of Securities. 38 Section 9.05. May Hold Securities 38 Section 9.06. Funds May Be Held by Trustee or Paying Agent 38 Section 9.07. Compensation and Reimbursement of Trustee and Authorized Agents 39 Section 9.08. Disqualification; Conflicting Interests 39 Section 9.09. Corporate Trustee Required; Eligibility 39 Section 9.10 Resignation and Removal; Appointment of Successor. 40 Section 9.11. Acceptance of Appointment by Successor. 41 Section 9.12. Merger, Conversion, Consolidation or Succession to Business. 41 Section 9.13. Preferential Collection of Claims against any Obligor 41 Section 9.14. Authorized Agents 41 Section 9.15. Co-Trustee or Separate Trustee. 43 ARTICLE TEN Holders' Lists and Reports by Trustee and LP&L Section 10.01. LP&L to Furnish Trustee Names and Addresses of Holders. 44 Section 10.02. Reports by Trustee and LP&L 45 ARTICLE ELEVEN Supplemental Indentures Section 11.01. Supplemental Indentures Without Consent of Holders. 45 Section 11.02. Supplemental Indenture With Consent of Holders 46 Section 11.03. Documents Affecting Immunity or Indemnity 47 Section 11.04. Election of Supplemental Indentures 47 Section 11.05. Effect of Supplemental Indentures 47 Section 11.06. Conformity with Trust Indenture Act 47 Section 11.07. Reference in Securities to Supplemental Indentures. 48 ARTICLE TWELVE Satisfaction and Discharge Section 12.01. Satisfaction and Discharge of Securities 48 Section 12.02. Satisfaction and Discharge of Indenture. 49 Section 12.03. Application of Trust Money 50 ARTICLE THIRTEEN Meetings of Holders of Securities; Action without Meeting Section 13.01.Purposes for Which Meetings May Be Called 50 Section 13.02. Call, Notice and Place of Meetings. 50 Section 13.03. Persons Entitled to Vote at Meetings 51 Section 13.04. Quorum; Action. 51 Section 13.05. Attendance at Meetings; Determination of Voting Rights; Conduct and Adjournment of Meetings 52 Section 13.06. Counting Votes and Recording Action of Meetings. 52 Section 13.07. Action Without Meeting 53 ARTICLE FOURTEEN Liability of the Company Solely Corporate; No Liability of LP&L Section 14.01. Liability of the Company Solely Corporate. 53 Section 14.02. No Liability of LP&L 53 PARTIES 51 EXHIBIT A - Identification of Certain Documents and Parties Thereto COLLATERAL TRUST INDENTURE Collateral Trust Indenture, dated as of __________, 199_, among W3A Funding Corporation, a Delaware corporation (the "Company"), having its principal office and mailing address at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, Louisiana Power & Light Company, a Louisiana corporation ("LP&L"), having its principal office and mailing address at 639 Loyola Avenue, New Orleans, Louisiana 70113 and Bankers Trust Company, a New York banking corporation, not in its individual capacity but solely as trustee (hereinafter called the "Trustee") having its corporate trust office at Four Albany Street, New York, New York 10006. W I T N E S S E T H: Whereas, the Company has duly authorized the creation of an issue of its bonds, notes or other evidences of indebtedness to be issued in one or more series (the "Securities") up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of this Indenture; and to secure the Securities and to provide for the authentication and delivery thereof by the Trustee, the Company has duly authorized the execution and delivery of this Indenture; and Whereas, all acts necessary to make this Indenture a valid instrument for the security of the Securities, in accordance with its and their terms, have been done; Now, Therefore, This Indenture Witnesseth, that, to secure the payment of the principal of and premium, if any, and interest on all the Securities authenticated and delivered hereunder and issued by the Company and outstanding, and the performance of the covenants therein and herein contained, and in consideration of the premises and of the covenants herein contained and of the purchase of the Securities by the holders thereof, and of the sum of one dollar ($1.00) paid to the Company by the Trustee at or before the delivery hereof, the receipt whereof is hereby acknowledged, the Company by these presents does grant, bargain, sell, release, convey, assign, pledge, transfer, mortgage, hypothecate and confirm unto the Trustee all and singular the following (which collectively are hereinafter called the "Pledged Property"), excluding, in any event, any moneys which are specifically stated herein not to constitute part of the Pledged Property, to wit: RECITALS All Pledged Lessor Bonds (as hereinafter defined) as shall be actually pledged and assigned by the Company to the Trustee pursuant to the Series Supplemental Indentures or other supplemental indentures to be executed and delivered as provided in this Indenture, together with the interest of the Company, if any, in the Lease Indentures (as hereinafter defined) securing said Pledged Lessor Bonds. GRANTING CLAUSES Any property, including cash, that may, from time to time, hereafter be subjected to the lien and/or pledge hereof by the Company or which, pursuant to any provision of this Indenture or any Series Supplemental Indenture or other supplemental indentures to be executed and delivered as provided in this Indenture, may become subjected to the lien and/or pledge hereof; and the Trustee is hereby authorized to receive the same at any time as additional security hereunder. Such subjection to the lien hereof of any such property as additional security may be made subject to any reservations, limitations or conditions which shall be set forth in a written instrument executed by the Company and/or by the Trustee respecting the scope or priority of such lien and/or pledge or the use and disposition of such property or the proceeds thereof. To Have and to Hold the Pledged Property unto the Trustee and its successors and assigns forever subject to the terms of this Indenture, including, without limitation, Section 12.01. But In Trust, Nevertheless, for the equal and proportionate benefit and security of the holders from time to time of all the Securities authenticated and delivered hereunder and issued by the Company and outstanding, without any priority of any one Security over any other. And Upon The Trusts and subject to the covenants and conditions hereinafter set forth. ARTICLE ONE Definitions and Other Provisions of General Application Section 1.01. Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular; (2) all other terms used herein which are defined in the Trust Indenture Act (as hereinafter defined), either directly or by reference therein, have the meanings assigned to them therein; (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles; (4) all reference in this Indenture to designated "Articles", "Sections" and other subdivisions are to the designated Articles, Sections and other subdivisions of this Indenture; and (5) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. Certain terms, used principally in Article Nine, are defined in that Article. "Act", when used with respect to any Holder, has the meaning specified in Section 1.04. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control", when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Authenticating Agent" means any Person acting as Authenticating Agent hereunder pursuant to Section 9.14. "Authorized Agent" means any Paying Agent or Security Registrar or Authenticating Agent or other agent appointed by the Trustee in accordance with this Indenture to perform any function which this Indenture authorizes the Trustee or such agent to perform. "Board of Directors" means, when used with respect to the Company, the board of directors of the Company and, when used with respect to LP&L, the board of directors of LP&L, or, in either case, any committee of that board duly authorized to act for it hereunder. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company or LP&L, as the case may be, to have been duly adopted by the Board of Directors of such entity and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means any day other than a Saturday or Sunday or other day on which banks in New Orleans, Louisiana, New York, New York or the cities in which the Indenture Trustee's Offices (as defined in the respective Lease Indentures) are located, are authorized or obligated to be closed. "Change" with respect to any instrument means any consent, amendment, waiver, approval, notice or direction or the execution, grant or giving of any thereof. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties on such date. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor corporation. "Company Request" or "Company Order" means a written request or order, as the case may be, signed in the name of the Company by its President or one of its Vice Presidents, and by its Treasurer, Secretary, or one of its Assistant Treasurers or Assistant Secretaries, and delivered to the Trustee. "Corporate Trust Office" means the principal office of the Trustee at which at any particular time corporate trust business of the Trustee shall be administered, which at the date of this Indenture is Four Albany Street, New York, New York 10006, Attention: Corporate Trust & Agency Group_Public Utilities Group, or such other office as may be designated by the Trustee to the Company, LP&L and each Securityholder. "Event of Default" has the meaning specified in Section 8.01. "Extension Letter" means the Extension Letter, to be dated the date of the original issuance of a series of Pledged Lessor Bonds and addressed to the Trustee by the parties to the Participation Agreement in accordance with which such series of Pledged Lessor Bonds was issued, extending to the Trustee the representations, warranties and covenants of such parties referred to in Section 10(c)(8) of such Participation Agreement. "Holder" or "Securityholder" means a Person in whose name a Security is registered in the Security Register. "Indenture" means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof. "Initial Interest Payment Date" with respect to any series of Securities means the date of the Stated Maturity of the initial installment of interest on Securities of such series. "Installment Payment Amount", when used with respect to any Security the principal of which is payable in installments without presentment or surrender, means the amount of the installment payment of principal due and payable on each Installment Payment Date other than the Stated Maturity date thereof. "Installment Payment Date", when used with respect to any Security the principal of which is payable in installments without presentment or surrender, means each date on which an installment payment of principal is due and payable on such Security, as set forth in the Series Supplemental Indenture creating the Securities of such series. "LP&L" shall mean Louisiana Power & Light Company, a Louisiana corporation, and its permitted successors and assigns. "Lease" means each Lease identified in Exhibit A hereto, as such Lease may be amended or supplemented from time to time pursuant to the applicable provisions thereof; "Leases" means each and every Lease. "Lease Indenture" means each Lease Indenture identified in Exhibit A hereto, as such Lease Indenture may be amended or supplemented from time to time pursuant to the applicable provisions thereof; "Lease Indentures" means each and every Lease Indenture. "Lease Indenture Estate" shall have the meaning set forth in each Lease Indenture. "Lease Indenture Trustee" means each Lease Indenture Trustee identified in Exhibit A hereto, until a successor Lease Indenture Trustee shall have become such pursuant to the applicable provisions of the Lease Indenture to which such Lease Indenture Trustee is a party, and thereafter "Lease Indenture Trustee" means the successor Lease Indenture Trustee; "Lease Indenture Trustees" means each and every Lease Indenture Trustee. "Lease Payments" with respect to any Lease shall mean amounts payable under such Lease in respect of (i) basic rent, (ii) casualty value, (iii) special casualty value, (iv) any amount determined by reference to casualty value or special casualty value or (v) any other amounts payable in connection with termination of such Lease, in each case as more fully described in and assigned pursuant to the related Lease Indenture; "Lease Payments" with respect to all Leases means the aggregate of Lease Payments under any and all Leases. "Lessor" or "Owner Trustee" means any Lessor or Owner Trustee identified in Exhibit A hereto, until a successor shall have become such pursuant to the applicable provisions of the related Trust Agreement identified in such schedule, and thereafter "Lessor" or "Owner Trustee" means such successor; "Lessors" or "Owner Trustees" means each and every Lessor or Owner Trustee. "Lessor Bond" means any bond issued by a Lessor under a Lease Indenture. "Lien of this Indenture" or "lien hereof" means the lien and security interest created by these presents, or created by any concurrent or subsequent conveyance to the Trustee (whether made by the Company or any other Person and whether pursuant to a Series Supplemental Indenture or otherwise), or otherwise created, making any property a part of the Pledged Property held by the Trustee for the benefit of the Securities Outstanding hereunder. "Obligor", when used with reference to the Securities or this Indenture, means LP&L and any successor to the obligations of LP&L under a Lease, and does not include the Trustee, a Lease Indenture Trustee, an Owner Trustee or an Owner Participant so long as they have not assumed such obligations; provided, however, that no reference to LP&L as an Obligor herein shall be construed as implying any guaranty or assumption of the Securities or the obligations represented thereby by LP&L. "Officers' Certificate" means a certificate signed by the President or any Vice President and the Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary of LP&L, any Lessor or the Company, as the case may be, and delivered to the Trustee. "Opinion of Counsel" means a written opinion of counsel for any Person either expressly referred to herein or otherwise satisfactory to the Trustee which may include, without limitation, counsel to the Company, any Lessor, any Lease Indenture Trustee, any Owner Participant or LP&L, whether or not such counsel is an employee of any of them. "Outstanding," when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (i) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (ii) Securities or portions thereof deemed to have been paid within the meaning of Section 12.01 hereof; and (iii) Securities which have been paid pursuant to Section 2.09 or in exchange for or in lieu of which other Securities have been issued, authenticated and delivered pursuant to this Indenture, other than any Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; provided, however, that in determining whether or not the Holders of the requisite principal amount of the Securities Outstanding under this Indenture, or the Outstanding Securities of any series, have given any request, demand, authorization, direction, notice, consent or waiver hereunder or whether or not a quorum is present at a meeting of Holders, Securities owned by the Company or LP&L, or any Affiliate of either thereof, unless such Persons own all Securities Outstanding under this Indenture, or all Outstanding Securities of each such series, as the case may be, shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver or upon any such determination as to the presence of a quorum, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded; provided, however, that Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or LP&L, or any Affiliate of either thereof. "Owner Participant" means any Owner Participant identified in Exhibit A hereto, until a transferee, successor or assignee thereof shall have become such pursuant to the applicable provisions of the Participation Agreement to which such Owner Participant is a party, and thereafter "Owner Participant" means such transferee, successor or assignee; "Owner Participants" means each and every Owner Participant. "Participation Agreement" means each Participation Agreement identified in Exhibit A hereto as such Participation Agreement may be amended from time to time pursuant to the applicable provisions thereof; "Participation Agreements" means each and every Participation Agreement. "Paying Agent" means any Person acting as Paying Agent hereunder pursuant to Section 9.14. "Person" means any individual, partnership, corporation, trust, unincorporated association or joint venture, a government or any department or agency thereof, or any other entity. "Place of Payment", when used with respect to the Securities of any series, means the office or agency maintained pursuant to Section 5.02 and such other place or places, if any, where the principal of and premium, if any, and interest on the Securities of such series are payable as specified in the Series Supplemental Indenture setting forth the terms of the Securities of such series. "Pledged Lessor Bond" means each Lessor Bond identified in a schedule to a Series Supplemental Indenture, as such Lessor Bond may be amended or supplemented from time to time pursuant to the applicable provisions thereof, of the related Lease Indenture and of this Indenture; "Pledged Lessor Bonds" means each and every Pledged Lessor Bond. "Pledged Property" has the meaning set forth in the Granting Clauses. "Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; for the purposes of this definition, any Security authenticated and delivered under Section 2.09 in lieu of a lost, destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security. "Principal Instruments" means the Pledged Lessor Bonds, the Lease Indentures, the Participation Agreements and the Leases. "Redeemed Securities" shall have the meaning specified in Section 7.02. "Redemption Date", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture and the terms of such Security. "Regular Record Date" for the Stated Maturity of any installment of interest on the Securities of any series or for the Installment Payment Date of any installment of principal of the Securities and any series for which principal is payable from time to time without presentation or surrender means the 15th day (whether or not a Business Day) of the month preceding the month in which such Stated Maturity or Installment Payment Date, as the case may be, occurs, or any other date specified for such purpose in the Series Supplemental Indenture setting forth the terms of the Securities of such series. "Responsible Officer" shall mean when used with respect to the Trustee, any officer within the Corporate Trust Office of the Trustee including any Vice President, Assistant Vice President, Secretary, Assistant Secretary, Managing Director or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject. "Security" or "Securities" shall have the meaning set forth in the recitals hereto. "Security Register" has the meaning specified in Section 2.08. "Security Registrar" means any Person acting as Security Registrar hereunder pursuant to Section 9.14. "LP&L Request" means a written request or order, signed in the name of LP&L by its President or one of its Vice Presidents or Assistant Vice Presidents and by its Treasurer or Secretary or one of its Assistant Treasurers or Assistant Secretaries or any authorized agent of LP&L, and delivered to the Trustee. "Series Supplemental Indenture" means an indenture supplemental to this Indenture, for the purpose of, among other things, specifying, in accordance with Article Two hereof, the form of the Securities of any series and/or for the purpose of, among other things, subjecting to the Lien of this Indenture the Pledged Lessor Bonds related to such series; "Series Supplemental Indentures" means each and every Series Supplemental Indenture. "Sinking Fund" has the meaning specified in Section 7.02. "Sinking Fund Redemption Date" shall have the meaning specified in Section 7.02. "Sinking Fund Requirements" shall have the meaning specified in Section 7.02. "Special Record Date" for the payment of any defaulted interest or any defaulted Installment Payment Amount means a date fixed by the Trustee pursuant to Section 2.10. "Stated Maturity", when used with respect to the principal of any Security or any installment of interest thereon, means the date specified in such Security as the fixed date on which such principal or such installment of interest is due and payable; provided, however, that, with respect to any Security the principal of which is payable in installments without presentment or surrender, Stated Maturity shall mean the date specified in such Security as the fixed date on which the final payment of principal of such Security is due and payable. "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed, except as provided in Section 11.06. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean such successor Trustee. Section 1.02. Compliance Certificates and Opinions. Upon any application or request by the Company, any Lessor or LP&L to the Trustee to take any action under any provision of this Indenture, the Company, such Lessor or LP&L, as the case may be, shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than certificates provided pursuant to Section 10.02 herein) shall include: (a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions therein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. Section 1.03. Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company, of any Lessor or of LP&L may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company, of any Lessor or of LP&L, as the case may be, stating that the information with respect to such factual matters is in the possession of the Company, such Lessor or LP&L, as the case may be, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous. Any Opinion of Counsel stated to be based on the opinion of other counsel shall be accompanied by a copy of such other opinion. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Section 1.04. Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing or, alternatively, may be embodied in and evidenced by the record of Holders voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders duly called and held in accordance with the provisions of Article Thirteen, or a combination of such instruments and any such record. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record, or both, are delivered to the Trustee and, where it is hereby expressly required, to the Company and to LP&L. Such instrument or instruments and any such record (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments and so voting at any such meeting. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 9.01) conclusive in favor of the Trustee, the Company and LP&L, if made in the manner provided in this Section. The record of any meeting of Holders of Securities shall be proved in the manner provided in Section 13.06. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the certificate of any notary public or other officer of any jurisdiction authorized to take acknowledgments of deeds or administer oaths that the Person executing such instrument acknowledged to him the execution thereof, or by an affidavit of a witness to such execution sworn to before any such notary or other such officer. If such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient. (c) The principal amount and serial numbers of Securities held by any Person, and the date or dates of holding the same, shall be proved by the Security Register and the Trustee shall not be affected by notice to the contrary. (d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall bind the Holder of every Security issued upon the transfer thereof or in exchange therefor or in lieu thereof, whether or not notation of such action is made upon such Security. (e) Until such time as written instruments shall have been delivered with respect to the requisite percentage of principal amount of Securities for the action contemplated by such instruments, any such instrument executed and delivered by or on behalf of the Holder of any Security may be revoked with respect to any or all of such Securities by written notice by such Holder or any subsequent Holder, proven in the manner in which such instrument was proven. (f) Securities of any series authenticated and delivered after any Act of Holders may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any action taken by such Act of Holders. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to such action may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series. Section 1.05. Notices, etc., to Trustee, Company and LP&L. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (a) the Trustee by any Holder, by the Company, by LP&L or by an Authorized Agent shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, or (b) the Company by the Trustee, by any Holder, by LP&L or by an Authorized Agent shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee and LP&L by the Company for such purpose, or (c) LP&L by the Trustee, by any Holder, by the Company or by an Authorized Agent shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage prepaid, to LP&L addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee and the Company by LP&L for such purpose. Section 1.06. Notices to Holders; Waiver. Except as otherwise expressly provided herein, where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at such Holder's address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice to Holders, then such notification as shall be made by overnight courier at the expense of the Company shall constitute a sufficient notification for every purpose hereunder. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders, and any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given. Section 1.07. Conflict with Trust Indenture Act. If any provision of this Indenture limits, qualifies or conflicts with another provision hereof which is required to be included in this Indenture by, or is otherwise governed by, any provision of the Trust Indenture Act, such required or governed provision shall control; and if any provision hereof otherwise conflicts with the Trust Indenture Act, the Trust Indenture Act shall control. Section 1.08. Effect of Heading and Table of Contents. The Article and Section headings in this Indenture and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 1.09. Successors and Assigns. All covenants, agreements, representations and warranties in this Indenture by the Company, LP&L and the Trustee, shall bind and, to the extent permitted hereby, shall inure to the benefit of and be enforceable by their respective successors and assigns, whether so expressed or not. Section 1.10. Separability Clause. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 1.11. Benefits of Indenture. Nothing in this Indenture or in the Securities, expressed or implied, shall give to any Person, other than the parties hereto and their successors hereunder, or the Holders of Securities as expressly provided herein, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 1.12. Governing Law. This Indenture and each Security are being and will be executed and delivered in the State of New York, shall be deemed to be contracts made in such State and for all purposes shall be construed in accordance with and governed by the laws of the State of New York, except to the extent that laws of other jurisdictions are mandatorily applicable. Section 1.13. Legal Holidays. In any case where any Redemption Date, Installment Payment Date or the Stated Maturity of principal of or any installment of interest on any Security, or any date on which any defaulted interest or principal is proposed to be paid, shall not be a Business Day, then (notwithstanding any other provision of this Indenture or such Security) payment of interest and/or principal and premium, if any, shall be due and payable on the next succeeding Business Day with the same force and effect as if made on or at such nominal Redemption Date, Stated Maturity, Installment Payment Date or date on which the defaulted interest or principal is proposed to be paid, and no interest shall accrue on the amount so payable for the period from and after such Redemption Date, Stated Maturity, Installment Payment Date or date for the payment of defaulted interest or principal, as the case may be. ARTICLE TWO The Securities Section 2.01. Form of Security to Be Established by Series Supplemental Indenture. The Securities of each series shall be substantially in the form (not inconsistent with this Indenture, including Section 2.05 hereof) established in the Series Supplemental Indenture relating to the Securities of such series. Section 2.02. Form of Trustee's Authentication. The Trustee's certificate of authentication on all Securities shall be in substantially the following form: This is one of the Securities of the series designated therein referred to in the within mentioned Indenture. ________________________________________________ as Trustee By______________________________________________ Authorized Officer Dated Section 2.03. Amount Unlimited; Issuable in Series; Limitations on Issuance. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in one or more Series Supplemental Indentures, prior to the issuance of Securities of any series: (1) the title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities) and the form or forms of Securities of such series; (2) any limit upon the aggregate principal amount of the Securities of such series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, other Securities of such series pursuant to Section 2.07, 2.08, 2.09, 6.06 or 11.07 and except for Securities which pursuant to Section 2.04 hereof, are deemed never to have been authenticated and delivered hereunder); (3) the date on which the principal of the Securities of such series is payable and the date or dates on or as of which the Securities of such series shall be dated, if other than as provided in Section 2.13; (4) the rate at which the Securities of such series shall bear interest, or the method by which such rate shall be determined, the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be payable and the Regular Record Date for the determination of Holders to whom interest is payable; and the basis of computation of interest, if other than as provided in Section 2.13; (5) if other than as provided in Section 5.02, the place or places where (1) the principal of and premium, if any, and interest on Securities of such series shall be payable, (2) Securities of such series may be surrendered for registration of transfer or exchange and (3) notices and demands to or upon the Company in respect of the Securities of such series and this Indenture may be served; and, if such is the case, the circumstances under which the principal of such Securities shall be payable without presentment or surrender; (6) the price or prices at which, the period or periods within which, and the terms and conditions upon which Securities of such series may be redeemed, in whole or in part, at the option of the Company; (7) the obligation, if any, of the Company to redeem, purchase or repay Securities of such series pursuant to any sinking fund, installment payment or analogous provisions or at the option of a Holder thereof and the price or prices at which and the period or periods within which, and the terms and conditions upon which, Securities of the series shall be redeemed, purchased or repaid in whole or in part, pursuant to such obligation; (8) if other than denominations of $1,000 and any multiple thereof, the denominations in which Securities of such series shall be issuable; (9) any other terms of Securities of such series (which terms shall not be inconsistent with the provisions of this Indenture); and (10) any trustees, authenticating or paying agents, warrant agents, transfer agents or registrars with respect to the Securities of such series. Concurrently with the initial authentication and delivery of the Securities of each series, the Company shall cause to be delivered to the Trustee Lessor Bonds (a) issued as separate series under one or more Lease Indentures, (b) payable as to principal on such dates and in such amounts that on the Stated Maturity of principal and each Sinking Fund Redemption Date or Installment Payment Date of such Securities there shall be payable on the Lessor Bonds an amount in respect of principal equal to the principal amount of such Securities then to mature or to be payable in installments of principal or be redeemed, (c) bearing interest at the same rate and payable at the same times, as the corresponding Securities of such series, (d) containing provisions for redemption, including redemption premiums, correlative to the provisions for redemption (other than pursuant to a Sinking Fund) of the Securities of such series and (e) registered in the name of the Trustee. Section 2.04. Authentication and Delivery of Securities. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee shall thereupon authenticate and deliver such Securities in accor dance with such Company Order, without any further action (other than as set forth in Section 2.04(b)) by the Company. Subject to Section 9.14(b) hereof, no Security shall be secured by or entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication, in the form provided for herein, executed manually by the Trustee and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee (and, if applicable, the Authenticating Agent) shall be entitled to receive, and (subject to Section 9.01) shall be fully protected in relying upon: (a) an executed Series Supplemental Indenture; (b) an Officers' Certificate of the Company (i) certifying as to resolutions of the Board of Directors of the Company authorizing the execution and delivery by the Company of such Series Supplemental Indenture and the issuance of such Securities, (ii) certifying that all conditions precedent under this Indenture to the Trustee's (or, if applicable, the Authenticating Agent's) authentication and delivery of such Securities have been complied with and (iii) certifying that the terms of the documents referred to in clauses (c) and (d) below are not inconsistent with the terms of this Indenture as then and theretofore supplemented; (c) fully executed counterparts (but not the originals thereof) of (i) the Lease Indentures under which were issued the Pledged Lessor Bonds relating to the Securities of such series and (ii) the Leases relating to such Pledged Lessor Bonds; delivered (i) to the Company in connection with its purchase of the Pledged Lessor Bonds relating to the Securities of such series, (ii) to the Owner Trustee and/or the Lease Indenture Trustee in connection with the issuance of such Pledged Lessor Bonds, and (iii) to the extent not covered by such opinions, opinions of Counsel to the Company or LP&L (x) to the effect that (1) the form or forms and the terms of such Securities have been established by a Series Supplemental Indenture as permitted by Sections 2.01 and 2.03 in conformity with the provisions of this Indenture, (2) such Securities, when authenticated and delivered by the Trustee (or, if applicable, the Authenticating Agent) and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company, except to the extent that the enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally and (3) all requirements of the laws of the States of New York and Louisiana and of the General Corporation Law of the State of Delaware and of this Indenture, in respect of the execution and delivery by the Company of the Securities, have been complied with and (y) concerning such other matters as the Trustee may reasonably request; (f) duly executed Extension Letters relating to the Pledged Lessor Bonds; and (g) in circumstances where the Pledged Lessor Bonds relating to such series of Securities are executed and delivered for the purposes described in Section 8(f) of the Facility Lease, (i) a certificate of an independent public Trustee (who shall not be an employee of the Company, or LP&L or any Affiliate of either thereof) to the effect that the principal amount of Securities to be authenticated does not exceed the Undivided Interest Percentage (as defined in such Lease Indenture) of total cost (including allowance for funds used during construction, or any analogous amount, to the extent permitted by generally accepted accounting principles) of any related Capital Improvement (as defined in such Lease Indenture) financed with the proceeds of such Pledged Lessor Bonds and (ii) a certificate of an engineer, appraiser or other expert (who may be an officer or employee of LP&L and who shall not be required to be independent, except as would be required by Section 314(d)(3) of the Trust Indenture Act) to the effect that the Undivided Interest Percentage of the fair value of any such Capital Improvement as of its respective date of incorporation or installation was not less than the Undivided Interest Percentage of the total cost (including allowance for funds used during construction, or any analogous amount, to the extent permitted by generally accepted accounting principles) of such Capital Improvement as of the date financed with the proceeds of such Pledged Lessor Bonds. Receipt by the Trustee of the Officers' Certificate referred to in clause (b) above shall be conclusively presumed for all purposes of this Indenture to establish that the documents referred to in such Officers' Certificate comply with the requirements of this Indenture. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 2.12 together with a written statement (which need not comply with Section 1.02 and need not be accompanied by an Opinion of Counsel) stating that such Security has never been issued and sold by the Company, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits hereof. Section 2.05. Form and Denominations. The Securities of each series shall be in registered form and may have such letters, numbers or other marks of identification and such legends or endorsements thereon as may be required to comply with the rules of any securities exchange or to conform to any usage in respect thereof, or as may, consistently herewith, be prescribed by the Board of Directors of the Company or by the officers executing such Securities, as evidenced by their execution thereof. The definitive Securities shall be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution thereof. All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided herein or in the Series Supplemental Indenture setting forth the terms of the Securities of such series. In the absence of any provision contained in any Series Supplemental Indenture, the Securities are issuable only in denominations of $1,000 and/or any integral multiple thereof. Section 2.06. Execution of Securities. The Securities shall be executed on behalf of the Company by its President or one of its Vice Presidents, under its corporate seal affixed thereto or reproduced thereon and attested by its Secretary or one of its Assistant Secretaries. The signature of any or all such officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were at any time relevant to the authorization thereof the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. Section 2.07. Temporary Securities. Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order, the Trustee shall authenticate and deliver, temporary Securities of such series which are printed, lithographed, typewritten, photocopied or otherwise produced in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued (with or without the recital of specific redemption or sinking fund provisions) and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution thereof. If temporary Securities of any series are issued, the Company will cause definitive Securities of such series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company maintained for such purpose at the Place of Payment for such series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series the Company shall execute, and the Trustee shall authenticate and deliver in exchange therefor, definitive Securities of such series of authorized denominations and of like tenor and aggregate principal amount. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and of like tenor. Section 2.08. Registration, Transfer and Exchange. The Company shall cause to be kept at the office of the Security Registrar a register in which, subject to such reasonable regulations as the Company may prescribe, the Company shall provide for the registration of Securities and of registration of transfers and exchanges of Securities and, with respect to Securities of any series the principal of which is payable without presentation or surrender, the amount of the unpaid principal amount of such Securities. This register and, if there shall be more than one Security Registrar, the combined registers maintained by all such Security Registrars, are herein sometimes referred to as the "Security Register". Upon surrender for registration of transfer of any Security of any series at any office or agency maintained for such purpose pursuant to Section 5.02, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of authorized denominations and of like tenor and aggregate principal amount. At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at any office or agency maintained for such purpose pursuant to Section 5.02. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same security and benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or exchange shall (if so required by the Company or the Security Registrar or any transfer agent) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and Security Registrar or any transfer agent, duly executed, by the Holder thereof or his attorney duly authorized in writing. Except as may be otherwise provided in the Series Supplemental Indenture relating to the Securities of any series, no service charge shall be made for any transfer or exchange of Securities, but the Security Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Securities other than exchanges pursuant to Sections 2.07, 6.06 or 11.07 not involving any transfer. Neither the Company, the Trustee nor the Security Registrar shall be required (i) to execute and deliver, issue, register the transfer of or exchange any Security of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of such series selected for redemption under Section 6.02 or 7.02 and ending at the close of business on the day of such mailing or (ii) to issue, register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security selected for redemption in part. Section 2.09. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series, and of like tenor and principal amount and bearing a number not contemporaneously outstanding. If there shall be delivered to the Trustee, the Company and LP&L (a) evidence to their satisfaction of the ownership of and the destruction, loss or theft of any Security and (b) such security or indemnity as may be required by them to save any of them and any agent of any of them harmless, then, in the absence of notice to the Trustee, the Company or LP&L that such Security has been acquired by a bona fide purchaser, the Company shall execute, and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series, and of like tenor and principal amount and bearing a number not contemporaneously outstanding. Notwithstanding the foregoing, in case any such mutilated, destroyed, lost or stolen security is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith. Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the security and benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. Section 2.10. Payment of Interest; Interest Rights Preserved. Interest on any Security which is payable, and is punctually paid or duly provided for, at any Stated Maturity of an installment of interest shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. At the option of the Company, payment of interest on any Security may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or in such other manner as shall be established in a Series Supplemental Indenture creating the series of which such Security is a part. Any Installment Payment Amount or any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, at any Installment Payment Date or any Stated Maturity of an installment of interest, as the case may be, shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder to the extent that the Company has elected to pay such defaulted interest or principal as provided in clause (a) or (b) below: (a) The Company may elect, which election shall be at the direction of any Owner Trustee whose Pledged Lessor Bond is in default in respect of the payment of interest or principal and which is proposing to make payment of all or part of such defaulted interest or principal, to make payment of any defaulted interest or principal to the Persons in whose names the Securities of such series in respect of which interest is in default (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such defaulted interest or principal, which shall be fixed in the following manner. Such Owner Trustee shall notify the Trustee and, if other than the Trustee, the Paying Agent, in writing of the amount of defaulted interest or principal proposed to be paid on each such Security and the date of the proposed payment, and at the same time there shall be deposited with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or principal, as the case may be, or there shall be made arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such defaulted interest or principal as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such defaulted interest or principal which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company, LP&L and the Security Registrar of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such defaulted interest or principal and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of such series at the address of such Holder as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such defaulted interest or principal and the Special Record Date therefor having been mailed as aforesaid, such defaulted interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b). (b) The Company may make, or cause to be made, payment of any defaulted Installment Payment Amount or any defaulted interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities in respect of which such principal or interest is in default may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this paragraph, such payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security, and each such Security shall bear interest from whatever date shall be necessary so that neither gain nor loss in interest shall result from such registration of transfer, exchange or replacement. Section 2.11. Persons Deemed Owners. The Person in whose name any Security is registered shall be deemed to be the owner of such Security for the purpose of receiving payment of principal of and premium, if any, and (subject to Section 2.10) interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, regardless of any notice to anyone to the contrary. Section 2.12. Cancellation. All Securities surrendered for payment, redemption, credit against any Sinking Fund payment or registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee for cancellation. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, or which the Company shall not have issued, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture. All Securities canceled by the Trustee shall be disposed of in accordance with the customary practice of the Trustee, and the Trustee shall promptly deliver a certificate of disposition to the Company, unless, by a timely Company Order, the Company shall direct that canceled Securities be disposed of otherwise. The Trustee shall promptly deliver written evidence of any cancellation of a Security in accordance with this Section 2.12 to the Company. Section 2.13. Dating of Securities; Computation of Interest. (a) Except as otherwise provided in the Series Supplemental Indenture creating a series of Securities, each Security of any series shall be dated the date of its authentication. (b) Except as otherwise provided in the Series Supplemental Indenture creating a series of Securities, interest on the Securities of each series shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Section 2.14. Source of Payments; Rights and Liabilities of Lessors, Owner Participants and Lease Indenture Trustees. Except as otherwise specifically provided in this Indenture, all payments of principal and premium, if any, and interest to be made in respect of the Securities or under this Indenture shall be made only from Pledged Property or the income and proceeds received by the Trustee therefrom. Each Holder, by its acceptance of a Security shall be deemed to have agreed that (a) it will look solely to the Pledged Property or the income and proceeds received by the Trustee therefrom to the extent available for distribution to such Holder as herein provided and (b) none of any Owner Participant, any Owner Trustee, any Lease Indenture Trustee or the Trustee is liable to any Holder or, in the case of any Owner Participant, Owner Trustee or Lease Indenture Trustee, to the Trustee for any amounts payable under any Security or, except as provided herein with respect to the Trustee, for any liability under this Indenture. No Owner Participant, Owner Trustee or Lease Indenture Trustee shall have any duty or responsibility under this Indenture or the Securities to any Holder or to the Trustee. Section 2.15. Application of Proceeds from the Sale of Securities. The Company shall pay, or cause to be paid, the proceeds of the issuance and sale of the Securities of each series to each Lease Indenture Trustee under a Lease Indenture under which Pledged Lessor Bonds shall have been issued and delivered to the Trustee in connection with the issuance of such Securities, for the account of the related Owner Trustee which issued such Pledged Lessor Bonds, each such Lease Indenture Trustee to receive an amount equal to the aggregate principal amount of such Pledged Lessor Bonds. Section 2.16. Principal Amount of Securities Payable Without Presentment or Surrender All references in this Indenture to the principal amount of any Security shall, when used with respect to Securities of any series the principal of which is payable without presentation or surrender, mean the unpaid principal amount thereof, except that, for purposes of Sections 2.07, 2.08,2.09 and 6.06 of this Indenture, principal amount shall, when used with respect to any such Security, refer to the original principal amount thereof prior to the payment of any Installment Payment Amounts. Notwithstanding anything herein or in any Security to the contrary, with respect to each Security of any series the principal of which is payable without presentation or surrender, the unpaid principal amount thereof recorded on the Security Register shall be controlling as to the remaining unpaid principal amount thereof. ARTICLE THREE Provisions as to Pledged Property Section 3.01. Holding of Pledged Securities. The Trustee is authorized in its discretion to cause to be registered (as to principal) in its name, as Trustee, or in the name of its nominee, any and all coupon bonds which it may receive as part of the Pledged Property, or it may cause the same to be exchanged for registered bonds without coupons of any denomination. The Trustee is authorized in its discretion to cause to be registered in its name, as Trustee, or in the name of its nominee, any and all registered bonds which it may receive as part of the Pledged Property, or may cause such registered bonds to be exchanged for coupon bonds. The Company will deliver promptly to the Trustee such documents, certificates and opinions as the Trustee may reasonably request in connection with subjection of any securities to the lien of this Indenture to the extent contemplated hereby. Section 3.02. Disposition of Payments on Pledged Property Unless and until all Outstanding Securities have been paid in full or provision for the payment of such Securities has been made in accordance with this Indenture, the Trustee shall be entitled to receive all principal, premium, if any, and interest paid in respect of any Pledged Lessor Bonds and interest paid on bonds or other obligations or indebtedness which may be subject to the lien of this Indenture and shall apply the same to the payment of the principal of and premium, if any, and interest on the Securities when and as they become due and payable pursuant to, and in accordance with, this Indenture. The Trustee shall duly note on the schedules attached to the Pledged Lessor Bonds or by other appropriate means all payments of principal, premium, if any, and interest made on the Pledged Lessor Bonds. Section 3.03. Exercise of Rights and Powers Under Pledged Lessor Bonds and Lease Indentures. The Trustee shall not take any action as the holder of the Pledged Lessor Bonds to direct any Lease Indenture Trustee in any respect or to vote any Pledged Lessor Bond or any portion thereof except as specified in this Section. The Trustee shall give notice to the Holders of the occurrence of any event of default or default under any Lease Indenture, and of every Event of Loss or Deemed Loss Event or Financial Event occurring under a Lease (as such terms are therein defined), but only to the extent the same shall actually be known by a Responsible Officer. The Trustee may, at any time, and shall, upon the written request of any Lease Indenture Trustee made to the Trustee to give any direction or to vote its interest in the Pledged Lessor Bonds, request from Holders directions as to (a) whether or not to direct such Lease Indenture Trustee to take or refrain from taking any action which holders of Pledged Lessor Bonds have the option to direct and (b) how to vote any Pledged Lessor Bond if a vote has been called for with respect thereon. In addition, any Holder may at any time request the Trustee to direct, or to participate in the direction of, any action under any Lease Indenture to the extent that the Trustee may do so under such Lease Indenture. Upon receiving from Holders any written directions as to the taking or the refraining from taking, of any action, or the voting of any Pledged Lessor Bond, the Trustee shall specify to the related Lease Indenture Trustee the principal amount of the Pledged Lessor Bond which is in favor of the action or vote, the principal amount of the Pledged Lessor Bond which is opposed to the action or vote, and the principal amount of the Pledged Lessor Bond which is not taking any position for the action or vote. Such principal amounts shall be determined by allocating to the total principal amount of the Pledged Lessor Bonds with respect to which direction is to be given the proportionate principal amount of Securities taking corresponding positions or not taking any position, based on the aggregate principal amount of Outstanding Securities. Section 3.04. Certain Actions in Case of Judicial Proceedings. In case all or any part of the property of any Lessor or any other Person which may be deemed an obligor in respect of the Pledged Lessor Bonds shall be sold at any judicial or other involuntary sale, the Trustee shall receive any portion of the proceeds of such sale payable in respect of the Pledged Property, and such proceeds shall be held as provided in Section 3.05. Section 3.05. Cash Held by Trustee Treated as a Deposit. Any and all cash held by the Trustee under any provision of this Indenture shall be treated by the Trustee, until required to be paid out hereunder, as a deposit, in trust, without any liability for interest. ARTICLE FOUR Withdrawal of Collateral Section 4.01. Withdrawal of Collateral. Except as provided in Section 4.02, none of the Pledged Property shall be subject to withdrawal unless and until all Outstanding Securities have been paid in full or provision for such payment has been made in accordance with the terms of this Indenture and the Trustee shall have received the documents and opinions required by Section 4.02 or Article Twelve. Section 4.02. Reassignment of Pledged Lessor Bonds upon Payment. Upon receipt of payment in full of the principal of and premium, if any, and interest on any Pledged Lessor Bond held by the Trustee, the Trustee shall deliver to the Company said Pledged Lessor Bond and any instrument of transfer or assignment necessary to reassign to the Company said Pledged Lessor Bond and the interest of the Company, if any, in the Lease Indenture relating thereto; provided, however, that nothing herein contained shall prevent the Trustee from presenting any Pledged Lessor Bond to the related Lease Indenture Trustee for final payment in accordance with the applicable provisions of the related Lease Indenture. ARTICLE FIVE Covenants Section 5.01. Payment of Principal, Premium, if any, and Interest. The Company shall duly and punctually pay, or cause to be paid, the principal of and premium, if any, and interest on the Securities in accordance with the terms of the Securities and this Indenture, subject, however, to Section 2.14 hereof. Section 5.02. Maintenance of Office or Agency. The Company will maintain in the Borough of Manhattan, The City of New York, and in such other Places of Payment as shall be specified for the Securities of any series, an office or agency where Securities may be presented or surrendered for payment of principal, premium, if any, and interest, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of Securities and this Indenture may be served. The Corporate Trust Office is hereby initially designated as one such office or agency. The Company will give prompt written notice to the Trustee of the location, and of any change in the location, of each such office or agency and prompt notice to the Holders in the manner specified in Section 1.06. If at any time the Company shall fail to maintain any such office or agency, or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served by the Corporate Trust Office, and the Company hereby appoints the Trustee its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency for such purposes in each Place of Payment for such Securities in accordance with the requirements set forth above. The Company shall give prompt written notice to the Trustee, and prompt notice to the Holders in the manner specified in Section 1.06, of any such designation or rescission and of any change in the location of any such other office or agency. Section 5.03. Money for Security Payments to be Held in Trust. All moneys deposited with the Trustee or with any Paying Agent for the purpose of paying the principal of or premium (if any) or interest on Securities shall be deposited and held in trust for the benefit of the Holders of the Securities entitled to such principal, premium (if any) or interest, subject to the provisions of this Indenture. Moneys so deposited and held in trust shall not be a part of the Pledged Property but shall constitute a separate trust fund for the benefit of the Holders of the relevant Securities. The Company may at any time direct any Paying Agent to pay to the Trustee all sums held in trust by such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by such Paying Agent, and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent in trust for the payment of the principal of or premium, if any, or interest on any Security and remaining unclaimed for two years (or such lesser period as may be required by law to give effect to this provision) after such principal, premium or interest has become due and payable shall be paid to the Company on Company Request (to the extent such monies shall have been deposited by the Company) or to any other Person on its written request (to the extent such monies shall have been deposited by such other Person), and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company or such other Person, as the case may be, for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, shall, at the expense of the Company or, to the extent such monies are to be paid to another Person, such other Person, cause to be published once, in an Authorized Newspaper in The City of New York and each other city, if any, in which a Place of Payment is located, notice that such money remains unclaimed and that, after a date specified herein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company or such other Person. As used herein, "Authorized Newspaper" means a newspaper, in an official language of the country of publication or in the English language, customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays, and of general circulation in The City of New York and each other city, if any, in which a Place of Payment is located. In case by reason of the suspension of publication of any Authorized Newspapers or by reason of any other cause it shall be impracticable to publish any notice as herein provided, then such notification as shall be given with the approval of the Trustee shall constitute sufficient notice. Section 5.04. Maintenance of Corporate Existence. The Company, at its own cost and expense, will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights and franchises, except as otherwise specifically permitted in this Indenture, provided, however, that the Company shall not be required to preserve any right or franchise if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof will not have any material adverse effect on the Holders of the Securities. Section 5.05. Protection of Pledged Property The Company and LP&L will from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments as shall be necessary to (i) make more effective the pledge and assignment hereunder of all or any portion of the Pledged Property, (ii) maintain or preserve the lien of this Indenture or carry out more effectively the purposes hereof, (iii) perfect, publish notice of or protect the validity of any grant made or to be made by this Indenture, (iv) enforce any of the Securities, or (v) preserve and defend title to any Securities or other instrument included in the Pledged Property and the rights of the Trustee, and of the Holders, in such Securities or other instrument against the claims of all persons and parties. Each of the Company and LP&L hereby designates the Trustee its agent and attorney-in-fact to execute any financing statement, continuation statement or other instrument required pursuant to this Section. Section 5.06. Opinions as to Pledged Property Promptly after the execution and delivery of this Indenture and of each Series Supplemental Indenture or other supplemental indenture or other instrument of further assurance, the Company shall furnish to the Trustee such Opinion or Opinions of Counsel as the Trustee may reasonably request stating that, in the opinion of such Counsel, this Indenture and all such Series Supplemental Indentures, other supplemental indentures and other instruments of further assurance have been properly recorded, filed, re-recorded and re-filed to the extent necessary to make effective the lien intended to be created by this Indenture, and reciting the details of such action or referring to prior Opinions of Counsel in which such details are given, and stating that all financing statements and continuation statements have been executed and filed that are then necessary fully to preserve and protect the rights of the Holders and the Trustee, or stating that, in the opinion of such Counsel, no such action is necessary to make such lien effective. On or before May 1, in each calendar year, beginning with the first calendar year commencing more than three months after the date of authentication and delivery of any Securities, the Company shall furnish to the Trustee such Opinion or Opinions of Counsel as are reasonably satisfactory to the Trustee, either stating that, in the opinion of such Counsel, such action has been taken with respect to the recording, filing, re-recording and re-filing of this Indenture, any Series Supplemental Indenture and any other requisite documents and with respect to the execution and filing of any financing statements and continuation statements as is then necessary to maintain the lien and security interest created by this Indenture with respect to the Pledged Property and reciting the details of such action or stating that, in the opinion of such Counsel, no such action is then necessary to maintain such lien and security interest. Such Opinion or Opinions of Counsel shall also describe the recording, filing, re-recording and re-filing of this Indenture, any Series Supplemental Indenture and any other requisite documents and the execution and filing of and financing statements and continuation statements that will, in the opinion of such Counsel, be required to maintain the lien of this Indenture with respect to the Pledged Property until in the following calendar year. Section 5.07. Performance of Obligations. Neither the Company nor LP&L will take or omit to take any action the taking or omission of which would release any Person from any of such Person's covenants or obligations under instruments included in the Pledged Property, or which would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effective ness of, any such instrument, except as expressly provided in this Indenture or such instrument. Section 5.08. Negative Covenants. During such time as any Security issued hereunder is Outstanding, the Company will not: (a) sell, transfer, exchange or otherwise dispose of any portion of the Pledged Property except as expressly permitted by this Indenture; (b) (i) engage in any business or activity (A) other than in connection with, or relating to, the issuance of Securities pursuant to this Indenture and application of the proceeds thereof as herein provided or (B) which would cause the Company to be an "investment company" within the meaning of the Investment Company Act of 1940, as amended or (ii) amend Article Third, Fourth or Sixth of its Certificate of Incorporation as in effect on the date of execution and delivery of this Indenture; notwithstanding the foregoing, however, the Company may, with respect to the Securities of one or more series enter into credit or liquidity support facilities (including, but without limitation, bank letters of credit, bank lines of credit, surety bonds and bonds of insurance); (c) issue bonds, notes or other evidences of indebtedness other than (A) Securities issued hereunder or (B) evidences of indebtedness permitted by clause (b) above; (d) assume or guarantee any indebtedness of any Person; (e) dissolve or liquidate in whole or in part; (f) take any action which would (i) permit the validity or effectiveness of this Indenture or the pledge and assignment of any of the Pledged Property to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenant or obligation under this Indenture, (ii) permit any lien, charge, security, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Pledged Property or any part thereof or any interest therein or the proceeds thereof or (iii) permit the lien of this Indenture not to constitute a valid first priority security interest in the Pledged Property; or (g) institute any proceedings to be adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Code or any other applicable federal or state law or law of the District of Columbia, or consent to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or any substantial part of its property, or make an assignment for the benefit of its creditors, or admit in writing its inability to pay its debts generally as they become due, or take any corporate action in furtherance of the foregoing. Section 5.09. Annual Statement as to Compliance. (a) Each of LP&L and the Company shall deliver to the Trustee, not less often than annually, a brief certificate from its principal executive officer, principal financial officer or principal accounting officer as to his or her knowledge of its compliance with all conditions and covenants under this Indenture. For purposes of this paragraph (a), such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture. (b) Each of LP&L and the Company shall deliver to the Trustee, promptly after having obtained knowledge thereof, written notice of any Event of Default under Section 8.01 or event which with the giving of notice or lapse of time, or both, would become an Event of Default. Section 5.10. Delivery of Certificate of Independent Public Accountant. LP&L shall cause to be delivered to the Trustee any certificate of an independent certified public accountant (who shall not be an employee of the Company, LP&L or any Affiliate of either of them) delivered to any Lease Indenture Trustee pursuant to Section 11.01(a) of any Lease Indenture. Section 5.11. Delivery of Certificate of Engineer, Appraiser or Other Expert. In connection with any release from the security and other interest created by any Lease Indenture of a portion of the Lease Indenture Estate (as defined in such Lease Indenture) pursuant to Section 13.01 and 13.02 of such Lease Indenture, at its own expense LP&L shall cause to be delivered to the Trustee a certificate of an engineer, appraiser or other expert as to the fair value of any portion of the Lease Indenture Estate to be released from the lien of such Lease Indenture and such certificate shall state that in the opinion of the Person making the same the proposed release will not impair the security under such Lease Indenture in contravention of the provisions thereof. If the fair value of the portion of the Lease Indenture Estate to be released and all other portions of the Lease Indenture Estate released since the commencement of the then current calendar year, as set forth in the certificate required pursuant to this Section 5.11, is 10% or more of the aggregate principal amount of Securities at the time Outstanding, such certificate shall be made by an independent engineer, appraiser or other expert; provided, however, that a certificate of an independent engineer, appraiser or other expert shall not be required in the case of any release of portions of the Lease Indenture Estate if the fair value thereof as set forth in the certificate or opinion required by this Section 5.11 is less than $25,000 or less than 1% of the aggregate principal amount of Securities at the time Outstanding. ARTICLE SIX Redemption of Securities Section 6.01. Applicability of Article. Securities of any series which are redeemable before their Stated Maturity of principal shall be redeemable in accordance with their terms and (except as otherwise specified in the Series Supplemental Indenture creating such series) in accordance with this Article. Section 6.02. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Securities otherwise than through a Sinking Fund shall be evidenced by a Company Order. The Company shall, at least 45 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), deliver to the Trustee a Company Order specifying such Redemption Date and the series and principal amount of Securities to be redeemed. In the case of any redemption of Securities (a) prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture or (b) pursuant to an election of the Company which is subject to a condition specified in the terms of such Securities, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction or condition. The election by LP&L to terminate a Lease pursuant to Section 13(f) or (g) or Section 14 thereof, or Section 16(d)(5) of the related Participation Agreement, shall constitute an election by the Company to redeem Securities (but shall not relieve the Company of its obligation hereunder to deliver to the Trustee the Company Order herein provided for) subject, however, except in the case of a termination pursuant to Section 14 of such Lease, to the right of LP&L to assume the Lessor Bonds related to such Lease on the Lease termination date, in which event there shall be no redemption of Securities solely as a consequence of such termination. Section 6.03. Selection by Trustee of Securities to be Redeemed (a) If any Lease is to be terminated pursuant to Section 13(f) or (g) or Section 14 thereof, or Section 16(d)(5) of the related Participation Agreement, and all Lessor Bonds issued under the related Lease Indenture are to be prepaid, the Company shall redeem Securities which (i) are of the series corresponding to the series of Pledged Lessor Bonds to be so prepaid and (ii) have amounts of principal payable on Stated Maturities and Sinking Fund Redemption Dates or Installment Payment Dates which correspond to the amounts and dates for the payment of the principal of such Pledged Lessor Bonds plus any accrued interest to the Redemption Date, such redemption of Securities to be made on the date on which such Lessor Bonds are to be so prepaid. (b) If less than all the Securities are to be redeemed otherwise than as contemplated in subsection (a) of this Section 6.03 and otherwise than through a Sinking Fund, the particular Securities to be redeemed shall be selected from the series and Stated Maturities, and in the principal amounts, designated to the Trustee in the Company Order required by Section 6.02. (c) Subject to the provisions of subsections (a) and (b) of this Section 6.03, if less than all the Securities of any series are to be redeemed, the particular Securities to be redeemed shall be selected not more than 45 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by lot in such manner as shall provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of such series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of such series except as otherwise specified in the Series Supplemental Indenture creating such series; provided, however, that if the Company, LP&L or an Affiliate or nominee of either thereof shall be the Holder of Securities of any series to be redeemed through a Sinking Fund, the Trustee, if so directed in a Company Order or LP&L Order, as the case may be, shall first select such Securities for redemption. Any such Company Order or LP&L Order shall state that such redemption is in accordance with Section 9(b)(3)(iv) of each Participation Agreement. If more than one Lease is to be terminated pursuant to Section 13(f) or (g) or Section 14 thereof, or Section 16(d)(5) of the related Participation Agreement, and the Lessor Bonds relating to each such Lease are to be prepaid on the same date, the Trustee shall separately designate the Securities to be redeemed in respect of each such Lease termination. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected to be redeemed in part, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. Section 6.04. Notice of Redemption Notice of redemption (including Sinking Fund redemption) shall be given in the manner provided in Section 1.06 to the Holders of Securities to be redeemed not less than 20 nor more than 60 days prior to the Redemption Date. All notices of redemption shall state: (a) the Redemption Date, (b) the Redemption Price, (c) if less than all the Outstanding Securities of any series are to be redeemed, the identification of the particular Securities to be redeemed, including the series and Stated Maturity of principal, and the portion of the principal amount of any Security to be redeemed in part, (d) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date, (e) the place or places where such Securities are to be surrendered for payment of the Redemption Price, and (f) that the redemption is pursuant to the operation of a Sinking Fund, if such is the case. With respect to any notice of redemption of Securities otherwise than through a Sinking Fund, unless, upon the giving of such notice, such Securities shall be deemed to have been paid in accordance with Section 12.01, such notice shall state that such redemption shall be conditional upon the receipt by the Trustee, on or prior to the date fixed for such redemption, of money sufficient to pay the principal of and premium, if any, and interest on such Securities and that if such money shall not have been so received, such notice shall be of no force or effect and the Company shall not be required to redeem such Securities. In the event that such notice of redemption contains such a condition and such money is not so received, the redemption shall not be made and within a reasonable time thereafter notice shall be given, in the manner in which the notice of redemption was given, that such money was not so received and such redemption was not required to be made. Notice of redemption of Securities to be redeemed at the election of the Company, and any notice of non-satisfaction of a condition for redemption as aforesaid, shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company. Section 6.05. Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, and the conditions, if any, set forth in such notice having been satisfied, the Securities or portions thereof so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless, in the case of an unconditional notice of redemption, the Company shall default in the payment of the Redemption Price and accrued interest) such Securities or portions thereof shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with such notice, such Security or portion thereof shall be paid at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that any installment of interest on any Security the Stated Maturity of which installment is on or prior to the Redemption Date shall be payable to the Holder of such Security, or one or more Predecessor Securities, registered as such at the close of business on the related Regular Record Date according to the terms of such Security and subject to the provisions of Section 2.10. Section 6.06. Securities Redeemed in Part Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (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 attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series, of any authorized denomination requested by such Holder and of like tenor and in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. ARTICLE SEVEN Sinking Funds Section 7.01. Applicability of Article. The provisions of this Article shall be applicable to any sinking fund for the retirement of the Securities of any series except as otherwise specified in the Series Supplemental Indenture creating the Securities of such series. Section 7.02. Sinking Funds for Securities. Any Series Supplemental Indenture may provide for a sinking fund for the retirement of the Securities of the series created thereby (herein called a "Sinking Fund") in accordance with which the Company will be required to redeem on the dates set forth therein (hereinafter called "Sinking Fund Redemption Dates") Securities of principal amounts set forth therein (hereinafter called "Sinking Fund Requirements"). If there shall have been a redemption, otherwise than through a Sinking Fund, of less than all the Securities of a series to which a Sinking Fund is applicable (such redeemed Securities being hereinafter called the "Redeemed Securities"), the Sinking Fund Requirements relating to the Securities of such series for each Sinking Fund Redemption Date thereafter shall be deemed to have been satisfied to the extent of an amount equal to the quotient resulting from the division of (A) the product of (w) the principal amount of the Redeemed Securities and (x) such Sinking Fund Requirement by (B) the sum of (y) the aggregate principal amount of Securities of such series then Outstanding (after giving effect to such redemption) and (z) the principal amount of such Redeemed Securities; provided, however, that the remaining Sinking Fund Requirements determined as set forth in this paragraph shall be rounded to the nearest integral multiple of the minimum authorized denomination for Securities of such series, subject to necessary adjustment so that the aggregate principal amount of such satisfaction of Sinking Fund Requirements shall be equal to the aggregate principal amount of such Redeemed Securities, such adjustment to such Sinking Fund Requirements to be made in the inverse order of the respective Sinking Fund Redemption Dates corresponding thereto and; provided, further, that, notwithstanding the provisions of the foregoing proviso, any such adjustment shall be made in a manner such that, after giving effect thereto, the provisions of clause (b) of the last paragraph of Section 2.03 hereof shall continue to be complied with. Particular Securities to be redeemed through a Sinking Fund shall be selected in the manner provided in Section 6.03, and notice of such redemption shall be given in the manner provided in Section 6.04. ARTICLE EIGHT EVENTS OF DEFAULT; REMEDIES Section 8.01. Events of Default. "Events of Default", wherever used herein, means any one of the following events: (a) failure to pay any interest on any Security when it becomes due and payable, and the continuation of such failure for a period of 10 days; or (b) failure to pay principal of or premium, if any, on any Security when it becomes due and payable, whether at its Stated Maturity of principal, on any applicable Redemption Date or Installment Payment Date or at any other time, and the continuation of such failure for a period of 10 days; or (c) failure on the part of either the Company or LP&L to perform or observe any covenant or agreement herein to be performed or observed by it, and the continuation of such failure for a period of 30 days after notice thereof shall have been given to the Company or LP&L, as the case may be, by the Trustee, or to the Company or LP&L, as the case may be, and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities, specifying such failure and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; provided, however, that the continuation of such failure for a period of 30 days or more after such notice has been so given (but in no event for a period which is greater than one year after such notice has been given) shall not constitute an Event of Default if (i) such failure can be remedied but cannot be remedied within such 30 days, (ii) the Company or LP&L, as the case may be, is diligent in pursuing a remedy of such failure and (iii) such failure does not impair in any respect the lien and security interest created hereby; or (d) the occurrence of an "Event of Default" under any Lease Indenture; or (e) the entry of a decree or order by a court having jurisdiction in the premises adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under the Federal Bankruptcy Act or any other applicable federal or state law or law of the District of Columbia, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuation of any such decree or order unstayed and in effect for a period of 75 consecutive days; or (f) the institution by the Company of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Code or any other applicable federal or state law or law of the District of Columbia, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action. Section 8.02. Acceleration of Maturity; Rescission and Annulment. Upon the occurrence of an Event of Default, (a) if such Event of Default is one referred to in clause (a), (b), (c), (e) or (f) of Section 8.01, the Trustee may, and upon the direction of the Holders of not less than a majority in principal amount of the Securities Outstanding, shall, and (b) if such Event of Default is the one referred to in clause (d) of Section 8.01 (including without limitation an event of default under any Lease which has resulted in an Event of Default referred to in clause (a) or (b) of Section 8.01) under circumstances in which the related Pledged Lessor Bonds have been declared immediately due and payable, the Trustee, shall declare the principal of all the Securities to be due and payable immediately, by a notice in writing to the Company and LP&L, and upon any such declaration such principal shall become immediately due and payable; provided that no such declaration shall be made (and no action under Section 8.03 or 8.05 shall be taken) in cases in which the Event of Default is one referred to in clause (a) or (b) of Section 8.01 which resulted directly from a failure of LP&L to make any payment of rent under any Lease until such time as the Lessor under such Lease has been given the opportunity to exercise its rights under Section 7.16 of the related Lease Indenture. At any time after such a declaration of acceleration has been made and before any sale of the Pledged Property, or any part thereof, shall have been made pursuant to any power of sale as hereinafter in this Article provided, the Holders of a majority in principal amount of the Securities Outstanding, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if (1) there shall have been paid to or deposited with the Trustee a sum sufficient to pay (A) all overdue installments of interest on all Securities, (B) the principal of and premium, if any, on any Securities which have become due otherwise than by such declaration of acceleration and interest thereon at the respective rates provided in the Securities for late payments of principal or premium, (C) to the extent that payment of such interest is lawful, interest upon overdue installments of interest at the respective rates provided in the Securities for late payments of interest, and (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and (2) all Events of Default, other than the non-payment of the principal of Securities which have become due solely by such acceleration, have been cured or waived as provided in Section 8.08. No such rescission shall affect any subsequent default or impair any right consequent thereon. If a declaration of acceleration shall have been rescinded and annulled as provided in the next preceding paragraph, and if, prior to such rescission and annulment, the maturity of the Pledged Lessor Bonds issued under any Lease Indenture had been accelerated as a result of an "Event of Default" thereunder, the Trustee, as the holder of such Pledged Lessor Bonds, shall direct the Lease Indenture Trustee under such Lease Indenture to rescind and annul such acceleration of such Pledged Lessor Bonds and to terminate any proceedings to enforce remedies under such Lease Indenture and the related Lease. Section 8.03. Trustee's Power of Sale of Pledged Property; Notice Required; Power to Bring Suit. If an Event of Default shall have occurred and be continuing, subject to the provisions of Sections 8.06 and 8.07 and the proviso to the first paragraph of Section 8.02, the Trustee, by such officer or agent as it may appoint, may: (1) sell, to the extent permitted by law, without recourse, for cash or credit or for other property, for immediate or future delivery, and for such price or prices and on such terms as the Trustee in its discretion may determine, the Pledged Property as an entirety, or in any such portions as the Holders of a majority in aggregate principal amount of the Securities then Outstanding shall request by an Act of Holders, or, in the absence of such request, as the Trustee in its discretion shall deem expedient in the interest of the Securityholders, at public or private sale; and/or (2) proceed by one or more suits, actions or proceedings at law or in equity or otherwise or by any other appropriate remedy to enforce payment of the Securities or Pledged Lessor Bonds, or to foreclose this Indenture or to sell the Pledged Property under a judgment or decree of a court or courts of competent jurisdiction, or by the enforcement of any such other appropriate legal or equitable remedy, as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce any of its rights or powers or any of the rights or powers of the Holders. ln the event that the Trustee shall deem it advisable to sell any or all of the Pledged Property in accordance with the provisions of this Section, the Company and LP&L agree that if registration of any such Pledged Property shall be required, in the opinion of counsel for the Trustee, under the Securities Act of 1933, as amended, or other applicable law, and regulations promulgated thereunder, and if LP&L shall not effect, or cause to be effected, such registration promptly, the Trustee may sell any such Pledged Property at a private sale, and no Person shall attempt to maintain that the prices at which such Pledged Property is sold are inadequate by reason of the failure to sell at public sale, or hold the Trustee liable therefor. Section 8.04. Incidents of Sale of Pledged Property. Upon any sale of all or any part of the Pledged Property made either under the power of sale given under this Indenture or under judgment or decree in any judicial proceedings for foreclosure or otherwise for the enforcement of this Indenture, the following shall be applicable: (1) Securities Due and Payable. The principal of and premium, if any, and accrued interest on the Securities, if not previously due, shall immediately become and be due and payable. (2) Trustee Appointed Attorney of Company to Make Conveyances. The Trustee is hereby irrevocably appointed the true and lawful attorney of the Company, in its name and stead, to make all necessary deeds, bills of sale and instruments of assignment, transfer or conveyance of the property thus sold, and for that purpose the Trustee may execute all such documents and instruments and may substitute one or more persons with like power. The Company hereby ratifies and confirms all that its said attorneys, or such substitute or substitutes, shall lawfully do by virtue hereof. (3) Company to Confirm Sales and Conveyances. If so requested by the Trustee or by any purchaser, the Company shall ratify and confirm any such sale or transfer by executing and delivering to the Trustee or to such purchaser or purchasers all proper deeds, bills of sale, instruments of assignment, conveyance or transfer and releases as may be designated in any such request. (4) Holders and Trustee May Purchase Pledged Property. Any Holder or the Trustee may bid for and purchase any of the Pledged Property and, upon compliance with the terms of sale, may hold, retain, possess and dispose of such Pledged Property in his or its own absolute right without further accountability. (5) Purchaser at Sale May Apply Securities to Purchase Price. Any purchaser at any such sale may, in paying the purchase price, deliver any of the Securities then Outstanding in lieu of cash and apply to the purchase price the amount which shall, upon distribution of the net proceeds of such sale, after application to the costs of the action and any other sums which the Trustee is authorized to deduct under this Indenture, be payable on such Securities so delivered in respect of principal, premium, if any, and interest. In case the amount so payable on such Securities shall be less than the amount due thereon, duly executed and authenticated Securities shall be delivered in exchange therefor to the Holder thereof for the balance of the amount due on such Securities so delivered by such Holder. (6) Receipt of Trustee Shall Discharge Purchaser. The receipt of the Trustee or of the officer making such sale under judicial proceedings shall be a sufficient discharge to any purchaser for his purchase money, and, after paying such purchase money and receiving such receipt, such purchaser or his personal representative or assigns shall not be obliged to see to the application of such purchase money, or be in any way answerable for any loss, misapplication or non-application thereof. (7) Sale To Divest Rights of Company in Property Sold. Any such sale shall operate to divest the Company of all right, title, interest, claim and demand whatsoever, either at law or in equity or otherwise, in and to the Pledged Property so sold, and shall be a perpetual bar both at law and in equity or otherwise against the Company, and its successors and assigns, and any and all persons claiming or who may claim the Pledged Property sold or any part thereof from, through or under the Company, or its successors and assigns. (8) Application of Moneys Received upon Sale. Any moneys collected by the Trustee upon any sale made either under the power of sale given by this Indenture or under judgment or decree in any judicial proceedings for foreclosure or otherwise for the enforcement of this Indenture, shall be applied as provided in Section 8.12. Section 8.05. Judicial Proceedings Instituted by Trustee. (a) Trustee May Bring Suit. If there shall be a failure to make payment of the principal of any Security at its Stated Maturity or upon Sinking Fund redemption, declaration of accelera tion or otherwise,or if there shall be a failure to pay the premium, if any, or interest on any Security when the same becomes due and payable, then the Trustee, if any such failure shall continue for 15 days, in its own name, and as trustee of an express trust, shall be entitled, and empowered subject to the proviso to the first paragraph of Section 8.02, to institute any suits, actions or proceedings at law, in equity or otherwise, for the collection of the sums so due and unpaid on the Securities, and may prosecute any such claim or proceeding to judgment or final decree, and may enforce any such judgment or final decree and collect the moneys adjudged or decreed to be payable in any manner provided by law, whether before or after or during the pendency of any proceedings for the enforcement of the Lien of this Indenture, or of any of the Trustee's rights or the rights of the Security holders under this Indenture, and such power of the Trustee shall not be affected by any sale hereunder or by the exercise of any other right, power or remedy for the enforcement of the provisions of this Indenture or for the foreclosure of the lien hereof. (b) Trustee May Recover Unpaid Indebtedness after Sale of Pledged Property. In the case of a sale of the Pledged Property and of the application of the proceeds of such sale to the payment of the indebtedness secured by this Indenture, the Trustee in its own name, and as trustee of an express trust, shall be entitled and empowered, by any appropriate means, legal, equitable or otherwise, to enforce payment of, and to receive all amounts then remaining due and unpaid upon, all or any of the Securities, for the benefit of the Holders thereof, and upon any other portion of the indebtedness remaining unpaid, with interest at the rates specified in the respective Securities on the overdue principal of, and premium, if any, and (to the extent that payment of such interest is legally enforceable) on the overdue installments of interest. (c) Recovery of Judgment Does Not Affect Lien of this Indenture or Other Rights. No recovery of any such judgment or final decree by the Trustee and no levy of any execution under any such judgment upon any of the Pledged Property, or upon any other property, shall in any manner or to any extent affect the Lien of this Indenture upon any of the Pledged Property, or any rights, powers or remedies of the Trustee, or any liens, rights, powers or remedies of the Holders, but all such liens, rights, powers and remedies shall continue unimpaired as before. (d) Trustee May File Proofs of Claim; Appointment of Trustee as Attorney-in-Fact in Judicial Proceedings. The Trustee in its own name, or as trustee of an express trust, or as attorney-in-fact for the Holders, or in any one or more of such capacities (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand for the payment of overdue principal, premium, if any, or interest), shall be entitled and empowered to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and of the Holders (whether such claims be based upon the provisions of the Securities or of this Indenture) allowed in any equity, receivership, insolvency, bankruptcy, liquidation, readjustment, reorganization or any other judicial proceedings relative to the Company or any obligor on the Securities (within the meaning of the TIA), the creditors of the Company or any such obligor, the Pledged Property or any other property of the Company or any such obligor, and any receiver, assignee, trustee, liquidator, sequestrator (or other similar official) in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel (it being agreed by the parties hereto that such amounts shall be considered administrative expenses for the purposes of any bankruptcy proceeding). The Trustee is hereby irrevocably appointed (and the successive respective Holders of the Securities, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) the true and lawful attorney-in-fact of the respective Holders, with authority to (i) make and file in the respective names of the Holders (subject to deduction from any such claims of the amounts of any claims filed by any of the Holders themselves), any claim, proof of claim or amendment thereof, debt, proof of debt or amendment thereof, petition or other document in any such proceedings and to receive payment of any amounts distributable on account thereof, (ii) execute any such other papers and documents and to do and perform any and all such acts and things for and on behalf of such Holders, as may be necessary or advisable in order to have the respective claims of the Trustee and of the Holders against the Company or any such obligor, the Pledged Property or any other property of the Company or any such obligor allowed in any such proceeding and (iii) receive payment of or on account of such claims and debt; provided, however, that nothing contained in this Indenture shall be deemed to give to the Trustee any right to accept or consent to any plan of reorganization or otherwise by action of any character in any such proceeding to waive or change in any way any right of any Securityholder. Any moneys collected by the Trustee under this Section shall be applied as provided in Section 8.12. (e) Trustee Need Not Have Possession of Securities. All rights of action and of asserting claims under this Indenture or under any of the Securities enforceable by the Trustee may be enforced by the Trustee without possession of any of such Securities or the production thereof at the trial or other proceedings relative thereto. (f) Suit To Be Brought for Ratable Benefit of Holders. Any suit, action or other proceeding at law, in equity or otherwise which shall be instituted by the Trustee under any of the provisions of this Indenture shall be for the equal, ratable and common benefit of all the Holders, subject to the provisions of this Indenture. (g) Trustee May Be Restored to Former Position and Rights in Certain Circumstances. In case the Trustee shall have proceeded to enforce any right under this Indenture by suit, foreclosure or otherwise and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then in every such case, the Company, LP&L and the Trustee shall be restored without further act to their respective former positions and rights hereunder, and all rights, remedies and powers of the Trustee shall continue as though no such proceedings had been taken. Section 8.06. Holders May Demand Enforcement of Rights by Trustee. If an Event of Default shall have occurred and shall be continuing, the Trustee shall, upon the written request of the Holders of a majority in aggregate principal amount of the Securities then Outstanding and upon the offering of security or indemnity as provided in Section 9.03(e), but subject in all cases to the provisions of Section 3.03 and the proviso to the first paragraph of Section 8.02, proceed to institute one or more suits, actions or proceedings at law, in equity or otherwise, or take any other appropriate remedy, to enforce payment of the principal of or premium (if any) or interest on the Securities or Pledged Lessor Bonds or to foreclose this Indenture or to sell the Pledged Property under a judgment or decree of a court or courts of competent jurisdiction or under the power of sale herein granted, or take such other appropriate legal, equitable or other remedy, as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce any of the rights or powers of the Trustee or the Securityholders, or, in case such Securityholders shall have requested a specific method of enforce ment permitted hereunder, in the manner requested, provided that such action shall not be otherwise than in accordance with law and the provisions of this Indenture, and the Trustee, subject to such indemnity provisions, shall have the right to decline to follow any such request if the Trustee in good faith shall determine that the suit, proceeding or exercise of the remedy so requested would involve the Trustee in personal liability or expense. Section 8.07. Control by Holders. The Holders of not less than a majority in principal amount of the Outstanding Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee, provided that (1) such direction shall not be in conflict with any rule of law or with this Indenture, and (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. Section 8.08. Waiver of Past Defaults. The Holders of not less than a majority in principal amount of the Outstanding Securities may on behalf of the Holders of all the Securities waive any past default hereunder and its consequences, except that only the Holders of all Securities affected thereby may waive a default (1) in the payment of the principal of or premium, if any, or interest on such Securities or (2) in respect of a covenant or provision hereof which under Article Eleven cannot be modified or amended without the consent of the Holder of each Outstanding Security affected. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Section 8.09. Proceedings Instituted by Holder. A Holder shall not have the right to institute any suit, action or proceeding at law or in equity or otherwise for the foreclosure of this Indenture, for the appointment of a receiver or for the enforcement of any other remedy under or upon this Indenture, unless: (1) such Holder previously shall have given written notice to the Trustee of a continuing Event of Default; (2) the Holders of at least 25% in aggregate principal amount of the Securities then Outstanding shall have requested the Trustee in writing to institute such action, suit or proceeding and shall have offered to the Trustee indemnity as provided in Section 9.03(e); (3) the Trustee shall have refused or neglected to institute any such action, suit or proceeding for 60 days after receipt of such notice, request and offer of indemnity; and (4) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of Outstanding Securities. It is understood and intended that no one or more of the Holders shall have any right in any manner whatever hereunder or under the Securities to (i) surrender, impair, waive, affect, disturb or prejudice the Lien of this Indenture on any property subject thereto or the rights of the Holders of any other Securities, (ii) obtain or seek to obtain priority or preference over any other such Holder or (iii) enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all the Holders subject to the provisions of this Indenture. Section 8.10. Undertaking To Pay Court Costs. All parties to this Indenture, and each Holder by his acceptance of a Security, shall be deemed to have agreed that any court may in its discretion require, in any suit, action or proceeding for the enforcement of any right or remedy under this Indenture, or in any suit, action or proceeding against the Trustee for any action taken or omitted by it as Trustee hereunder, the filing by any party litigant in such suit, action or proceeding of an undertaking to pay the costs of such suit, action or proceeding, and that such court may, in its discretion, assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, action or proceeding, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided, however, that the provisions of this Section shall not apply to (a) any suit, action or proceeding instituted by the Trustee, (b) any suit, action or proceeding instituted by any Holder or group of Holders holding in the aggregate more than 10% in aggregate principal amount of the Securities then Outstanding or (c) any suit, action or proceeding instituted by any Holder for the enforcement of the payment of the principal of or premium, if any, or interest on any of the Securities, on or after the respective due dates expressed therein. Section 8.11. Right of Holders To Receive Payment Not To Be Impaired. Anything in this Indenture to the contrary notwithstanding, the right of any Holder of any Security to receive payment of the principal of and premium, if any, and interest on such Security, on or after the respective due dates expressed in such Security (or, in case of redemption, on the Redemption Date fixed for such Security), or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. Section 8.12. Application of Moneys Collected by Trustee. Any moneys collected or to be applied by the Trustee pursuant to this Article, together with any other moneys which may then be held by the Trustee under any of the provisions of this Indenture as security for the Securities (other than moneys at the time required to be held for the payment of specific Securities at their Stated Maturities or at a time fixed for the redemption thereof) shall be applied in the following order from time to time, on the date or dates fixed by the Trustee and, in the case of a distribution of such moneys on account of principal, premium, if any, or interest upon presentation of the several Outstanding Securities, and stamping thereon of payment, if only partially paid, and upon surrender thereof, if fully paid: First: to the payment of all taxes, assessments or liens prior to the Lien of this Indenture, except those subject to which any sale shall have been made, all reasonable costs and expenses of collection, including the reasonable costs and expenses of handling the Pledged Property and of any sale thereof pursuant to the provisions of this Article and of the enforcement of any remedies hereunder or under any Lease Indenture, and to the payment of all amounts due the Trustee or any predecessor Trustee under Section 9.07, or through the Trustee by any Holder or Holders; Second: in case the principal of the Outstanding Securities or any of them shall not have become due, to the payment of any interest in default, in the order of the maturity of the installments of such interest, with interest at the rates specified in the respective Securities in respect of overdue payments (to the extent that payment of such interest shall be legally enforceable) on the overdue installments thereof; Third: in case the principal of any of but not all the Outstanding Securities shall have become due at their Stated Maturities, on a Redemption Date or otherwise, first to the payment of accrued interest in the order of the maturity of the installments thereof with interest at the respective rates specified in the Securities in respect of payments on overdue principal, premium, if any, and (to the extent that payment of such interest shall be legally enforceable) on overdue installments of interest, and next to the payment of the principal of all Securities then due; Fourth: in case the principal of all the Outstanding Securities shall have become due at their Stated Maturities, by declaration, on a Redemption Date or otherwise, to the payment of the whole amount then due and unpaid upon the Securities then Outstanding for principal, premium, if any, and interest, together with interest at the respective rates specified in the Securities in respect of overdue payments on principal, premium, if any, and (to the extent that payment of such interest shall be legally enforceable) on overdue installments of interest; and Fifth: in case the principal of all the Securities shall have become due at their Stated Maturities, by declaration, upon redemption or otherwise, and all of such Securities shall have been fully paid, together with all interest (including any interest on overdue payments) and premium, if any, thereon, any surplus then remaining shall be paid to the Company, its successors or assigns, or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct; provided, however, that all payments to be made pursuant to this Section shall be made ratably to the persons entitled thereto, without discrimination or preference. Section 8.13. Securities Held by Certain Persons Not To Share in Distribution Any Securities actually known to a Responsible Officer of the Trustee to be owned or held by, or for the account or benefit of, the Company, LP&L, or any Affiliate of either thereof shall not be entitled to share in any payment or distribution provided for in this Article until all Securities held by other Persons have been paid in full and all amounts owing to the Trustee (including without limitation, fees and expenses of its counsel) pursuant to the Indenture or otherwise have been paid in full. Section 8.14. Waiver of Appraisement, Valuation, Stay, Right to Marshalling. To the extent it may lawfully do so, each of the Company and LP&L, for itself and for any Person who may claim through or under it, hereby: (1) agrees that neither it nor any such Person will set up, plead, claim or in any manner whatsoever take advantage of, any appraisement, valuation, stay, extension or redemption laws, now or hereafter in force in any jurisdiction, which may delay, prevent or otherwise hinder (i) the performance or enforcement or foreclosure of this Indenture, (ii) the sale of any of the Pledged Property or (iii) the putting of the purchaser or purchasers thereof into possession of such property immediately after the sale thereof: (2) waives all benefit or advantage of any such laws; (3) waives and releases all rights to have the Pledged Property marshalled upon any foreclosure, sale or other enforcement of this Indenture; and (4) consents and agrees that all the Pledged Property may at any such sale be sold by the Trustee as an entirety. Section 8.15. Remedies Cumulative; Delay or Omission Not a Waiver. Every remedy given hereunder to the Trustee or to any of the Holders shall not be exclusive of any other remedy or remedies, and every such remedy shall be cumulative and in addition to every other remedy given hereunder or now or hereafter given by statute, law, equity or otherwise. The Trustee may exercise all or any of the powers, rights or remedies given to it hereunder or which may now or hereafter be given by statute, law, or equity or otherwise, in its absolute discretion. No course of dealing between the Company or LP&L and the Trustee or the Holders or any delay or omission of the Trustee or of any Holder to exercise any right, remedy or power accruing upon any Event of Default shall impair any such right, remedy or power or shall be construed to be a waiver of any such Event of Default or of any right of the Trustee or of the Holders or acquiescence therein, and, subject to the provisions of Section 8.07, every right, remedy and power given by this Article to the Trustee or to the Holders may be exercised from time to time and as often as may be deemed expedient by the Trustee or by the Holders. ARTICLE NINE The Trustee Section 9.01. Certain Duties and Responsibilities. (a) The Trustee shall have and be subject to all the duties and responsibilities specified with respect to an indenture trustee in the Trust Indenture Act. (b) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (c) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. Section 9.02. Notice of Defaults. In addition to its obligation to give notice to Holders as provided in Section 3.03, the Trustee shall give the Holders notice of default hereunder in the manner and to the extent required to do so by the Trust Indenture Act, unless such default shall have been cured or waived; provided, however, that in the case of any default of the character specified in Section 8.01(c) no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default. Section 9.03. Certain Rights of Trustee. Subject to the provisions of Section 9.01 and to the applicable provisions of the Trust Indenture Act: (a) the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting in reliance upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company or LP&L mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, or a LP&L Request or LP&L Order, in the case of a request or direction of either the Company or LP&L, as the case may be, and any resolution of the Board of Directors of the Company or LP&L may be sufficiently evidenced by a Board Resolution of the Company or LP&L, as the case may be; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officers' Certificate of the Company or LP&L; (d) the Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which may be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company or LP&L, personally or by agent or attorney at the sole cost and expense of the Company or LP&L, as the case may be; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent, attorney, custodian or nominee appointed with due care by it hereunder; (h) the Trustee shall not be charged with knowledge of any Event of Default with respect to the Securities of any series for which it is acting as Trustee unless either (i) a Responsible Officer of the Trustee assigned to the Corporate Trust & Agency Group of the Trustee (or any successor division or department of the Trustee) shall have actual knowledge of the Event of Default or (ii) written notice of such Event of Default shall have been given to the Trustee by the Company, any other obligor on such Securities or by any Holder of such Securities; and (i) In the event that the Trustee is also acting as Paying Agent or Security Registrar hereunder, the rights and protections afforded to the Trustee pursuant to this Article Nine shall also be afforded to such Paying Agent or Security Registrar. Section 9.04. Not Responsible for Recitals or Issuance of Securities The recitals contained herein and in the Securities, except the certificates of authentication, shall not be taken as the statements of the Trustee, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture, the Pledged Property or the Securities, except that the Trustee hereby represents and warrants that this Indenture has been executed and delivered by one of its officers who is duly authorized to execute and deliver such document on its behalf. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof. Section 9.05. May Hold Securities. The Trustee, any Paying Agent, any Security Registrar, any Authenticating Agent or any other agent of the Company or LP&L, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 9.08 and 9.13, may otherwise deal with the Company and LP&L with the same rights it would have if it were not Trustee, Paying Agent, Security Registrar or such other agent. Section 9.06. Funds May Be Held by Trustee or Paying Agent. Any monies held by the Trustee or the Paying Agent hereunder as part of the Pledged Property may, until paid out by the Trustee or the Paying Agent as herein provided, be carried by the Trustee or the Paying Agent on deposit with itself, and neither the Trustee nor the Paying Agent shall have any liability for interest upon any such monies. Section 9.07. Compensation and Reimbursement of Trustee and Authorized Agents. Each of the Company and LP&L shall be liable, jointly and severally, to: (a) pay, or cause to be paid, to each of the Trustee and any Authorized Agent (or any co-trustee or additional trustee contemplated by Section 9.15 hereof) from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) reimburse, or cause to be reimbursed, each of the Trustee and any Authorized Agent (or any co-trustee or additional trustee contemplated by Section 9.15 hereof)upon its request for all expenses, disbursements and advances incurred or made by it in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its own negligence, willful misconduct or bad faith; and (c) indemnify, or cause to be indemnified, each of the Trustee, any predecessor Trustee and any Authorized Agent (or any co-trustee or additional trustee contemplated by Section 9.15 hereof)for, and hold it harmless against, any loss, liability or expense incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust or the performance of its duties hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. As security for the performance of the obligations of the Company under this Section the Trustee shall have a lien prior to the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust under Section 12.03. Section 9.08. Disqualification; Conflicting Interests. If the Trustee shall have or acquire any conflicting interest within the meaning of the Trust Indenture Act, it shall either eliminate such conflicting interest or resign to the extent, in the manner and with the effect, and subject to the conditions, provided in the Trust Indenture Act and this Indenture. Section 9.09. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be: (a) a corporation organized and doing business under the laws of the United States of America, any State or Territory thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal or State authority, or (b) if and to the extent permitted by the Commission by rule, regulation or order upon application, a corporation or other Person organized and doing business under the laws of a foreign government, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 or the U.S. Dollar equivalent of the applicable foreign currency and subject to supervision or examination by authority of such foreign government or a political subdivision thereof substantially equivalent to supervision or examination applicable to United States institutional trustees, and, in either case, qualified and eligible under this Article and the Trust Indenture Act. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of such supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. No obligor upon the Securities or person directly or indirectly controlling, controlled by, or under common control with such obligor shall serve as Trustee upon such Securities. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Section 9.10 Resignation and Removal; Appointment of Successor (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 9.11. (b) The Trustee may resign at any time by giving written notice thereof to the Company and LP&L. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Company, LP&L and the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. (c) The Trustee may be removed at any time by an Act of the Holders of a majority in principal amount of the Outstanding Securities, delivered to the Trustee, the Company and LP&L. (d) If at any time: (i) the Trustee shall fail to comply with Section 9.08 after written request therefor by any Owner Trustee, the Company, LP&L or by any Holder who has been a bona fide Holder of a Security for at least six months, or (ii) the Trustee shall cease to be eligible under Section 9.09 and shall fail to resign after written request therefor by any Lessor or by any such Securityholder, or (iii) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) LP&L, acting after consultation with the Company, may remove the Trustee by Board Resolution or (ii) subject to Section 8.10, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, LP&L, acting after consultation with the Company, shall promptly appoint by Board Resolution a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Company, LP&L and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by LP&L. If no successor Trustee shall have been so appointed by LP&L, acting after consultation with the Company, or by the Holders, and accepted appointment in the manner hereinafter provided, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee. (f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee by mailing written notice of such event by first-class mail, postage prepaid, to the Holders of Securities as their names and addresses appear in the Security Register. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. (g) No Trustee under the Indenture shall be personally liable for any action or omission of any successor Trustee. Section 9.11. Acceptance of Appointment by Successor Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company, LP&L and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of any Owner Trustee, the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder, subject nevertheless to its lien, if any, provided for in Section 9.07. Upon request of any such successor Trustee, LP&L and the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts. No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. Section 9.12. Merger, Conversion, Consolidation or Succession to Business Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate agency or corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenti cated with the same effect as if such successor Trustee had itself authenticated such Securities. Section 9.13. Preferential Collection of Claims against any Obligor. If the Trustee shall be or become a creditor of any obligor (within the meaning of the Trust Indenture Act) upon the Securities, the Trustee shall be subject to any and all applicable provisions of the Trust Indenture Act regarding the collection of claims against such obligor. Section 9.14. Authorized Agents. (a) There shall at all times hereunder be a Paying Agent authorized by the Company to pay the principal of and premium, if any, and interest on any Securities and a Security Registrar for the purpose of registration of transfer and exchange of Securities. The Trustee is hereby initially appointed as Paying Agent and Security Registrar hereunder. The Company may appoint one or more Paying Agents. Any Paying Agent (other than one simultaneously serving as the Trustee) from time to time appointed hereunder shall execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will: (1) hold all sums held by it for the payment of principal of and premium, if any, and interest on Securities in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (2) give the Trustee within five days thereafter notice of any default by any obligor upon the Securities in the making of any such payment of principal, premium, if any, or interest; and (3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. Notwithstanding any other provision of this Indenture, any payment required to be made to or received or held by the Trustee may, to the extent authorized by written instructions of the Trustee, be made to or received or held by a Paying Agent in the Borough of Manhattan, The City of New York, for the account of the Trustee. (b) In addition, at any time when any of the Securities remain Outstanding the Trustee may appoint an Authenticating Agent or Agents with respect to the Securities of one or more series which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issuance, exchange, registration of transfer or partial redemption thereof or pursuant to Section 2.09, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder (it being understood that wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent). If an appointment of an Authenticating Agent with respect to the Securities of one or more series shall be made pursuant hereto, the Securities of such series may have endorsed thereon, in addition to or in lieu of the Trustee's certificate of authentication, an alternate certificate of authentication in the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. _______________________________________ As Trustee By____________________________________ As Authenticating Agent By____________________________________ Authorized Signatory (c) Any Authorized Agent shall be (i) acceptable to the Company and LP&L, (ii) a bank or trust company, (iii) a corporation organized and doing business under the laws of the United States or of any State, Territory or the District of Columbia, with a combined capital and surplus of at least $50,000,000, and (iv) authorized under such laws to exercise corporate trust powers, subject to supervision or examination by federal or state authorities. If such Authorized Agent publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authorized Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authorized Agent shall cease to be eligible in accordance with the provisions of this Section, such Authorized Agent shall resign immediately in the manner and with the effect specified in this Section. (d) Any corporation into which any Authorized Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, consolidation or conversion to which any Authorized Agent shall be a party, or any corporation succeeding to the corporate trust business of any Authorized Agent, shall be the successor of such Authorized Agent hereunder, if such successor corporation is otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the parties hereto or such Authorized Agent or such successor corporation. (e) Any Authorized Agent may at any time resign by giving written notice of resignation to the Trustee, LP&L and the Company. The Company may, and at the request of the Trustee or LP&L shall, at any time, terminate the agency of any Authorized Agent by giving written notice of termination to such Authorized Agent and to the Trustee. Upon the resignation or termination of an Authorized Agent or in case at any time any such Authorized Agent shall cease to be eligible under this Section (when, in either case, no other Authorized Agent performing the functions of such Authorized Agent shall have been appointed), the Company shall promptly appoint one or more qualified successor Authorized Agents approved by the Trustee and LP&L to perform the functions of the Authorized Agent which has resigned or whose agency has been terminated or who shall have ceased to be eligible under this Section. The Company shall give written notice of any such appointment to all Holders as their names and addresses appear on the Security Register. In the event that an Authorized Agent shall resign or be removed, or be dissolved, or if the property or affairs of such Authorized Agent shall be taken under the control of any state or federal court or administrative body because of bankruptcy or insolvency, or for any other reason, and the Company shall not have appointed such Authorized Agent's successor or successors, the Trustee shall ipso facto be deemed to be such Authorized Agent for all purposes of this Indenture until the Company appoints a successor or successors to such Authorized Agent. Section 9.15. Co-Trustee or Separate Trustee (a) If at any time or times it shall be necessary or prudent in order to conform to any law of any jurisdiction in which property shall be held subject to the lien hereof, or the Trustee shall be advised by counsel satisfactory to it that it is so necessary or prudent in the interest of Holders, or the Holders of a majority in principal amount of Outstanding Securities shall in writing so request, the Trustee, the Company and LP&L shall execute and deliver all instruments and agreements necessary or proper to constitute another bank or trust company or one or more Persons approved by the Trustee either to act as co-trustee or co-trustees of all or any part of the Pledged Property jointly with the Trustee originally named herein or any successor or successors, or to act as separate trustee or trustees of all or any such property. In the event LP&L and the Company shall have not joined in the execution of such instruments and agreements within 10 days after the receipt of a written request from the Trustee so to do, or in case an Event of Default shall have occurred and be continuing, the Trustee may act under the foregoing provisions of this Section without the concurrence of LP&L or the Company; and LP&L and the Company each hereby appoint the Trustee its agent and attorney to act for it under the foregoing provisions of this Section in either of such contingencies. (b) Every additional trustee hereunder shall, to the extent permitted by law, be appointed and act, and such additional trustee and its successors shall act, subject to the following provisions and conditions, namely: (1) the Securities shall be authenticated and delivered, and all powers duties, obligations and rights conferred upon the Trustee in respect of the custody, control and management of moneys, papers or securities, shall be exercised, solely by the Trustee, unless otherwise expressly permitted by the terms hereof; (2) all rights, powers, duties and obligations conferred or imposed upon the Trustee (other than those referred to in the preceding clause (1)), shall be conferred or imposed upon and exercised or performed by the Trustee and such additional trustee or trustees jointly, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed, the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations shall be exercised and performed by such additional trustee or trustees; (3) no power given hereby to, or which it is provided hereby may be exercised by, any such additional trustee or trustees, shall be exercised hereunder by such additional trustee or trustees, except jointly with, or with the consent in writing of, the Trustee, anything herein contained to the contrary notwithstanding; (4) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and (5) LP&L, the Company and the Trustee, at any time, by an instrument in writing, executed by them jointly, may remove any such additional trustee, and in that case, by an instrument in writing executed by them jointly, may appoint a successor or successors to such additional trustee or trustees, as the case may be, anything herein contained to the contrary notwithstanding; provided, however, that if LP&L, the Company and the Trustee remove any such additional trustee which has been appointed at the request of the Holders pursuant to clause (a) above, then such parties shall appoint a successor or successors to such additional trustee so removed unless the Holders of a majority in principal amount of Outstanding Securities shall have agreed in writing that no such successor or successors need be appointed. In the event that LP&L and the Company shall not have joined in the execution of any such instrument within 10 days after the receipt of a written request from the Trustee to do so, the Trustee shall have the power to remove any such additional trustee and to appoint a successor additional trustee without the concurrence of LP&L and the Company, each hereby appointing the Trustee its agent and attorney to act for it in such connection in such contingency. In the event that the Trustee alone shall have appointed an additional trustee or trustees or co-trustee or co-trustees as above provided, it may at any time, by an instrument in writing, remove any such additional trustee or co-trustee, the successor to any such trustee or co-trustee so removed, to be appointed by LP&L, the Company and the Trustee, or by the Trustee alone, as hereinbefore in this Section provided. ARTICLE TEN Holders' Lists and Reports by Trustee and LP&L Section 10.01. LP&L to Furnish Trustee Names and Addresses of Holders Semiannually, not later than March 31 and September 30 in each year, commencing March 31, 199_ and at such other times as the Trustee may request in writing, LP&L shall furnish or cause to be furnished to the Trustee information as to the names and addresses of the Holders, and the Trustee shall preserve such information and similar information received by it in any other capacity and afford to the Holders access to information to preserve by it, all to such extent, if any, and in such manner as shall be required by the Trust Indenture Act; provided, however, that so long as the Trustee is the sole Security Registrar, or is otherwise furnished a copy of the Security Register, no such list need be furnished by LP&L. Section 10.02. Reports by Trustee and LP&L. If required by Section 313 (a) of the Trust Indenture Act, within thirty days after December 1 in each year commencing December 1, 199_, the Trustee shall transmit to the Holders and the Commission a report with respect to any events described in Section 313(a) of the Trust Indenture Act, in such manner and to the extent required by the Trust Indenture Act. The Trustee shall transmit to the Holders and the Commission, and LP&L shall file with the Trustee and transmit to the Holders, such other information, reports and other documents, if any, at such times and in such manner, as shall be required by the Trust Indenture Act. ARTICLE ELEVEN Supplemental Indentures Section 11.01. Supplemental Indentures Without Consent of Holders Without the consent of the Holders of any Securities, LP&L, when authorized by a Board Resolution, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto (a "Series Supplemental Indenture" in the case of item (a) below), in form satisfactory to the Trustee, for any of the following purposes: (a) to establish the form and terms of Securities of any series of Securities permitted by Sections 2.01 and 2.03; or (b) to evidence the succession of another corporation to LP&L and the assumption by any such successor of the covenants of LP&L herein contained, or to evidence the succession of another corporation to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities contained; or (c) to evidence the succession of a new trustee hereunder or a co-trustee or separate trustee pursuant to Section 9.15 hereof; (d) to add to the covenants of the Company or LP&L, for the benefit of the Holders of the Securities, or to evidence the surrender of any right or power herein conferred upon the Company or LP&L; or (e) to convey, transfer and assign to the Trustee, and to subject to the Lien of this Indenture, with the same force and effect as though included in the Granting Clauses hereof, additional Pledged Lessor Bonds or additional properties or assets, and to correct or amplify the description of any property at any time subject to the Lien of this Indenture or to assure, convey and confirm unto the Trustee any property subject or required to be subject to the Lien of this Indenture; or (f) to permit or facilitate the issuance of Securities in uncertificated form; or (g) to change or eliminate any provision of this Indenture; provided, however, that if such change or elimination shall adversely affect the interests of the Holders of Securities of any series, such change or elimination shall become effective with respect to such series only when no Security of such series remains Outstanding; or (h) to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided such action shall not adversely affect the interest of the Holders of the Securities in any material respect. Without limiting the generality of the foregoing, if the Trust Indenture Act as in effect at the date of the execution and delivery of this Indenture or at any time thereafter shall be amended and: (x) if any such amendment shall require one or more changes to any provisions hereof or the inclusion herein of any additional provisions, or shall by operation of law be deemed to effect such changes or incorporate such provisions by reference or otherwise, this Indenture shall be deemed to have been amended so as to conform to such amendment to the Trust Indenture Act, and the Company, LP&L and the Trustee may, without the consent of any Holders, enter into an indenture supplemental hereto to evidence such amendment hereof; or (y) if any such amendment shall permit one or more changes to, or the elimination of, any provisions hereof which, at the date of the execution and delivery hereof or at any time thereafter, are required by the Trust Indenture Act to be contained herein or are contained herein to reflect any provisions of the Trust Indenture Act as in effect at such date, this Indenture shall be deemed to have been amended to effect such changes or elimination, and the Company, LP&L and the Trustee may, without the consent of any Holders, enter into an indenture supplemental hereto to evidence such amendment hereof. Section 11.02. Supplemental Indenture With Consent of Holders. With the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series then Outstanding under this Indenture, considered as one class, by Act of said Holders delivered to the Company, LP&L and the Trustee, the Company and LP&L, when authorized by a Board Resolution, may, and the Trustee, subject to Sections 11.03 and 11.04, shall, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture; provided, however, that if there shall be Securities of more than one series Outstanding hereunder and if a proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all series so directly affected, considered as one class, shall be required; and provided, further, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security or coupon of each series directly affected thereby: (a) change the Stated Maturity of the principal of, or any installment of interest on, or any Installment Payment Date, or the dates or circumstances of payment of premium, if any, on, any Security, or reduce the principal amount thereof or the interest thereon or any premium payable upon the redemption thereof, or change the place of payment where, or the coin or currency in which, any Security or the premium, if any, or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment of principal or interest on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date) or such payment of premium, if any, on or after the date such premium becomes due and payable or change the dates or the amounts of payments to be made through the operation of a Sinking Fund or through installment payments of principal in respect of such Securities, or (b) permit the creation of any lien prior to or, except with respect to additional series of Securities issued in accordance with the terms of this Indenture, pari passu with the Lien of this Indenture with respect to any of the Pledged Property, or terminate the Lien of this Indenture on any Pledged Property (except in each case as permitted by, and pursuant to, Article Four) or deprive any Holder of the security afforded by the Lien of this Indenture, or (c) reduce the percentage in principal amount of the Outstanding Securities, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or reduce the requirements of Section 13.04 for quorum or voting, or (d) modify any of the provisions of this Section or Section 8.08, except to increase any percentage or percentages referred to in this Section or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Security affected thereby. A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. Upon receipt by the Trustee of Board Resolutions of the Company and LP&L and such other documentation as the Trustee may reasonably require and upon the filing with the Trustee of evidence of the Act of said Holders, the Trustee shall join in the execution of such supplemental indenture or other instrument, as the case may be, subject to the provisions of Sections 11.03 and 11.04. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. Section 11.03. Documents Affecting Immunity or Indemnity. If in the opinion of the Company or the Trustee any document required to be executed by it pursuant to the terms of Section 11.02 affects any interest, right, duty, immunity or indemnity in favor of the Company or the Trustee under this Indenture or any of the Participation Agreements, the Company or the Trustee, as the case may be, may in its discretion decline to execute such document. Section 11.04. Election of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall receive, and (subject to Section 9.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. Section 11.05. Effect of Supplemental Indentures Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall, subject to the provisions of this Article, be bound thereby. Section 11.06. Conformity with Trust Indenture Act Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the TIA as then in effect. Section 11.07. Reference in Securities to Supplemental Indentures Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by any Owner Trustee, the Company or LP&L, bear a notation in form approved by such Lessor, the Company, LP&L and the Trustee as to any matter provided for in such supplemental indenture; and, in such case, suitable notation may be made upon Outstanding Securities after proper presentation and demand. If any Owner Trustee, the Company or LP&L shall so determine, new Securities so modified as to conform, in the opinion of such Owner Trustee, the Company, LP&L and the Trustee, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities. ARTICLE TWELVE Satisfaction and Discharge Section 12.01. Satisfaction and Discharge of Securities. Any Security or Securities, or any portion of the principal amount thereof, shall, prior to the Stated Maturity of principal thereof, be deemed to have been paid for all purposes of this Indenture, and the entire indebtedness of the Company in respect thereof shall be deemed to have been satisfied and discharged: (a) if the Company shall have irrevocably deposited with the Trustee, in trust, money in an amount which shall be sufficient to pay when due the principal of and premium, if any, and interest due and to become due on such Securities or portions thereof on and prior to the Stated Maturity of principal thereof or upon redemption or each principal Installment Payment Date; or (b) if the Pledged Lessor Bonds, of the series corresponding to the series of which such Security or Securities are a part, shall be deemed to have been paid in accordance with Section 11.01(a) of the Lease Indenture or Lease Indentures under which such Pledged Lessor Bonds were issued; provided, however, that, in case of redemption of Securities, the notice requisite to the validity of such redemption shall have been given or irrevocable authority shall have been given by the Company to the Trustee to give such notice, under arrangements satisfactory to the Trustee; and provided, further, that the Company shall have delivered to the Trustee: (x) if any such deposit of money shall have been made prior to the Stated Maturity of principal or Redemption Date of such Securities, a Company Order stating that such money shall be held by the Trustee, in trust, as provided in Section 12.03, and (y) if such Pledged Lessor Bonds are so deemed to have been paid, a copy of each certificate or opinion delivered to the Lease Indenture Trustees pursuant to Section 11.01(a) of the related Lease Indentures. Upon satisfaction of the aforesaid conditions with respect to any Security or Securities or portion thereof, the Trustee shall, upon receipt of a Company Request, acknowledge in writing that such Security or Securities or portions thereof are deemed to have been paid for all purposes of this Indenture and that the entire indebtedness of the Company in respect thereof is deemed to have been satisfied and discharged. If payment at Stated Maturity of principal of less than all of the Securities of any series is to be provided for in the manner and with the effect provided in this Section, the Trustee shall select such Securities, or portions of principal amount thereof, in the manner specified by Section 6.03 for selection for redemption of less than all the Securities of a series. In the event that Securities which shall be deemed to have been paid as provided in this Section do not mature and are not to be redeemed within the sixty (60) day period commencing with the date of the deposit with the Trustee of moneys, or the date on which Pledged Lessor Bonds are deemed to have been paid, as the case may be, the Company shall, as promptly as practicable, give a notice, in the same manner as a notice of redemption with respect to such Securities, to the Holders of such Securities to the effect that such Securities are deemed to have been paid and the circumstances thereof. Notwithstanding the satisfaction and discharge of any Securities as aforesaid, the obligations of the Company and the Trustee in respect of such Securities under Sections 2.07, 2.08, 2.09, 5.02, 5.03, 9.07 and 9.14 and this Article Twelve shall survive. Section 12.02. Satisfaction and Discharge of Indenture This Indenture shall upon Company Request cease to be of further effect (except as hereinafter expressly provided), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (a) either (i) all Securities theretofore authenticated and delivered (other than (A) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.09 and (B) Securities deemed to have been paid in accordance with Section 12.01) have been delivered to the Trustee for cancellation; or (ii) all Securities not theretofore delivered to the Trustee for cancellation shall be deemed to have been paid in accordance with Section 12.01; (b) all other sums due and payable hereunder have been paid; and (c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Upon satisfaction of the aforesaid conditions, the Trustee shall, upon receipt of a Company Request, acknowledge in writing the satisfaction and discharge of this Indenture. Notwithstanding the satisfaction and discharge of this Indenture as aforesaid, the obligations of the Company, LP&L and the Trustee under Sections 2.07, 2.08, 2.09, 5.02, 5.03, 9.07 and 9.14 and this Article Twelve shall survive. Upon satisfaction and discharge of this Indenture as provided in this Section, the Trustee shall assign, transfer and turn over to or upon the order of the Company, any and all money, securities and other property then held by the Trustee for the benefit of the Holders of the Securities other than money held by the Trustee pursuant to Section 12.03 and the Pledged Lessor Bonds. Section 12.03. Application of Trust Money The money deposited with the Trustee pursuant to Section 12.01 shall not be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal of and premium, if any, and interest on the Securities or portions of principal amount thereof in respect of which such deposit was made, all subject, however, to the provisions of Section 5.03; provided, however, that, if not then needed for such purpose, such money shall, to the extent practicable, be invested in direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America or certificates of an ownership interest in the principal of or interest on any of such obligations, in any case maturing at such times and in such amounts as shall be sufficient to pay when due the principal of and premium, if any, and interest due and to become due on such Securities or portions thereof on and prior to the Stated Maturity, Installment Payment Dates or Redemption Date thereof, and so long as there shall not have occurred and be continuing an Event of Default, interest earned from such investment shall be paid over to or upon the order of the Company as received by the Trustee, less any fees and expenses of the Trustee (including without limitation the fees and expenses of its counsel) incurred in connection therewith free and clear of any trust, lien or pledge under this Indenture; and provided, further, that, so long as there shall not have occurred and be continuing an Event of Default, any moneys held by the Trustee in accordance with this Section on the Stated Maturity, Installment Payment Dates or Redemption Date of all such Securities in excess of the amount required to pay the principal of and premium, if any, and interest then due on such Securities shall be paid over to or upon the order of the Company less any fees and expenses of the Trustee (including without limitation the fees and expenses of its counsel) incurred in connection therewith free and clear of any trust, lien or pledge under this Indenture. ARTICLE THIRTEEN Meetings of Holders of Securities; Action without Meeting Section 13.01. Purposes for Which Meetings May Be Called. A meeting of Holders of Securities of one or more, or all, series, may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by Holders of Securities of such series. Section 13.02. Call, Notice and Place of Meetings (a) The Trustee may at any time call a meeting of Holders of Securities of one or more, or all, series for any purpose specified in Section 13.01, to be held at such time and at such place in the Borough of Manhattan, The City of New York, as the Trustee shall determine, or, with the approval of the Company and LP&L, at any other place. Notice of every such meeting, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given to the Company, LP&L, each Owner Trustee, each Owner Participant and the Holders, in the manner provided in Sections 1.05 and 1.06 and, in the case of each Owner Trustee or Owner Participant, in the manner specified in Section 19 of the Participation Agreement, not less than 21 nor more than 180 days prior to the date fixed for the meeting. (b) If the Trustee shall have been requested to call a meeting of the Holders of Securities of one or more, or all, series by the Company, by LP&L or by the Holders of 33% in aggregate principal amount of all of such series, considered as one class, for any purpose specified in Section 13.01, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have made the first publication of the notice of such meeting within 21 days after receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company, LP&L or the Holders of Securities of such series in the amount above specified, as the case may be, may determine the time and the place in the Borough of Manhattan, The City of New York, or in such other place as shall be determined or approved by the Company and LP&L, for such meeting and may call such meeting for such purposes by giving notice thereof as provided in subsection (a) of this Section. (c) Any meeting of Holders of Securities of one or more, or all, series shall be valid without notice if the Holders of all Outstanding Securities of such series are present in person or by proxy and if representatives of the Company, LP&L and the Trustee are present, or if notice is waived in writing before or after the meeting by the Holders of all Outstanding Securities of such series, or by such of them as are not present at the meeting in person or by proxy, and by the Company, LP&L and the Trustee. Section 13.03. Persons Entitled to Vote at Meetings. To be entitled to vote at any meeting of Holders of Securities of one or more, or all, series, a Person shall be (a) a Holder of one or more Outstanding Securities of such series or (b) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Securities of such series by such Holder or Holders. The only Persons who shall be entitled to attend any meeting of Holders of Securities of any series shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company, LP&L, any Owner Trustee and any Owner Participant and their respective counsel. Section 13.04. Quorum; Action The Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of the series with respect to which a meeting shall have been called as hereinbefore provided, considered as one class, shall constitute a quorum for a meeting of Holders of Securities of such series: provided, however, that if any action is to be taken at such meeting which this Indenture expressly provides may be taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Securities of such series, considered as one class, the Persons entitled to vote such specified percentage in principal amount of the Outstanding Securities of such series, considered as one class, shall constitute a quorum. In the absence of a quorum within 30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Securities of such series, be dissolved. In any other case the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Except as provided by Section 13.05(e), notice of the reconvening of any adjourned meeting shall be given as provided in Section 13.02(a), except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Outstanding Securities of such series which shall constitute a quorum. Except as limited by Section 11.02, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in aggregate principal amount of the Outstanding Securities of the series with respect to which such meeting shall have been called, considered as one class; provided, however, that, except as so limited, any resolution with respect to any action which this Indenture expressly provides may be taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Securities of such series, considered as one class, may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of such specified percentage in principal amount of the Outstanding Securities of such series, considered as one class. Any resolution passed or decision taken at any meeting of Holders of Securities duly held in accordance with this Section shall be binding on all the Holders of Securities of the series with respect to which such meeting shall have been held, whether or not present or represented at the meeting. Section 13.05. Attendance at Meetings; Determination of Voting Rights; Conduct and Adjournment of Meetings. (a) Attendance at meetings of Holders of Securities may be in person or by proxy; and, to the extent permitted by law, any such proxy shall remain in effect and be binding upon any future Holder of the Securities with respect to which it was given unless and until specifically revoked by the Holder or future Holder of such Securities before being voted. (b) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities in regard to proof of the holding of such Securities and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in Section 1.04 and the appointment of any proxy shall be proved in the manner specified in Section 1.04. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 1.04 or other proof. (c) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company, LP&L or by Holders of Securities as provided in Section 13.02(b), in which case the Company or the Holders of Securities of the series calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of all series represented at the meeting, considered as one class. (d) At any meeting each Holder of a Security or proxy shall be entitled to one vote for each $1,000 principal amount of Securities held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security or proxy. (e) Any meeting duly called pursuant to Section 13.02 at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of all series represented at the meeting, considered as one class; and the meeting may be held as so adjourned without further notice. Section 13.06. Counting Votes and Recording Action of Meetings The vote upon any resolution submitted to any meeting of Holders of Securities shall be by written ballots on which shall be subscribed the signatures of the Holders of Securities or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities, of the series with respect to which the meeting shall have been called, held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in quadruplicate of all votes cast at the meeting. A record, a least in quadruplicate, of the proceedings of each meeting of Holders of Securities shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 13.02 and, if applicable, Section 13.04. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to each of the Company and LP&L, and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. Section 13.07. Action Without Meeting In lieu of a vote of Holders of Securities at a meeting as hereinbefore contemplated in this Article, any request, demand, authorization, direction, notice, consent, waiver or other action may be made, given or taken by Holders of Securities by written instruments as provided in Section 1.04. ARTICLE FOURTEEN Liability of the Company Solely Corporate; No Liability of LP&L Section 14.01. Liability of the Company Solely Corporate No recourse shall be had for the payment of the principal of or premium, if any, or interest on any Securities, or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or agreement under this Indenture, against any incorporator, stockholder, officer or director, as such, past, present or future of the Company or of any predecessor or successor corporation (either directly or through the Company or a predecessor or successor corporation), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that this Indenture and all the Securities are solely corporate obligations of the Company, and that no personal liability whatsoever shall attach to, or be incurred by, any incorporator, stockholder, officer or director, past, present or future, of the Company or of any predecessor or successor corporation, either directly or indirectly through the Company or any predecessor or successor corporation, because of the indebtedness hereby authorized or under or by reason of any of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or to be implied herefrom or therefrom, and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution of this Indenture and the issuance of the Securities. Section 14.02. No Liability of LP&L. In no event shall any provision of this Indenture or the Securities constitute a guaranty or assumption by LP&L of the Securities or the indebtedness represented thereby (it being understood that, in accordance with Section 2.16 of each Lease Indenture, LP&L may assume, or be deemed to have assumed, the Pledged Lessor Bonds). _____________ This instrument may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. In Witness Whereof, the parties have caused this Indenture to be duly executed as of the day and year first above written. W3A Funding Corporation By Title: Vice President Louisiana Power & Light Company By Title: Vice President and Treasurer BANKERS TRUST COMPANY, not in its individual capacity but solely as Trustee By Title: Vice President State of New York ) ) ss.: County of New York ) Personally appeared before me, the undersigned authority in and for the said county and state, on this __th day of ______________, within my jurisdiction, the within named ____________, who acknowledged that he is a Vice President of W3A Funding Corporation, a Delaware corporation, and that for and on behalf of the said corporation, and as its act and deed, he executed the above and foregoing instrument, after first having been duly authorized by said corporation so to do. /s/ Notary Public My Commission Expires: State of Louisiana ) ) ss.: Parish of Orleans ) Personally appeared before me, the undersigned authority in and for the said parish and state, on this __th day of ______________, within my jurisdiction, the within named ________________, who acknowledged that he is a _________________ of Louisiana Power & Light Company, a Louisiana corporation, and that for and on behalf of the said corporation, and as its act and deed, he executed the above and foregoing instrument, after first having been duly authorized by said corporation so to do. /s/ Notary Public My Commission Expires: State of New York ) ) ss.: County of New York ) Personally appeared before me, the undersigned authority in and for the said county and state, on this __th day of _______________, within my jurisdiction, the within named ____________________, who acknowledged that he is a __________ of BANKERS TRUST COMPANY, a New York banking corporation, and that for and on behalf of the said corporation, and as its act and deed,he executed the above and foregoing instrument, after first having been duly authorized by said corporation so to do. /s/ Notary Public My Commission Expires: State of New York ) ) ss.: County of New York ) Personally appeared before me, the undersigned authority in and for the said county and state, on this __th day of _____________, within my jurisdiction, the within named , who acknowledged that he is a ____________ of BANKERS TRUST COMPANY, a New York banking corporation, Trustee under the above and foregoing instrument, and that for and on behalf of the said corporation, and as its act and deed in said capacity as Trustee and its having been duly authorized so to do, he executed the above and foregoing instrument, after first having been duly authorized by said corporation so to do. /s/ Notary Public My Commission Expires: EXHIBIT A IDENTIFICATION OF CERTAIN DOCUMENTS AND PARTIES THERETO PART I Lease _ Facility Lease No. 1, dated as of September 1, 1989, as amended and supplemented, between LP&L and the Owner Trustee, as Lessor (a "Lessor"). Lease Indenture _ Indenture of Mortgage and Deed of Trust No. 1, dated as of September 1, 1989, as amended and supplemented ("Lease Indenture No. 1"), between the Owner Trustee and Bankers Trust Company and Stanley Burg, as trustees (together, a "Lease Indenture Trustee"). Owner Trustee _ First National Bank of Commerce as trustee under Trust Agreement No. 1, dated as of September 1, 1989, with ESSL 2, Inc. (the "Owner Participant"). Participation Agreement _ Participation Agreement No. 1, dated as of September 1, 1989, among the Owner Participant, First National Bank of Commerce, individually and as Owner Trustee, Bankers Trust Company and Stanley Burg, individually and as Indenture Trustee, and LP&L. PART II Lease _ Facility Lease No. 2, dated as of September 1, 1989, as amended and supplemented, between LP&L and the Owner Trustee, as Lessor (a "Lessor"). Lease Indenture _ Indenture of Mortgage and Deed of Trust No. 2, dated as of September 1, 1989, as amended and supplemented ("Lease Indenture No. 2"), between the Owner Trustee and Bankers Trust Company of California, National Association, and Cecil D. Bobey, as trustees (together, a "Lease Indenture Trustee"). Owner Trustee _ First National Bank of Commerce as trustee under Trust Agreement No. 2, dated as of September 1, 1989, with ESSL 2, Inc. (the "Owner Participant"). Participation Agreement _ Participation Agreement No. 2, dated as of September 1, 1989, among the Owner Participant, First National Bank of Commerce, individually and as Owner Trustee, Bankers Trust Company of California, National Association, and Cecil D. Bobey, individually and as Indenture Trustee, and LP&L. PART III Lease - Facility Lease No. 3, dated as of September 1, 1989, as amended and supplemented, between LP&L and the Owner Trustee, as Lessor (a "Lessor"). Lease Indenture - Indenture of Mortgage and Deed of Trust No. 3, dated as of September 1, 1989, as amended and supplemented ("Lease Indenture No. 3"), between the Owner Trustee and Security Pacific National Trust Company (New York) and Kenneth T. McGraw, as trustee (together, a "Lease Indenture Trustee"). Owner Trustee - First National Bank of Commerce as trustee under Trust Agreement No. 3, dated as of September 1, 1989, with ESSL 2, Inc. (an "Owner Participant"). Participation Agreement - Participation Agreement No. 3, dated as of September 1, 1989, among the Owner Participant, First National Bank of Commerce, individually and as Owner Trustee, Security Pacific National Trust Company (New York) and Kenneth T. McGraw, individually and as Indenture Trustee, and LP&L. EX-4 4 Exhibit 4(b) SUPPLEMENTAL INDENTURE NO. 1 dated as of __________, 19__ to COLLATERAL TRUST INDENTURE dated as of __________, 19__ among W3A FUNDING CORPORATION, LOUISIANA POWER & LIGHT COMPANY and BANKERS TRUST COMPANY, not in its individual capacity but solely as Trustee SUPPLEMENTAL INDENTURE NO. 1, dated as of __________, 19__, among W3A Funding Corporation, a Delaware corporation (the "Company"), LOUISIANA POWER & LIGHT COMPANY, a Louisiana corporation ("LP&L"), and BANKERS TRUST COMPANY, a New York banking corporation, not in its individual capacity but solely as trustee (the "Trustee"), W I T N E S S E T H : WHEREAS, the Company and LP&L have heretofore executed and delivered to the Trustee a Collateral Trust Indenture, dated as of __________ __, 199_ (the "Original Indenture"), to provide for the issuance from time to time of the Company's bonds, notes or other evidences of indebtedness to be issued in one or more series (the "Securities"); and WHEREAS, Sections 2.03 and 11.01 of the Original Indenture provide, among other things, that the Company, LP&L and the Trustee may enter into indentures supplemental to the Original Indenture for, among other things, the purpose of establishing the form and terms of Securities of any series as permitted by said Sections 2.03 and 11.01; and WHEREAS, the Company and LP&L (a) desire the issuance by the Company of [two] series of Securities to be designated as hereinafter provided and (b) have requested the Trustee to enter into this Supplemental Indenture No. 1 for the purpose of establishing the form and terms of the Securities of such series (said Original Indenture, as supplemented by this Supplemental Indenture No. 1, being hereinafter called the "Indenture"); and WHEREAS, all action on the part of the Company and LP&L necessary to authorize the execution and delivery of this Supplemental Indenture No. 1 and the issuance of the aforesaid Securities has been duly taken; and WHEREAS, all acts and things necessary to make the Securities of the series herein created and established, when executed by the Company and authenticated and delivered by the Trustee as provided in the Original Indenture, the valid, binding and legal obligations of the Company, and to constitute these presents a valid and binding supplemental indenture and agreement according to its terms, have been done and performed, and the execution of this Supplemental Indenture No. 1 and the creation and issuance under the Indenture of such Securities have in all respects been duly authorized; NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE NO. 1 WITNESSETH: That in order to establish the form and terms of and to authorize the authentication and delivery of the Securities of the series herein created and established, and in consideration of the acceptance of such Securities by the holders thereof and of the sum of one dollar duly paid to the Company by the Trustee at the execution of these presents, the receipt whereof is hereby acknowledged, the Company and LP&L each covenant and agree with the Trustee, for the equal and proportionate benefit of the respective holders from time to time of the Securities, as follows: ARTICLE ONE THE BONDS SECTION 1.01. Terms of the Bonds. There are hereby created and established two separate series of Securities designated, respectively, "Waterford 3 Secured Lease Obligation Bonds, ____% Series due ____" (hereinafter sometimes called the "Series ____ Bonds") and "Waterford 3 Secured Lease Obligation Bonds, ____% Series due ____" (hereinafter sometimes called the "Series ____ Bonds" ). The Series ____ Bonds and the Series ____ Bonds are hereinafter sometimes referred to, collectively, as the "Bonds". The Bonds of each series shall be issued in the aggregate principal amounts, shall bear interest at the rates per annum and shall have the Stated Maturities of principal set forth below: Original Interest Final Principal Amount Rate Maturity Series ____ Bonds $ % Series ____ Bonds % $ The Series ____ Bonds and the Series ____ Bonds shall be substantially in the form of Exhibit A hereto. The interest on the Bonds of each series of Bonds shall be due and payable as and from the most recent interest payment date to which interest has been paid or duly provided for or, with respect to any Bond issued prior to the first interest payment date, the date of original issuance thereof, semiannually on _________ and _________ in each year (commencing ______________), until the principal amount of the Bonds of such series is paid in full or duly provided for. Payment of the principal of and premium, if any, and interest on each Bond shall be made to the Holder thereof upon presentation and surrender thereof at the corporate trust office of any Paying Agent, except that payments of interest and Installment Payment Amounts on such Bond, other than such amounts payable on the Stated Maturity thereof, shall be made without presentation or surrender thereof, by check drawn upon the Paying Agent and mailed to the address of the Holder of such Bond at the close of business on the Regular Record Date for such payment (except as provided in Section 2.16 of the Original Indenture in the case of a defaulted interest or Installment Payment Amount payment) as such address shall appear in the Security Register and except that if such Holder shall be a securities depositary, such payment may be made by such other means in lieu of check as shall be agreed upon by the Lessee, the Trustee and such Holder. SECTION 1.02. Installment Payments of Principal. (a) Installment Payments. On each Installment Payment Date set forth below, the Company shall pay an installment of principal of each Bond of each series equal in amount to the Installment Payment Percentage set forth below for such Installment Payment Date multiplied by the Original Principal Amount (as hereinafter defined) of such Bond. "Original Principal Amount", when used with respect to the Bonds of either series, means the principal amount identified as such on the face of such Bond. Installment Installment Payment Percentage Payment Date Series ____ Series ____ Bonds Bonds (b) Certain Adjustments to Installment Payments and Stated Maturity. (i) The principal amount of Bonds of either series to be paid in installments on Installment Payment Dates and at Stated Maturity for such series may be adjusted (a "Payment Adjustment") and at Stated Maturity at the direction of the Company, such adjustment to be correlative, as to amounts and dates, to any adjustment to the principal amortization schedule of the Pledged Lessor Bonds of the corresponding series issued under any Lease Indenture pursuant to Section 6.03 of Supplemental Indenture No. 2 to such Lease Indenture; provided, however, that (A) no Payment Adjustment shall be made by the Company which will increase or decrease the average life of the Bonds of any series (calculated in accordance with generally accepted financial practice) from the date of initial issuance by more than 6 months and (B) the Company shall elect to make such adjustment upon (and only upon) the direction of the Owner Trustee in accordance with Section 2(c) of the Participation Agreement. If the Company shall elect to make the foregoing adjustment, the Company shall deliver to the Trustee and LP&L at least 30 days prior to the first payment date proposed to be affected by such adjustment, a Company Request (A) stating that the Company has elected to make a Payment Adjustment as contemplated in this Section, (B) setting forth a revised maturity and Installment Payment Percentage Schedule applicable to the Bonds of each series as to which a Payment Adjustment is to be made, (C) attaching a copy of the revised principal schedule or schedules for the Pledged Lessor Bonds of the corresponding series, and (D) attaching calculations showing that (x) the average life of the Bonds of the affected series will not be reduced or increased except as permitted by this subsection (b), (y) the aggregate principal amount of the Pledged Lessor Bonds identified on Schedule 1 hereto equals the aggregate principal amount of the Bonds and (z) the principal amortization schedules of such Pledged Lessor Bonds are such as to provide funds sufficient to repay in full, as and when due, the principal of the Bonds as and when scheduled to become due, whether upon payment of applicable Installment Payment Amounts on Installment Payment Dates or at Stated Maturity. The Trustee may conclusively rely on such Company Request and shall have no duty with respect to the calculations referred to in the foregoing clause (D), other than to make them available for inspection by any Holder of Bonds at the Corporate Trust Office upon reasonable notice and during business hours. The Trustee shall, at the expense of LP&L, send to each Holder of Bonds of the series in respect of which a Payment Adjustment has been made at least 20 days before the first payment date to be affected thereby, by first class mail, a copy of a schedule of principal amounts of Bonds to be repaid after giving effect to such Payment Adjustment. (ii) In the event that there shall have been any partial redemption of the Bonds of either series (other than pursuant to principal installment payments), each Installment Payment Amount for each Bond of a series subsequent to such redemption shall be reduced by (i) in the case of a partial redemption pursuant to Section 1.05 hereof, an amount equal to the amount obtained by multiplying such Installment Payment Amount as in effect prior to such redemption by a fraction of which the numerator shall be the aggregate principal amount of Bonds of such series redeemed pursuant to such partial redemption, and the denominator shall be the aggregate unpaid principal amount of Bonds of such series Outstanding immediately prior to such redemption and (ii) in the case of a partial redemption pursuant to Section 1.03 hereof, an amount such that the aggregate of all principal installment payments to be made on the Bonds of such series on the relevant Installment Payment Date shall be equal to the amount of principal of the Pledged Lessor Bonds to be paid on such date under the remaining Lease Indenture, any such reduction to be made on a pro rata basis, as nearly as practicable, among the Holders of the Bonds of such series. SECTION 1.03. Redemption upon Lease Termination. If any Lease is to be terminated pursuant to Section 13(f) or (g) or Section 14 thereof, or Section 16(d)(5) of the related Participation Agreement, and all Lessor Bonds issued under the related Lease Indenture are to be prepaid, Bonds, equal in principal amount to the Pledged Lessor Bonds issued under such Lease Indenture shall be redeemed, on the date on which such Lessor Notes are to be prepaid, at a Redemption Price equal to the unpaid principal amount thereof plus accrued interest to the Redemption Date, all subject, however, except in the case of a termination pursuant to Section 14 of such Lease, to the right of LP&L to assume such Lessor Bonds in which event there shall be no redemption of Bonds as a consequence of such termination. SECTION 1.04. Sinking Fund Redemption. There shall be no Sinking Fund for the retirement of the Bonds of either series. SECTION 1.05. Other Redemption. The Bonds of each series shall be subject to redemption, at the option of the Company, in whole at any time or in part from time to time, at the Redemption Price of 100% of the unpaid principal amount of the Bonds to be so redeemed, plus accrued interest, if any, thereon to the Redemption Date, plus, if such redemption is made prior to the applicable Premium Termination Date, the Make-Whole Premium, if any. "Make-Whole Premium" shall mean, with respect to the principal amount of any Bond to be redeemed on any Redemption Date, the amount which the Investment Banker determines as of the third Business Day prior to such Redemption Date to equal the product obtained by multiplying (a) the excess, if any, of (i) the sum of the present values of all the remaining scheduled payments of principal and interest from the Redemption Date to maturity of such Bond, computed on a semi- annual basis by discounting such payments on each January 2 and July 2 at a rate equal to the Treasury Rate, based on a 360-day year of twelve 30-day months, over (ii) the aggregate unpaid principal amount of such Bond plus any accrued but unpaid interest thereon by (b) a fraction the numerator of which shall be the principal amount of such Bond to be redeemed on such Redemption Date and the denominator of which shall be the aggregate unpaid principal amount of such Bond; provided that the aggregate unpaid principal amount of such Bond for the purpose of clauses (a)(ii) and (b) of this definition shall be determined after deducting the principal installment, if any, due on such Redemption Date. "Premium Termination Date" means _________ for a Series __ Bond and _______ for a Series __ Bond. "Investment Banker" shall mean an independent investment banking institution of national standing appointed by LP&L or, if the Trustee does not receive notice of such appointment at least ten days prior to a scheduled Redemption Date or if an event of default under any Lease shall have occurred and be continuing, appointed by the Owner Trustee. "Treasury Rate" shall mean, with respect to each Bond to be redeemed, a per annum rate (expressed as a semiannual equivalent and as a decimal and, in the case of United States Treasury bills, converted to a bond equivalent yield) determined to be the per annum rate equal to the semiannual yield to maturity of United States Treasury securities maturing on the Average Life Date of such Bond, as determined by interpolation between the most recent weekly average yields to maturity for two series of United States Treasury securities (A) one maturing as close as possible to, but earlier than, the Average Life Date of such Bond and (B) the other maturing as close as possible to, but later than, the Average Life Date of such Bond, in each case as published in the most recent H.15(519) (or, if a weekly average yield to maturity for United States Treasury securities maturing on the Average Life Date of such Bond is reported in the most recent H.15(519), as published in H.15(519)). H.15(519) means "Statistical Release H.15(519), Selected Interest Rates," or any successor publication, published by the Board of Governors of the Federal Reserve System. The most recent H.15(519) means the latest H.15(519) which is published prior to the close of business on the third business day prior to the applicable Redemption Date. "Average Life Date" shall mean, with respect to any Bond to be redeemed, the date which follows the redemption date by a period equal to the Remaining Weighted Average Life of such Bond. "Remaining Weighted Average Life" shall mean, with respect to any Bond to be redeemed, the number of days equal to the quotient obtained by dividing (A) the sum of the products obtained by multiplying (1) the amount of each remaining principal payment on such Bond by (2) the number of days from and including the redemption date, to but excluding the scheduled payment date of such principal payment by (B) the unpaid principal amount of such Bond. Section 1.06. Selection by Trustee of Bonds to be Redeemed. Subject to the provisions of subsection (a) and (b) of Section 6.03 of the Original Indenture, if fewer than all of the Bonds of either series are to be redeemed, the particular Bonds of such series to be redeemed shall be selected not more than 45 days prior to the Redemption Date by the Trustee by prorating, as nearly as practicable, the principal amount of such Bonds to be redeemed among the Holders of such Bonds. ARTICLE TWO PLEDGE OF LESSOR BONDS Section 2.01. Pledge of Lessor Bonds. To secure the payment of the principal of and premium, if any, and interest on all the Securities from time to time Outstanding under the Indenture, and the performance of the covenants therein and herein contained, the Company by these presents does grant, bargain, sell, release, convey, assign, transfer, mortgage, hypothecate, pledge, confirm to the Trustee and create a security interest in favor of the Trustee, for the benefit of the Holders, in the Lessor Bonds identified on Schedule 1 hereto (herein referred to as the "Pledged Lessor Bonds"), to be held by the Trustee, in trust, for the uses and purposes, and subject to the covenants and conditions, set forth in the Original Indenture. ARTICLE THREE MISCELLANEOUS SECTION 3.01. Execution as Supplemental Indenture. This Supplemental Indenture No. 1 is executed and shall be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this Supplemental Indenture No. 1 forms a part thereof. SECTION 3.02. Definitions. Capitalized terms used which are not defined herein shall have the meanings ascribed thereto in the Original Indenture. SECTION 3.03. Counterpart Execution. This Supplemental Indenture No. 1 may be executed in any number of counterparts and by each of the parties hereto or thereto on separate counterparts, all such counterparts together constituting but one and the same instrument. SECTION 3.02. Governing Law. This Supplemental Indenture No. 1 is being and will be executed and delivered in the State of New York, shall be deemed to be a contract made in such State and for all purposes shall be construed in accordance with and governed by the laws of the State of New York, except to the extent that laws of other jurisdictions are mandatorily applicable. IN WITNESS WHEREOF, the Company, LP&L and the Trustee have caused this Supplemental Indenture No. 1 to be duly executed as of the day and year first above written. W3A FUNDING CORPORATION By Title: Vice President LOUISIANA POWER & LIGHT COMPANY By Title: Vice President BANKERS TRUST COMPANY, not in its individual capacity but solely as Trustee By Title: Vice President STATE OF NEW YORK ) )ss.: COUNTY OF NEW YORK ) Personally appeared before me, the undersigned authority in and for the said county and state, on this ____ day of ____________, within my jurisdiction, the within named _____________, who acknowledged that he is a Vice President of W3A Funding Corporation, a Delaware corporation, and that for and on behalf of the said corporation, and as its act and deed, he executed the above and foregoing instrument, after first having been duly authorized by said corporation so to do. ___________________________________ Notary Public My Commission Expires: __________________________ STATE OF LOUISIANA ) )ss.: PARISH OF ORLEANS ) Personally appeared before me, the undersigned authority in and for the said parish and state, on this ____ day of _____________, within my jurisdiction, the within named ___________, who acknowledged that he is a ______________________ _________ of LOUISIANA POWER & LIGHT COMPANY, a Louisiana corporation, and that for and on behalf of the said corporation, and as its act and deed, he executed the above and foregoing instrument, after first having been duly authorized by said corporation so to do. ___________________________________ Notary Public My Commission Expires: __________________________ STATE OF NEW YORK ) )ss.: COUNTY OF NEW YORK ) Personally appeared before me, the undersigned authority in and for the said county and state, on this ____ day of ________________, within my jurisdiction, the within named ________________, who acknowledged that he is a Vice President of BANKERS TRUST COMPANY, a New York banking corporation, and that for and on behalf of the said corporation, and as its act and deed, he executed the above and foregoing instrument, after first having been duly authorized by said corporation so to do. ___________________________________ Notary Public My Commission Expires: __________________________ STATE OF NEW YORK ) )ss.: COUNTY OF NEW YORK ) Personally appeared before me, the undersigned authority in and for the said county and state, on this ____ day of _______________, within my jurisdiction, the within named ________________, who acknowledged that he is a Vice President of BANKERS TRUST COMPANY, a New York banking corporation, Trustee under the above and foregoing instrument, and that for and on behalf of the said corporation, and as its act and deed in said capacity as Trustee and its having been duly authorized so to do, he executed the above and foregoing instrument, after first having been duly authorized by said corporation so to do. ___________________________________ Notary Public My Commission Expires: __________________________ SCHEDULE 1 PLEDGED LESSOR BONDS Lessor Bonds Issued Under Lease Indenture No. 1 Principal Interest Series Number Amount Rate Maturity R-1A R-1B Lessor Bonds Issued Under Lease Indenture No. 2 Principal Interest Series Number Amount Rate Maturity R-2A R-2B Lessor Bonds Issued Under Lease Indenture No. 3 Principal Interest Series Number Amount Rate Maturity R-3A R-3B EXHIBIT A FORM OF BOND [FRONT] NUMBER R- ________________________ WATERFORD 3 SECURED LEASE OBLIGATION BOND, % SERIES DUE INTEREST RATE MATURITY DATE CUSIP % REGISTERED HOLDER: ORIGINAL PRINCIPAL AMOUNT: DOLLARS W3A Funding Corporation, a Delaware corporation (hereinafter called 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 the Registered Holder named above, or registered assigns, the unpaid portion of the Original Principal Amount (stated above) in installments on each Installment Payment Date as set forth on the reverse hereof with the final installment due and payable on the Maturity Date (stated above) and to pay interest (computed on the basis of a 360-day year consisting of twelve 30-day months) on the principal amount remaining unpaid from time to time from the most recent interest payment date to which interest has been paid or duly provided for or, if this Bond is dated prior to __________, the date of the original issuance of Bonds of this series, semiannually on __________ and __________ in each year, commencing __________, at the Interest Rate (stated above) per annum, until the principal hereof is paid in full or made available for payment. The interest or Installment Payment Amount so payable shall, as provided in such Indenture, be paid to the person in whose name this Bond (or one or more Predecessor Securities, as defined in such Indenture) is registered at the close of business on the Regular Record Date (all capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Indenture referred to on the reverse hereof) for such interest or installment of principal, which shall be the __________ (with respect to a __________ interest payment date) or __________ (with respect to a __________ interest payment date), as the case may be (whether or not a Business Day), next preceding such interest payment date or Installment Payment Date. Any such interest or Installment Payment Amount not so punctually paid or duly provided for shall forthwith cease to be payable to the Registered Holder on such Regular Record Date, and may be paid to the person in whose name this Bond (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such defaulted interest or defaulted installment to be fixed by the Trustee (as defined on the reverse hereof), notice of which shall be given to the Holders of the Bonds not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Bonds may be listed, and upon such notice as may be required by such exchange, all as more fully provided in such Indenture. Payment of the principal of, and premium, if any, and interest on this Bond shall be made upon presentation and surrender hereof at the Corporate Trust Office of the Trustee in such coin or currency of the United States of America as at the time of payment is legal tender for payment of debts, except that payment of interest and Installment Payment Amounts (other than that payable on the Stated Maturity hereof) shall be made, without presentation or surrender hereof, by check mailed to the address of the Holder entitled thereto as such address shall appear in the Security Register and except that if such Holder shall be a securities depositary, such payment shall be made by such means in lieu of check as shall be agreed upon by LP&L (as hereinafter defined), the Trustee and such Holder. As provided in the Indenture, in any case where any Redemption Date, Installment Payment Date or the Stated Maturity of principal of or any installment of interest on any bond, or any date on which any defaulted interest or principal is proposed to be paid, shall not be a Business Day, then (notwithstanding any other provision of the Indenture or this Bond) payment of interest and/or principal and premium, if any, shall be due and payable on the next succeeding Business Day with the same force and effect as if made on or at such nominal Redemption Date, Stated Maturity, Installment Payment Date or date on which the defaulted interest or principal is proposed to be paid and no interest shall accrue on the amount so payable for the period from and after such Redemption Date, Stated Maturity, Installment Payment Date or date for the payment of defaulted interest or principal, as the case may be. Reference is hereby made to the further provisions of this Bond set forth on the reverse hereof which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Bond shall not be entitled to any benefit under such Indenture, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this Bond to be duly executed under its corporate seal. Dated: W3A FUNDING CORPORATION By Vice President Attest Secretary CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture , as Trustee By Authorized Officer Dated __________________________ [BACK] W3A FUNDING CORPORATION WATERFORD 3 SECURED LEASE OBLIGATION BOND, % SERIES DUE This Bond is one of an authorized issue of Securities of the Company known as its "Secured Lease Obligation Bonds, % Series due " (the "Bonds"). The Bonds are issued under and secured by a Collateral Trust Indenture, dated as of ________ (the "Original Indenture"), among the Company, Louisiana Power & Light Company, a Louisiana corporation ("LP&L"), and Bankers Trust Company, not in its individual capacity but solely as trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), as supplemented by Supplemental Indenture No. 1, dated as of __________, among such parties (together, and as thereafter amended in accordance with its terms, the "Indenture"). The Indenture permits the issuance of additional series of Securities for the purposes and as provided therein. All Bonds are secured equally and ratably with one another and with any other Securities of the Company issued under the Indenture, as amended or supplemented. Reference is hereby made to the Indenture and any supplements or amendments thereto for a description of the nature and extent of the Securities issued thereunder, the property assigned, pledged and transferred thereunder and the respective rights of the Holders of the Bonds and of the Trustee and the Company in respect of such security and the terms upon which the Bonds are and are to be authenticated and delivered. The Holder of this Bond, by its acceptance hereof, is deemed to have consented and agreed to all the terms and provisions of the Indenture. The unpaid principal of and premium, if any, and interest on this Bond are payable from and secured by the assets subject to the lien of the Indenture and the income and proceeds received by the Trustee therefrom and all payments of principal, premium, if any, and interest shall be made in accordance with the terms of the Indenture. The Indenture provides that certain promissory bonds ("Pledged Lessor Bonds") are subject to the lien of the Indenture and that additional Pledged Lessor Bonds, as and when issued, can be made subject to the lien of the Indenture pursuant to Indenture supplements. The Pledged Lessor Bonds subject to the lien of the Indenture on the date of the initial issuance of Bonds were issued by First National Bank of Commerce, as owner trustee under each of Trust Agreement No. 1, Trust Agreement No. 2 and Trust Agreement No. 3 (each, a "Trust Agreement" and, together, the "Trust Agreements"), each such Trust Agreement with the institutional investor party thereto (each such institutional investor, an "Owner Participant"). Such Pledged Lessor Bonds were issued under either Indenture of Mortgage and Deed of Trust No. 1, or Indenture of Mortgage and Deed of Trust No. 2 or Indenture of Mortgage and Deed of Trust No. 3, each such indenture between an owner trustee, as owner trustee and lessor (a "Lessor") and Bankers Trust Company and Stanley Burg, not in their individual capacities but solely as Corporate Indenture Trustee and Individual Indenture Trustee, respectively, (each of such indentures, as it was executed and delivered and as thereafter amended in accordance with its terms, being herein called a "Lease Indenture" and each trustee thereunder being herein called a "Lease Indenture Trustee"). Reference is made to each Lease Indenture for a description of the nature and extent of property assigned, pledged, transferred and mortgaged thereunder and the rights of the holders of Pledged Lessor Bonds. Except as expressly provided in a Lease Indenture, all payments of principal, premium, if any, and interest to be made on a Pledged Lessor Bond issued under such Lease Indenture will be made only from the assets subject to the lien of such Lease Indenture or the income and proceeds received by the Lease Indenture Trustee therefrom, including, in the case of each Lease Indenture, the rights of the Lessor which is a party thereto to receive basic rentals and certain other payments under a Facility Lease with LP&L relating to an undivided interest in certain assets constituting part of Unit No. 3 of the Waterford Steam Electric Generating Station (each of such Facility Leases, as it was executed and delivered and as thereafter amended in accordance with its terms being herein called a "Lease"), which basic rentals and other payments will be at least sufficient to provide for the scheduled payments of the principal of and interest on each Pledged Lessor Note issued under such Lease Indenture. Each Holder of this Bond, by its acceptance hereof, is deemed to have agreed (x) that it will look solely to the assets subject to the lien of the Indenture or the income or proceeds received by the Trustee therefrom, to the extent available for distribution to the Holder hereof as provided in the Indenture, and (y) that none of any Owner Participant, any Lessor, any Lease Indenture Trustee or the Trustee is liable to the Holder hereof or, in the case of any Owner Participant, Lessor or Lease Indenture Trustee, to the Trustee, for any amounts payable on this Bond, or, except as provided in the Indenture with respect to the Trustee, for any liability under the Indenture. With certain exceptions as therein provided, the supplementation of the Indenture for the purpose of adding any provisions thereto, or changing in any manner or eliminating any of the provisions thereof, will require the consent of the Holders of not less than a majority in aggregate unpaid principal amount of all Securities of all series at the time Outstanding under the Indenture considered as one class; provided, however, that if there shall be Securities of more than one series Outstanding under the Indenture and if a proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate unpaid principal amount of the Outstanding Securities of all series so directly affected, considered as one class, shall be required. The Indenture also contains provisions permitting the Holders of not less than a majority in unpaid principal amount of the Securities at the time Outstanding, on behalf of the Holders of all of the Securities, to waive certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Bond shall be conclusive and binding upon such Holder and upon all future Holders of this Bond and of any Bond issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Bond. On each Installment Payment Date set forth below, the Company shall pay an installment of principal of this Bond equal (subject to adjustment as hereinafter described) in amount to the Installment Payment Percentage set forth below for such Installment Payment Date multiplied by the Original Principal Amount stated on the face of this Bond. Installment Installment Outstanding Payment Date Payment Percentage Balance Factor The "Outstanding Balance Factor" as used in the foregoing table is for descriptive purposes only, and, unless there has been a partial redemption or a default or another installment payment adjustment, when multiplied by the Original Principal Amount of this Bond, represents the remaining unpaid principal amount of this Bond as of the Installment Payment Date indicated after payment of the principal installment on such date. As provided in the Indenture, the stated maturity and the amount of installment payments of principal for the Bonds may be adjusted, subject to certain restrictions, at the discretion of the Company in connection with certain recalculations of basic rent pursuant to either of the Leases; provided, however, that no payment adjustment shall be made by the Company which will increase or decrease the average life of the Bonds of any series (calculated in accordance with generally accepted financial practice) from the date of initial issuance by more than 6 months. In the event of any partial redemption of Bonds (other than pursuant to the aforementioned principal installment payments) the amount of each installment payment of principal to be paid thereafter pursuant to the installment payment schedule indicated above and at stated maturity shall be adjusted in accordance with the Indenture. Notwithstanding anything to the contrary set forth herein or in the Indenture, the unpaid principal amount hereof recorded on the Security Register maintained by the Security Registrar shall be controlling as to the remaining unpaid principal amount hereof. If any Lease is to be terminated pursuant to Section 13(f) or (g) or Section 14 thereof, or Section 16(d)(5) of the related Participation Agreement, and all Lessor Bonds issued under the related Lease Indenture are to be prepaid, Bonds, equal in principal amount to the Pledged Lessor Bonds issued under such Lease Indenture, shall be redeemed, on the date on which such Lessor Bonds are to be prepaid, at a redemption price equal to the unpaid principal amount thereof plus accrued interest to the Redemption Date, all subject, however, except in the case of a termination pursuant to Section 14 of such Lease, to the right of LP&L to assume such Lessor Bonds in which event there shall be no redemption of Bonds as a consequence of such termination. The Bonds of this series shall be subject to redemption, at the option of the Owner Trustee, in whole at any time or in part from time to time, at the Redemption Prices of 100% of the unpaid principal amount of such Bonds to be so redeemed, plus accrued interest, if any, thereon to the date fixed for redemption, plus the Make-Whole Premium, if any, for the Bonds calculated as provided in the Indenture. In the event that any of the Bonds are called for redemption, notice shall be given to the Holders in accordance with Section 6.04 of the Original Indenture not less than 20 nor more than 60 days prior to the redemption date. With respect to any notice of redemption of Bonds (and not with respect to installment payments of principal payable on Installment Payment Dates) unless, upon the giving of such notice, such Bonds shall be deemed to have been paid in accordance with the provisions of the Indenture, such notice shall state that such redemption shall be conditional upon the receipt by the Trustee, on or prior to the date fixed for such redemption, of money sufficient to pay the principal of and premium, if any, and interest on such Bonds and that if such money shall not have been so received such notice shall be of no force or effect and the Company shall not be required to redeem such Securities. In the event that such notice of redemption contains such a condition and such money is not so received, the redemption shall not be made. Bonds (or portions thereof as aforesaid) for which redemption and payment provision is made in accordance with the Indenture shall thereupon cease to be entitled to the lien of the Indenture and shall cease to bear interest from and after the date fixed for redemption. If an Event of Default shall occur, the unpaid principal of this Bond may become or be declared due and payable in the manner and with the effect provided in the Indenture. This Bond is transferable by the Holder hereof in person or by attorney authorized in writing, at the Corporate Trust Office of the Security Registrar (or if such office is not in the Borough of Manhattan, The City of New York, at either such office or an office to be maintained in such Borough). Upon surrender for registration of transfer of this Bond, the Company shall execute, and the Trustee (or any Authenticating Agent) shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of the same series, of authorized denominations and of like tenor and aggregate principal amount. The Bonds are issuable only as registered Bonds without coupons in denominations of $1,000 and/or any integral multiple thereof. As provided in and subject to the provisions of the Indenture, Bonds may be exchanged for other Bonds of the same series, of authorized denominations, and of like tenor and aggregate principal amount, upon surrender at any office maintained for such purpose pursuant to the Indenture. No service charge will be made to any Holder of Bonds for any such transfer or exchange but the Security Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The person in whose name this Bond is registered shall be deemed to be the owner hereof for the purpose of receiving payment as herein provided and for all other purposes whether or not this Bond be overdue, regardless of any notice to anyone to the contrary. As provided in the Indenture, the Indenture and the Bonds shall be construed in accordance with and governed by the laws of the State of New York. EX-4 5 Exhibit 4(d)-4 SUPPLEMENTAL INDENTURE NO. 2 dated as of _______ __, 199_ to INDENTURE OF MORTGAGE AND DEED OF TRUST NO. [2/3]* dated as of September 1, 1989, as supplemented, between FIRST NATIONAL BANK OF COMMERCE, not in its individual capacity but solely as Owner Trustee under Trust Agreement No. [2/3], dated as of September 1, 1989, with the Owner Participant, and BANKERS TRUST COMPANY, as successor Corporate Indenture Trustee, and STANLEY BURG, as successor Individual Indenture Trustee Original Indenture Recorded On September 27, 1989 in Book No. _____, Page ____ as Entry No. _____ in the Conveyance Records of St. Charles Parish, Louisiana _______________________________ * Assumes that current indenture trustees under Indentures of Mortgage and Deeds of Trust Nos. 2 and 3 will be replaced by Bankers Trust Co. and S. Burg, which henceforth would act as sole indenture trustee under all three original indentures. Supplemental Indenture No. 2 to original indenture no. 1 would be substantially identical to this form, except that the existing trustee and co-trustee (Bankers Trust Co. and S. Burg) would continue. Supplemental Indenture No. 2, dated as of ________ __, 199_, to Indenture of Mortgage and Deed of Trust No. [2/3], dated as of September 1, 1989 (the "Original Indenture"; the Original Indenture, as supplemented by Supplemental Indenture No. 1, dated as of September 1, 1989, and by this Supplemental Indenture No. 2, and as it may be further supplemented or amended from time to time by all other indentures supplemental thereto, being hereinafter referred to as the "Indenture"), between First National Bank of Commerce, a national banking association having its principal office and mailing address at 210 Baronne Street, New Orleans, Louisiana 70112, not in its individual capacity, except as otherwise expressly provided in the Indenture, but solely as the Owner Trustee (such term and all other capitalized terms used herein and not defined herein having the respective meanings specified in Appendix A to the Original Indenture as modified by Schedule A-1 thereto, a copy of which Schedule A-1 being attached hereto as Exhibit C), Bankers Trust Company, a New York banking corporation, as successor in interest under the Indenture to [First Trust Company of California, National Association, as successor Corporate Indenture Trustee to Bankers Trust Company of California, National Association/BankAmerica National Trust Company (formerly Security Pacific National Trust Company (New York))/] (the "Corporate Indenture Trustee" and, for all purposes of the Indenture except as may be required pursuant to Section 7.03(c) of the Original Indenture, the "Indenture Trustee"), and Stanley Burg, as successor in interest under the Indenture to [Lisa D. Jones, as successor Individual Indenture Trustee to Cecil D. Bobey/Ralph A. Marinello, as successor Individual Indenture Trustee to Kenneth T. McGraw] (the "Individual Indenture Trustee" and, solely as may be required pursuant to Section 7.03(c) of the Original Indenture, the "Indenture Trustee"), each having its principal office and mailing address at Four Albany Street, New York, New York 10006, Attention: Corporate Trust and Agency_Public Utilities Group. WITNESSETH: Whereas, the Owner Trustee and the Lessee executed and delivered to the Indenture Trustee the Original Indenture and Supplemental Indenture No. 1 pursuant to which the Owner Trustee issued the Initial Series Bonds; Whereas, Section 1.03 of Supplemental Indenture No. 1 provides that the Initial Series Bonds may be subject to redemption, on and after July 2, 1994, at the option of the Owner Trustee, in whole at any time or in part from time to time, at the Redemption Prices set forth therein; Whereas, the original Indenture Trustee and the successor Indenture Trustee have executed and delivered, and the Owner Trustee and the Lessee have acknowledged and accepted, an instrument in substantially the form of Exhibit B hereto, under which the original Indenture Trustee has resigned its appointment as Indenture Trustee and the successor Indenture Trustee has accepted its appointment as successor Indenture Trustee, effective upon the effectiveness of this Supplemental Indenture No. 2; Whereas, the Owner Trustee desires to issue Additional Bonds to or upon the order of Funding Corporation as an integral step in the refunding of the Initial Series Bonds and to enter into this Supplemental Indenture No. 2 to establish the terms, conditions, designations and forms of such Additional Bonds; Whereas, the parties hereto further desire to enter into this Supplemental Indenture No. 2 in order to evidence the succession of the new Indenture Trustee and to amend the Indenture in a number of respects in light of the execution and delivery of the Collateral Trust Indenture and the issuance by Funding Corporation of Collateral Bonds in connection with the refunding of the Initial Series Bonds; Whereas, Section 10.01 of the Original Indenture provides that, without the consent of the Holders of any Bonds, the parties thereto at any time and from time to time may enter into one or more supplements to the Original Indenture in order to establish the form and terms of Bonds of any series permitted by Sections 2.01 and 2.04 of the Original Indenture, to evidence the succession of a new trustee or co-trustee under the Indenture, and (subject to the limitations provided therein) to change or eliminate any provision of the Indenture; Whereas, all action on the part of the Owner Trustee necessary to authorize the execution and delivery of this Supplemental Indenture No. 2 and the issuance of the aforesaid Bonds has been duly taken; and Whereas, all acts and things necessary (x) to make the Bonds of the series herein created and established, when executed by the Owner Trustee and authenticated and delivered by the Indenture Trustee as provided in the Original Indenture, the legal, valid and binding obligations of the Owner Trustee and (y) to constitute these presents a valid and binding supplemental indenture and agreement according to its terms have been done and performed, and the execution of this Supplemental Indenture No. 2 and the creation and issuance under the Indenture of such Bonds have in all respects been duly authorized; Now, Therefore, in order to establish the form and terms, and to authorize the authentication and delivery, of the Bonds of the series herein created and established, and in consideration of the premises, of the purchase of such Bonds by the Holders thereof and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Owner Trustee covenants and agrees with the Indenture Trustee, for the equal and proportionate benefit of the respective Holders from time to time of the Bonds, as follows: ARTICLE ONE Amendments to Indenture Section 1.01. Amendments. (a) The Indenture is hereby amended by deleting the Lessee as a party thereto and the "Reconciliation and Tie" included therewith. The Indenture is hereby further amended in the following respects: (b) Article One is amended as follows: (1) Section 1.01 is deleted and the following inserted in lieu thereof: "Section 1.01. Definitions. For all purposes of this Indenture, except as otherwise expressly provided herein or unless the context otherwise requires: (a) capitalized terms used herein and not defined herein have the respective meanings specified in Appendix A hereto as modified by Schedule A-1 thereto, and the rules of construction specified in such Appendix are applicable to this Indenture; and (b) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles." (2) Paragraph (a) of Section 1.04 is deleted and the following inserted in lieu thereof: "(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders shall be embodied in and evidenced by one or more instruments of substantially similar tenor, signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee and, where it is hereby expressly required, to the Owner Trustee and the Lessee. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and, subject to Section 8.01, conclusive in favor of the Indenture Trustee, the Owner Trustee and the Lessee." (3) Section 1.05 is deleted and the following inserted in lieu thereof: "Section 1.05. Notices, etc. to Indenture Trustee, Lessee, Owner Trustee and Owner Participant. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with: (a) the Indenture Trustee by any Holder, by the Owner Trustee or by the Lessee shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage prepaid, to the Indenture Trustee addressed to it at the address of the Corporate Trust Office; or (b) the Owner Trustee by the Indenture Trustee, by any Holder or by the Lessee shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage prepaid, to the Owner Trustee addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Indenture Trustee and the Lessee by the Owner Trustee for such purpose; or (c) the Lessee by the Indenture Trustee, by any Holder or by the Owner Trustee shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage prepaid, to the Lessee addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Indenture Trustee and the Owner Trustee by the Lessee for such purpose; or (d) the Owner Participant by the Indenture Trustee, by any Holder or by the Lessee shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage prepaid, to the Owner Participant addressed to it at its address specified in Section 17 of the Participation Agreement or at any other address previously furnished in writing to the Lessee or the Indenture Trustee for such purpose." (4) The text of Section 1.07 is deleted and the caption "[Reserved]" is inserted in lieu of the existing caption, "Conflict with Trust Indenture Act." (5) Section 1.13 is deleted and the following inserted in lieu thereof: "Section 1.13. Legal Holidays. In the event that any payment to be made hereunder or in respect of the Bonds of any series is stated to be due on a day that is not a Business Day, then such payment shall be due and payable on the next succeeding Business Day with the same force and effect as if made on the date on which such payment was stated to be due, and no interest shall accrue for the period from and after such stated due date." (c) Article Two is amended as follows: (1) Paragraph (b) of Section 2.02 is deleted and the following inserted in lieu thereof: "(b) No Bond shall be secured by or entitled to any benefit under this Indenture or be valid or obligatory for any purpose hereunder unless there appears on such Bond a certificate of authentication, substantially in the form provided above, executed manually by the Indenture Trustee by an Authorized Officer thereof, and such certificate upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has been duly authenticated and delivered hereunder." (2) Section 2.04(b) is deleted and the following inserted in lieu thereof: "(b) The Bonds may be issued in one or more series. The terms, conditions, designations and forms of the Bonds of any series shall be consistent with the provisions of this Indenture and shall be established in the Series Supplemental Indenture creating the Bonds of such series." (3) Section 2.05(a)(3) is amended by deleting the text "(or, if applicable, the Authenticating Agent)" from clause (A) thereof. (4) Section 2.06 is deleted and the following inserted in lieu thereof: "Section 2.06. Form and Denominations. The Bonds of any series shall be issued only in fully registered form and in denominations of original principal amount of $500,000 or greater, unless otherwise provided in the Series Supplemental Indenture creating the Bonds of such series." (5) Section 2.08 is deleted and the following inserted in lieu thereof: "Section 2.08. Restrictions on Transfer Resulting from Federal Securities Laws and ERISA; Legend. (a) If not prohibited by the Securities Act, each Bond of any series shall be delivered to the initial Holder thereof without registration of such Bond under the Securities Act and without qualification of this Indenture under the Trust Indenture Act. Prior to any transfer of any such Bond, in whole or in part, to any Person other than the Collateral Trust Trustee, the Holder thereof shall furnish to the Lessee, the Indenture Trustee, the Owner Participant and the Owner Trustee either (i) a written representation and warranty of such Holder to the effect that the transferee of such Bond and all Persons to which such Bond shall have been offered are "accredited investors" or "qualified institutional buyers" within the meaning of Regulation D or Rule 144A, respectively (or, in each case, any successor thereto) under the Securities Act, or (ii) an opinion of counsel to the effect that such transfer will not violate the registration requirements of the Securities Act or require the qualification of this Indenture under the Trust Indenture Act. Such written representation and warranty and opinion of counsel, as well as counsel rendering any such opinion, shall be reasonably satisfactory to the Lessee, the Indenture Trustee, the Owner Participant and the Owner Trustee. All Bonds issued hereunder from time to time without registration thereof under the Securities Act shall in each case be endorsed with a legend reading substantially as follows: This Bond has not been registered under the Securities Act of 1933, as amended, and may not be transferred, sold or offered for sale in violation of such Act. (b) Prior to any transfer, in whole or in part, of any Bond issued hereunder without registration thereof under the Securities Act to any Person other than the Collateral Trust Trustee, the Holder thereof shall furnish to the Lessee, the Indenture Trustee, the Owner Participant and the Owner Trustee a written representation and warranty to the effect that neither the transfer of such Bond to, nor the ownership of such Bond by, such transferee will cause such transferee, or any such Person, to be engaged in a "prohibited transaction", as defined in section 406 of ERISA or section 4975 of the Code, which is not at such time subject to an exemption contained in ERISA or in the rules, regulations, releases or bulletins adopted thereunder." (6) Section 2.09 is deleted and the following inserted in lieu thereof: "Section 2.09. Registration, Transfer and Exchange. (a) The Indenture Trustee on behalf of the Owner Trustee shall maintain at the Corporate Trust Office a register ("Bond Register") for the purpose of registration, and registration of transfer and exchange, of the Bonds by series in which shall be entered the names and addresses of the owners of such Bonds and the principal amounts and serial or other identifying numbers of the Bonds owned by such Persons. Unless otherwise provided in respect of the Bonds of a particular series, the Indenture Trustee is hereby appointed transfer agent and registrar for the Bonds of all series. (b) A Holder of a Bond intending to register the transfer of any Outstanding Bond held by such Holder (including any transfer in the form of a pledge or assignment) or to exchange any Outstanding Bond held by such Holder for a new Bond or Bonds of the same series shall surrender such Outstanding Bond at the Corporate Trust Office, duly endorsed and accompanied by the written request of such Holder or of its attorney duly authorized in writing (in each case with signatures guaranteed) in form and substance reasonably satisfactory to the Indenture Trustee, for the registration of such Bond in the name of any transferee (including any pledgee or assignee in the case of a transfer in the form of a pledge or assignment) or for the issuance of a new Bond or Bonds of the same series, specifying the authorized denomination or denominations of any new Bond or Bonds to be issued and the name and address and taxpayer identification number of the Person or Persons in whose name or names the Bond or Bonds are to be registered (either as pledgee or assignee or as owner). Promptly upon receipt by the Indenture Trustee of the foregoing and satisfaction of the requirements of paragraph (d) hereof and Section 2.08, the Indenture Trustee shall register such Bond or Bonds in the name or names of the Person or Persons specified in the written request and, if a new Bond or Bonds are to be issued, the Owner Trustee shall execute and the Indenture Trustee shall authenticate and deliver such new Bond or Bonds of the same series, in the same aggregate principal amount and dated the same date as the Outstanding Bond surrendered, in the authorized denomination or denominations specified in the written request. The Indenture Trustee shall make a notation on each new Bond of the amount of all payments of principal theretofore made on the predecessor Bond or Bonds and the date to which interest on such predecessor Bond or Bonds has been paid. (c) Except as otherwise specified in the Series Supplemental Indenture creating the Bonds of a particular series, the Indenture Trustee shall not be required to register transfers or exchanges of the Bonds of any series on any date fixed for the payment of principal of or interest on the Bonds of such series or during the fifteen days preceding any such date. (d) As a condition to registration of transfer or exchange of any Bond, the Indenture Trustee and the Owner Trustee may charge the Holder thereof for any stamp taxes or governmental charges required to be paid with respect to such registration of transfer or exchange. (e) All Bonds issued upon any registration of transfer or exchange of Bonds shall be the valid obligations of the Owner Trustee evidencing the same debt, and entitled to the same security and benefits under this Indenture, as the Bonds surrendered upon such registration of transfer or exchange. (f) All Bonds surrendered to the Indenture Trustee for registration of transfer or exchange or for payment in full (whether at the scheduled final maturity thereof, upon redemption or otherwise) shall be canceled by it; and no Bonds shall be issued in lieu thereof except as expressly permitted hereunder. Subject to any Applicable Law to the contrary, the Indenture Trustee shall destroy canceled Bonds held by it in accordance with its customary practices in effect from time to time and deliver a certificate of destruction to the Owner Trustee. If the Owner Trustee shall acquire any of the Bonds, such acquisition shall not operate as a redemption of or the satisfaction of the indebtedness represented by such Bonds unless and until the same shall be delivered to the Indenture Trustee for cancellation. (g) The Bond Register shall at all reasonable times be open for inspection by any Holder. Upon receipt of a written request by any Holder, by the Owner Trustee or by the Lessee, the Indenture Trustee shall furnish such Person, at its expense, with a list of the names and addresses of all Holders entered on the Bond Register, indicating the series, principal amount and serial or other identifying number of each Bond held by each such Holder." (7) Paragraphs (a) and (b) of Section 2.10 are deleted and the following inserted in lieu thereof: "(a) If (i) any mutilated Bond is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Bond, and (ii) there is delivered to the Indenture Trustee evidence to its satisfaction of the ownership and authenticity thereof, and such security or indemnity as may be required by it to save it and the Owner Trustee harmless (provided, however, that if the Holder of such Bond is the Collateral Trust Trustee, the unsecured written undertaking thereof, in its individual capacity, to indemnify the Indenture Trustee and the Owner Trustee shall constitute sufficient security and indemnity for such purposes), then, in the absence of notice to the Indenture Trustee that such Bond has been acquired by a bona fide purchaser, the Owner Trustee shall execute and the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond of the same series, in the same original principal amount and bearing an identification number not contemporaneously outstanding. The Indenture Trustee shall make a notation on each such new Bond of (i) the aggregate amount of all payments of principal theretofore made on the Bond so mutilated, destroyed, lost or stolen and (ii) the date to which interest on such predecessor Bond has been paid. (b) [Reserved]" (8) Section 2.11 is deleted and the following inserted in lieu thereof: "Section 2.11. Payments. Except as otherwise specified in the Series Supplemental Indenture creating the Bonds of a particular series, the principal of and premium, if any, and interest on each Bond shall be payable at the Corporate Trust Office in immediately available funds in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts; provided, however, that if so requested in writing by the Holder of any Bond, all amounts (other than the final payment) payable with respect to such obligation shall be paid by crediting the amount to be distributed to such Holder to an account maintained by it with the Indenture Trustee or by the Indenture Trustee transferring such amount by wire transfer of immediately available funds as soon as practicable but in any event no later than the close of business on the date of receipt (assuming the Indenture Trustee has received such funds prior to 1:00 p.m., New York City time, on the same day) to such other bank in the United States having an account with a Federal Reserve Bank, as shall have been specified in such notice, for credit to the account of such Holder maintained at such bank, any such credit or transfer pursuant to this Section to be in immediately available funds, without any presentment or surrender of such Bond; provided further, however, that any final payment on any such Bond shall be made only against presentment and surrender thereof at the Corporate Trust Office." (9) The text of Section 2.12 following the caption "Persons Deemed Owners" is deleted and the following inserted in lieu thereof: "The Owner Trustee and the Indenture Trustee shall deem the Person in whose name any Bond is registered in the Bond Register as the absolute owner of such Bond for the purpose of receiving payment of all amounts payable with respect to such Bond and for all other purposes, and neither the Owner Trustee nor the Indenture Trustee shall be affected by any notice to the contrary." (10) The following section is added to the end of Article Two: "Section 2.17. Certain Adjustments to Sinking Fund or Amortization Schedules. The sinking fund or principal amortization schedules, as the case may be, and stated maturity of the Outstanding Bonds of any series may be adjusted at the discretion of the Owner Trustee under the circumstances and subject to the conditions set forth in paragraphs (b) and (c) of Section 2 of the Participation Agreement; provided, however, that no such adjustment to the sinking fund or the principal amortization schedules or stated maturity of the Outstanding Bonds of any series shall (x) cause the average life of the Bonds of such series (measured from the date of initial issuance thereof and calculated in accordance with generally accepted financial practice) to be decreased or increased by more than six months, or (y) extend the final maturity of the Bonds of such series. If it elects to make such an adjustment, the Owner Trustee shall deliver to the Indenture Trustee and the Lessee, at least 30 days prior to the first payment date proposed to be affected by such adjustment, an Officers' Certificate of the Owner Trustee, prepared by the Owner Participant and the Lessee, (x) stating that the Owner Trustee has elected to make such adjustment, (y) attaching the revised payment schedules for each of the Outstanding Bonds, and (z) attaching calculations showing that the average life of the Outstanding Bonds of the series affected thereby shall not be decreased or increased except as permitted by this Section. The Indenture Trustee may conclusively rely on such Owner Trustee certificate and shall have no duty with respect to the calculations referred to in the foregoing clause (z), other than to make such Owner Trustee's certificate available for inspection by each Holder of Outstanding Bonds of the series affected thereby at the Corporate Trust Office upon reasonable notice. Promptly after receipt of such Owner Trustee certificate, and in any event at least twenty (20) days prior to the first payment date proposed to be affected thereby, the Indenture Trustee shall send to each Holder of Outstanding Bonds of the series affected thereby, in the manner provided in Section 1.06, a copy of a revised payment schedule for such Bond after giving effect to such adjustment." (d) Article Three is amended as follows: (1) The following is added to the end of paragraph (d) of Section 3.01: "; provided, however, that if the Indenture Trustee has been directed by any Holder or Holders to make payments by wire transfer pursuant to Section 2.11, any amounts received by the Indenture Trustee after 1:00 p.m., New York City time, may be distributed on the following Business Day." (2) The following new section is added to Article Three: "Section 3.08. Application of Payments. In the case of each Bond, each payment on account of principal thereof or interest thereon or premium, if any, with respect thereto shall be applied: first, to the payment of accrued but unpaid interest (including interest on overdue principal and, to the extent permitted by law, on overdue interest) on such Bond to the date of such payment; second, to the payment of the premium, if any, due with respect to such Bond; third, to the payment of the principal amount of such Bond then due and payable other than by virtue of acceleration; and fourth, the balance remaining, if any, to the payment of the principal amount of such Bond remaining unpaid. The amounts paid pursuant to the preceding clause "fourth" shall be applied to the installments of principal of such Bond in the reverse order of their normal maturity." (e) Article Four is amended as follows: (1) Section 4.03 is amended in the following respects: (A) The reference in the first sentence of paragraph (a) to "or with any Paying Agent" is deleted; (B) paragraph (b) is deleted; and (C) paragraph (c) is deleted and the following inserted in lieu thereof: "(b) [Reserved]" (c) Any money deposited with the Indenture Trustee in trust for the payment of the principal of, and premium, if any, and interest on, any Bond and remaining unclaimed for three years (or such lesser period as may be required by law to give effect to this provision) after such principal, premium, if any, or interest has become due and payable shall be paid to the Owner Trustee on Owner Trustee Request (to the extent such moneys shall have been deposited by the Owner Trustee) or to any other Person on its written request (to the extent such moneys shall have been deposited by such other Person); and the Holder of such Bond shall thereafter, as an unsecured general creditor, look only to the Owner Trustee or such other Person, for payment thereof, and all liability of the Indenture Trustee with respect to such money shall thereupon be discharged." (2) Section 4.04 is deleted and the following inserted in lieu thereof: "Section 4.04 [Reserved]" (3) Paragraph (a) of Section 4.06 is deleted and the following inserted in lieu thereof: "(a) Pursuant to Section 9(b)(2) of the Participation Agreement, the Lessee has covenanted to maintain the priority of the Lien created by this Indenture. The Indenture Trustee shall, at the request and expense of the Lessee as provided in the Participation Agreement (and upon receipt of the form of document so to be executed), execute and deliver to the Lessee and the Lessee shall file, if not already filed, such financing statements or other documents and such continuation statements or other documents with respect to financing statements or other documents previously filed relating to the Lien created by this Indenture as may be necessary to protect, perfect and preserve such Lien. At any time and from time to time, upon the request of the Lessee or the Indenture Trustee, at the expense of the Lessee as provided in the Participation Agreement (and upon receipt of the form of document so to be executed), the Owner Trustee shall promptly and duly execute and deliver any and all such further instruments and documents as the Lessee or the Indenture Trustee may reasonably request in order for the Indenture Trustee to obtain the full benefits of the Lien created or intended to be created hereby and of the rights and powers herein granted. Upon the reasonable instructions (which instructions shall be accompanied by the form of document to be filed) at any time and from time to time of the Lessee or the Indenture Trustee, the Owner Trustee shall execute and file any financing statement (and any continuation statement with respect to any such financing statement), any certificate of title or any other document, in each case relating to the Liens created by this Indenture, as may be specified in such instructions. In addition, the Indenture Trustee and the Owner Trustee shall execute such continuation statements with respect to financing statements and other documents relating to the Lien created by this Indenture as may be reasonably specified from time to time in written instructions of any Holder (which instructions may, by their terms, be operative only at a future date and which shall be accompanied by the form of such continuation statement or other document so to be filed)." (4) Section 4.09 is deleted and the following inserted in lieu thereof: "Section 4.09. Notices of Default. The Owner Trustee shall give to the Indenture Trustee, promptly after having obtained knowledge thereof, notice in the manner provided in Section 1.05 of any Indenture Default or Indenture Event of Default." (5) The first eight words of Section 4.10 following the caption "Performance of Obligations" are deleted and the following inserted in lieu thereof: "The Owner Trustee shall not" (6) Section 4.12 is deleted and the following inserted in lieu thereof: "Section 4.12 [Reserved]" (f) Article Five is amended as follows: (1) The following is added to the end of Section 5.01: "This Article does not apply to installment payments of principal of the Bonds of any series as contemplated in Section 6.03." (2) Subparagraph (5) of Section 5.05(b) is deleted and the following inserted in lieu thereof: "(5) if such Bonds are to be redeemed in full, the place or places where such Bonds are to be surrendered for payment of the Redemption Price, and" (3) The second sentence of Section 5.06 is deleted and the following inserted in lieu thereof: "Upon surrender of any such Bond for redemption in accordance with such notice, such Bond or portion thereof shall be paid at the Redemption Price, together with accrued interest, if any, to the Redemption Date." (4) Section 5.07 is deleted and the following inserted in lieu thereof: "Section 5.07. Bonds Redeemed in Part. Any Bond which is to be redeemed only in part may be surrendered at the Corporate Trust Office (with, if the Owner Trustee or Indenture Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Owner Trustee and the Indenture Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Lessee shall cause to be prepared, the Owner Trustee shall execute, and the Indenture Trustee shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond or Bonds of the same series, in any authorized denomination requested by such Holder and in an aggregate unpaid principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered." (g) Article Six is deleted and the following inserted in lieu thereof: "ARTICLE SIX Sinking Funds; Installment Payments Section 6.01. Applicability of Article. The provisions of this Article shall apply (x) to any sinking fund established for the retirement of the Bonds of a particular series and (y) to the Bonds of any series the principal of which is subject to amortization in installments. Section 6.02. Sinking Funds. (a) Any Series Supplemental Indenture may provide for a sinking fund for the retirement of the Bonds of the series created thereby (a "Sinking Fund"), in accordance with which the Owner Trustee shall be required to redeem on the respective dates specified in or pursuant to such Series Supplemental Indenture (any such date, a "Sinking Fund Redemption Date") corresponding principal amounts of the Bonds of such series (any such corresponding amount, a "Sinking Fund Requirement"). (b) If there shall have been a redemption, otherwise than pursuant to a Sinking Fund, of less than all the Bonds of a series to which a Sinking Fund is applicable (such redeemed Bonds being hereinafter called the "Redeemed Bonds"), the Sinking Fund Requirements applicable to the Bonds of such series for each Sinking Fund Redemption Date thereafter shall be deemed to have been satisfied to the extent of an amount equal to the quotient resulting from the division of (1) the product of (A) the principal amount of the Redeemed Bonds and (B) such Sinking Fund Requirement by (2) the sum of (C) the aggregate principal amount of Bonds of such series then Outstanding (after giving effect to such redemption) and (D) the principal amount of such Redeemed Bonds; provided, however, that the remaining Sinking Fund Requirements determined as set forth in this paragraph shall be rounded to the nearest integral multiple of $1,000, subject to further necessary adjustment so that the aggregate principal amount of such satisfaction of Sinking Fund Requirements shall be equal to the aggregate principal amount of such Redeemed Bonds, such adjustment to such Sinking Fund Requirements to be made in the inverse order of the respective Sinking Fund Redemption Dates corresponding thereto. (c) Particular Bonds to be redeemed pursuant to a Sinking Fund shall be selected in the manner provided in Section 5.04, and notice of such redemption shall be given in the manner provided in Section 5.05. Section 6.03. Installment Payments. (a) Any Series Supplemental Indenture may provide for the amortization of the principal amount of the Bonds of the series created thereby through installment payments of the principal of each Bond of such series, in accordance with which the Owner Trustee shall be required to pay on the respective dates specified in or pursuant to such Series Supplemental Indenture (any such date, an "Amortization Date") corresponding installments of principal of each Bond of such series (any such installment payment of principal, an "Amortization Requirement"). (b) If there shall have been a redemption (any installment payment pursuant to this Section 6.03 not being considered for such purpose a redemption) of less than all the Bonds of a series subject to installment payments as contemplated in this Section (such redeemed Bonds being hereinafter called the "Redeemed Bonds"), the Amortization Requirements applicable to the Bonds of such series for each Amortization Date thereafter shall be deemed to have been satisfied to the extent of an amount equal to the quotient resulting from the division of (1) the product of (A) the principal amount of the Redeemed Bonds and (B) such Amortization Requirement by (2) the sum of (C) the aggregate principal amount of Bonds of such series then Outstanding (after giving effect to such redemption) and (D) the principal amount of the Redeemed Bonds; provided, however, that the remaining Amortization Requirements determined as set forth in this paragraph shall be rounded to the nearest integral multiple of $1,000, subject to further necessary adjustment so that the aggregate principal amount of such satisfaction of Amortization Requirements shall be equal to the aggregate principal amount of such Redeemed Bonds, such adjustment to such Amortization Requirements to be made in the inverse order of the respective Amortization Dates corresponding thereto. In connection with any such adjustments to the Amortization Requirements, the Owner Trustee shall deliver to the Indenture Trustee, not later than 30 days prior to the next Amortization Date following such partial redemption, a revised schedule, prepared by the Lessee and approved by the Owner Participant, setting forth the Amortization Requirements for the Bonds commencing with the first Amortization Date following such partial redemption. The Indenture Trustee may conclusively rely on such revised schedule and shall have no duty with respect to the adjustments set forth therein, other than to make such revised schedule available for inspection by the Holders of the Bonds affected thereby." (h) Article Eight is amended as follows: (1) Section 8.01 is deleted and the following inserted in lieu thereof: "Section 8.01. Certain Duties and Responsibilities; Standard of Care. (a) The Indenture Trustee shall perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee. No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers hereunder, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (b) The Indenture Trustee shall not be liable hereunder except for its own willful misconduct or gross negligence. The foregoing notwithstanding, if an Indenture Event of Default has occurred and is continuing, the Indenture Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (c) In the absence of bad faith on its part: (1) the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture; provided, however, that in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Indenture Trustee, the Indenture Trustee shall be under a duty to examine the same to determine whether they conform to the requirements of this Indenture; and (2) the Indenture Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a majority in aggregate principal amount of the Outstanding Bonds of all series, considered as one class, relating to (A) the time, method and place of conducting any proceeding for any remedy available to the Indenture Trustee under this Indenture or (B) the exercise by it of any trust or power conferred upon it under this Indenture. (d) Whether or not herein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording protection to, the Indenture Trustee shall be subject to the provisions of this Section." (2) Section 8.03 following the caption "Certain Rights of Indenture Trustee" is deleted and the following inserted in lieu thereof: "Except as otherwise provided in Section 8.01: (a) the Indenture Trustee may rely and shall be protected in acting or refraining from acting in reliance upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Owner Trustee mentioned herein shall be sufficiently evidenced by an Owner Trustee Request or Owner Trustee Order and any request of the Lessee shall be sufficiently evidenced by a Lessee Request or Lessee Order; (c) whenever in the administration of this Indenture the Indenture Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Indenture Trustee (unless other evidence be herein specifically prescribed) shall be entitled to reserve and may, in the absence of bad faith on its part, rely upon an Officers' Certificate of the Owner Trustee; (d) the Indenture Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Indenture Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, except to the extent that such Holders shall have offered to the Indenture Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; provided, however, that if the Holder of such Bonds is the Collateral Trust Trustee, the unsecured written undertaking thereof, in its individual capacity, to indemnify the Indenture Trustee shall constitute sufficient security and indemnity for such purposes; (f) the Indenture Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Indenture Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Indenture Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Owner Trustee, personally or by agent or attorney; (g) the Indenture Trustee may at any time request written instructions from the Holders of the Bonds with respect to any interpretation of this Indenture or any action to be taken or not to be taken hereunder and, except as otherwise contemplated in Section 2.11, may withhold any action under this Indenture until it shall have received such written instructions from the Holders of a majority in aggregate principal amount of the Outstanding Bonds of all series, considered as one class, evidenced by an Act of such Holders; (h) the Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or, by or through agents or attorneys appointed by it in writing and acceptable to the Owner Trustee and the Lessee, indirectly, and the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of any such authorized agent or attorney appointed with due care by it and as otherwise hereinabove provided; (i) the Indenture Trustee shall not be personally liable, in the case of entry by it upon the Indenture Estate, for debts, contracts or liabilities or damages incurred in the management or operation of the Indenture Estate; and (j) for all purposes of this Indenture, the Indenture Trustee shall not be deemed to have knowledge of the occurrence of any Indenture Default or Indenture Event of Default unless either (1) notice thereof shall have been given to the Indenture Trustee in the manner provided in Section 1.05 or (2) a Responsible Officer of the Corporate Indenture Trustee shall have actual knowledge of the occurrence thereof; provided, however, that the Indenture Trustee shall be deemed to have knowledge of any failure of the Lessee to pay any installment of Basic Rent within five Business Days after the same has become due." (3) The text of Section 8.05 following the caption "Indenture Trustee and Authorized Agents May Hold Bonds" is deleted and the following inserted in lieu thereof: "The Indenture Trustee and any agent appointed by the Indenture Trustee or Owner Trustee in accordance with this Indenture, in its individual or any other capacity, may become the owner or pledgee of Bonds and, subject to Sections 8.08 and 8.13, may otherwise deal with the Owner Trustee with the same rights it would have if it were not Indenture Trustee or such agent." (4) Section 8.06 is amended in the following respects: (A) the reference in the caption to "or Paying Agent" is deleted; (B) the respective references in paragraph (a) to "or the Paying Agent" and "nor the Paying Agent" are deleted; and (C) the reference in paragraph (b) to "or the Paying Agent" is deleted. (5) Section 8.07 is deleted and the following inserted in lieu thereof: "Section 8.07. Compensation and Reimbursement. (a) The Owner Trustee shall: (1) pay, or cause to be paid, to the Indenture Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) reimburse, or cause to be reimbursed, the Indenture Trustee upon its request for all expenses, disbursements and advances incurred or made by it in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its own negligence, willful misconduct or bad faith; and (3) indemnify, or cause to be indemnified, each of the Indenture Trustee and any predecessor Indenture Trustee (and their respective directors, officers, agents and employees) for, and hold it harmless against, any loss, liability or expense incurred without gross negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust or the performance of its duties hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. (b) As security for the performance of the obligations of the Owner Trustee under this Section, the Indenture Trustee shall have a Lien prior to the Bonds upon all funds and other property held or collected by it as part of the Indenture Estate. (c) The provisions of paragraph (a) apply equally to any agent appointed by the Indenture Trustee or Owner Trustee hereunder in accordance with the provisions hereof." (6) Section 8.08 is deleted and the following inserted in lieu thereof: "Section 8.08 [Reserved]" (7) The text of Section 8.09 following the caption is deleted and the following inserted in lieu thereof: "There shall at all times be an Indenture Trustee hereunder that is a corporation organized and doing business under the laws of the United States or any jurisdiction thereof, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $25,000,000, and subject to supervision or examination by federal or state or other local authority. If at any time the Indenture Trustee ceases to remain eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article." (8) Paragraphs (d) and (e) of Section 8.10 are deleted and the following inserted in lieu thereof: "(d) if at any time: (1) the Indenture Trustee ceases to remain eligible under Section 8.09 and fails to resign after written request therefor by the Owner Trustee or by any Holder who has been a bona fide holder of a Bond for at least six months, or (2) the Indenture Trustee has become incapable of acting or has been adjudged a bankrupt or insolvent or a receiver of the Indenture Trustee or of its property has been appointed or any public officer has taken charge or control of the Indenture Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (x) the Owner Trustee, acting after consultation with the Lessee, may remove the Indenture Trustee or (y) subject to Section 7.11, any Holder who has been a bona fide Holder of a Bond for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee. (e) If the Indenture Trustee resigns, is removed or becomes incapable of acting, or if a vacancy occurs in the office of Indenture Trustee for any cause, the Owner Trustee, acting after consultation with the Lessee, shall promptly appoint a successor Indenture Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Indenture Trustee has been appointed by Act of the Holders of not less than a majority in aggregate principal amount of the Outstanding Bonds of all series, considered as one class, delivered to the Lessee, the Owner Trustee and the retiring Indenture Trustee, the successor Indenture Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Indenture Trustee and supersede the successor Indenture Trustee appointed by the Lessee. If no successor Indenture Trustee has been so appointed by the Owner Trustee, acting after consultation with the Lessee, or by the Holders, and has accepted appointment in the manner hereinafter provided, any Holder who has been a bona fide Holder of a Bond for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee." (9) Section 8.13 is deleted and the following inserted in lieu thereof: "Section 8.13. [Reserved]" (10) Section 8.14 is deleted and the following inserted in lieu thereof: "Section 8.14. [Reserved]" (11) Section 8.15 is amended in the following respects: (A) Paragraph (a) is deleted and the following inserted in lieu thereof: "(a) If at any time or times it shall be necessary or prudent in order to conform to any law of any jurisdiction in which property shall be held subject to the Lien hereof, or the Indenture Trustee shall be advised by counsel, satisfactory to it, that it is so necessary or prudent in the interest of the Holders, or the Holders of a majority in aggregate principal amount of the Outstanding Bonds of all series, considered as one class, shall by Act of such Holders so request, the Indenture Trustee and the Owner Trustee shall execute and deliver all instruments and agreements necessary or proper to constitute another bank or trust company or one or more Persons approved by the Indenture Trustee either to act as co-trustee or co-trustees of all or any part of the Indenture Estate jointly with the Indenture Trustee originally named herein or any successor or successors or to act as separate trustee or trustees of all or any such property. In the event the Owner Trustee shall not have joined in the execution of such instruments and agreements within ten days after the receipt of a written request from the Indenture Trustee so to do, or in case an Indenture Event of Default shall have occurred and be continuing, the Indenture Trustee may act under the foregoing provisions of this Section without the concurrence of the Owner Trustee, and the Owner Trustee hereby appoints the Indenture Trustee its agent and attorney to act for it under the foregoing provisions of this Section in either of such contingencies." (B) Subparagraph (b)(5) is deleted and the following inserted in lieu thereof: "(5) the Owner Trustee and the Indenture Trustee, at any time, by an instrument in writing, executed by them jointly, may remove any such additional trustee or trustees and, in that case, by an instrument in writing executed by them jointly, may appoint a successor or successors to such additional trustee or trustees, anything herein to the contrary notwithstanding; provided, however, that if the Owner Trustee and the Indenture Trustee remove any such additional trustee which has been appointed at the request of the Holders pursuant to subsection (a) of this Section, then such parties shall appoint a successor or successors to such additional trustee so removed unless the Holders of a majority in aggregate principal amount of the Outstanding Bonds of all series, considered as one class, shall have agreed in writing that no such successor or successors need be appointed. In the event that the Owner Trustee shall not have joined in the execution of any such instrument within ten days after the receipt of a written request from the Indenture Trustee to do so, the Indenture Trustee shall have power to remove any such additional trustee and to appoint a successor additional trustee without the concurrence of the Owner Trustee, the latter hereby appointing the Indenture Trustee its agent and attorney to act for it in such connection in such contingency. In the event that the Indenture Trustee alone shall have appointed an additional trustee or trustees as above provided, it may at any time, by an instrument in writing, remove any such additional trustee or trustees, the successor to any such additional trustee so removed to be appointed by the Owner Trustee and the Indenture Trustee, or by the Indenture Trustee alone, as hereinbefore in this Section provided." (i) Article Nine is deleted and the following inserted in lieu thereof: "ARTICLE NINE [Reserved]" (j) Article Ten is amended as follows: (1) Section 10.01 is amended in the following respects: (A) the text preceding subparagraphs (a) through (l) is amended to delete the text "the Lessee,"; (B) subparagraph (b) is deleted and the following inserted in lieu thereof: "(b) to evidence the succession of another bank or trust company to the Owner Trustee, and the assumption by any such successor of the covenants of the Owner Trustee herein and in the Bonds contained, or to evidence the appointment of a co-trustee pursuant to the terms of the Trust Agreement;" (C) subparagraph (e) is deleted and the following inserted in lieu thereof: "(e) to add to the covenants of the Owner Trustee for the benefit of the Holders or to evidence the surrender of any right or power herein conferred upon the Owner Trustee;" (D) subparagraph (g) is deleted and the following inserted in lieu thereof: "(g) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to qualify or continue the qualification of this Indenture (including any Series Supplemental Indenture) under the Trust Indenture Act, or under any similar federal statute hereafter enacted, or to add to this Indenture such other provisions as may be expressly permitted by the Trust Indenture Act;" (2) Section 10.02 is amended in the following respects: (A) Paragraph (a) is amended by deleting from the phrase "the Owner Trustee and the Lessee may" in the text preceding the first proviso the words "and the Lessee"; and (B) the text ", or reduce the requirements of Section 12.04 for quorum or voting" at the end of subparagraph (a)(3) is deleted. (3) Section 10.08 is deleted and the following inserted in lieu thereof: "Section 10.08. [Reserved]" (4) Section 10.09 is amended by deleting (A) the references in the first sentence thereof to, respectively, "or the Lessee" and "and the Lessee", and (B) the reference in the second sentence thereof to "or the Lessee", together with the text ", the Lessee". (k) Article Eleven is amended as follows: (1) Paragraph (a) of Section 11.01 is amended by deleting clause (z) thereof. (2) Paragraph (e) of Section 11.01 is deleted and the following inserted in lieu thereof: "(e) Notwithstanding the satisfaction and discharge of any Bonds as hereinabove provided, the respective obligations of the Owner Trustee and the Indenture Trustee in respect of such Bonds under Sections 2.09, 2.10, 4.03 and 8.07 and this Article shall survive." (3) Paragraph (c) of Section 11.02 is deleted and the following inserted in lieu thereof: "(c) Notwithstanding the satisfaction and discharge of any Bonds as hereinabove provided, the respective obligations of the Owner Trustee and the Indenture Trustee in respect of such Bonds under Sections 2.09, 2.10, 4.03 and 8.07 and this Article shall survive." (l) Article Twelve is deleted and the following inserted in lieu thereof: "ARTICLE TWELVE [Reserved]" (m) Appendix A to the Indenture is hereby amended as set forth in Schedule A-1 attached hereto. ARTICLE TWO Terms Of The Refunding Bonds Section 2.01 The Refunding Bonds. (a) There are hereby created and established two separate series of Additional Bonds designated, respectively, "Waterford 3 Secured Lease Obligation Bonds, % Series [B/C] due ____" (the "Series [B/C] ____ Bonds") and "Waterford 3 Secured Lease Obligation Bonds, % Series [B/C] due ____" (the "Series [B/C] ____ Bonds"; and, together with the Series [B/C] ____ Bonds, the "Refunding Bonds"). The Refunding Bonds of each series shall be issued in the aggregate principal amounts, shall bear interest at the rates per annum and shall have the final maturities set forth below: Original Principal Interest Final Amount Rate Maturity Series [B/C] Bonds $ % ______ __, Series [B/C] Bonds $ ______ __, The Series [B/C] ____ Bonds and the Series [B/C] Bonds shall be substantially in the forms of Exhibits A-1 and A-2 hereto, respectively. (b) Each Refunding Bond shall bear interest on the principal amount thereof from time to time outstanding from the Issue Date designated thereon until paid in full at the rate of interest set forth therein, which interest shall be payable on _________ 2, 199_ and on each ____ 2 and ____ 2 thereafter to and including the final maturity date thereof, unless paid in full prior to such date as provided herein and in the Refunding Bond. (c) The original principal amount of each Refunding Bond shall be payable in installments on the dates and in the amounts set forth in Schedule 1 attached thereto, as such Schedule may be adjusted from time to time in accordance with the provisions of the Indenture and of such Refunding Bond. Installments of principal of and premium, if any, and interest on each Refunding Bond shall be due and payable on the payment dates specified in Schedule 1 attached thereto. (d) Each Refunding Bond shall be subject to redemption as set forth in such Refunding Bond. There shall not be a Sinking Fund for the Refunding Bonds of either series. ARTICLE THREE Miscellaneous Section 3.01 Execution as Supplemental Indenture. This Supplemental Indenture No. 2 is executed and shall be construed as an indenture supplemental to the Indenture and, as provided in the Original Indenture, this Supplemental Indenture No. 2 forms a part thereof. Section 3.02 Counterpart Execution. This Supplemental Indenture No. 2 may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Section 3.03 Concerning the Owner Trustee. Anything herein to the contrary notwithstanding, all and each of the agreements and obligations herein made or undertaken on the part of the Owner Trustee are made or undertaken not as personal agreements by the Owner Trustee in its individual capacity for the purpose or with the intention of binding it personally, but are made or undertaken solely for the purpose of binding only the Trust Estate, and this Supplemental Indenture No. 2 is executed and delivered by the Owner Trustee in its individual capacity solely in the exercise of the powers expressly conferred upon it as trustee under the Trust Agreement; and no personal liability or responsibility is assumed hereunder by or shall at any time be enforceable against the Owner Trustee or any successor in trust or the Owner Participant on account of any agreements hereunder of the Owner Trustee, either express or implied, all such personal liability, if any, being expressly waived by the Indenture Trustee and the Holders and by all Persons claiming by, through or under the Indenture Trustee and the Holders; provided, however, that the Owner Trustee, in its individual capacity, shall be liable hereunder for its own gross negligence or willful misconduct. If a successor owner trustee is appointed in accordance with the terms of the Trust Agreement, such successor owner trustee shall,without any further act, succeed to all the rights, duties, immunities and obligations of the Owner Trustee hereunder, and its predecessor owner trustee and the Owner Trustee in its individual capacity shall be released from all further duties and obligations hereunder, without prejudice to any claims against the Owner Trustee in its individual capacity or the Owner Trustee for any default by the Owner Trustee in its individual capacity or the Owner Trustee, respectively, in the performance of its obligations hereunder prior to such appointment. In Witness Whereof, the parties hereto have caused this Supplemental Indenture No. 2 to be duly executed by their respective officers thereunto authorized, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. Attest: First National Bank of Commerce, not in its individual capacity, except as otherwise expressly provided in the Indenture, but solely as Owner Trustee [Seal] By: Name: Title: Attest: Bankers Trust Company, as successor Corporate Indenture Trustee [Seal] By: Name: Title: Stanley Burg, as successor Individual Indenture Trustee ACKNOWLEDGMENT State Of ) ) ss.: County Of ) On this ___ day of _________, 199_, before me, the undersigned Notary Public, duly commissioned and qualified within the State and County aforesaid, and in the presence of the undersigned competent witnesses, personally came and appeared ____________, to me personally known, who being by me duly sworn did say that ____ is a ________________________________ of First National Bank of Commerce, a national banking association, the Owner Trustee referred to in the foregoing instrument, that the seal affixed to the foregoing instrument is the seal of said national banking association, that said instrument was signed and sealed on behalf of said association by authority of its Board of Directors and that ____ acknowledged said instrument to be the free act and deed of said national banking association. [signature of appearer] WITNESSES: Notary Public My Commission Expires: ACKNOWLEDGMENT State Of ) ) ss.: County Of ) On this ___ day of _________, 199_, before me, the undersigned Notary Public, duly commissioned and qualified within the State and County aforesaid, and in the presence of the undersigned competent witnesses, personally came and appeared ___________, to me personally known, who being by me duly sworn did say that _____ is a ______________ of Bankers Trust Company, a New York banking corporation, successor Corporate Indenture Trustee under the foregoing instrument, that the seal affixed to the foregoing instrument is the seal of said corporation, that said instrument was signed and sealed on behalf of said corporation by authority of its Board of Directors and that _____ acknowledged said instrument to be the free act and deed of said corporation. [signature of appearer] WITNESSES: Notary Public My Commission Expires: ACKNOWLEDGMENT State Of ) ) ss.: County Of ) On this ___ day of _________, 199_, before me, the undersigned Notary Public, duly commissioned and qualified within the State and County aforesaid, and in the presence of the undersigned competent witnesses, personally came and appeared Stanley Burg to me personally known, who being by me duly sworn did say that he is the successor Individual Indenture Trustee under the foregoing instrument and that in his capacity as such he executed the foregoing instrument. [signature of appearer] WITNESSES: Notary Public My Commission Expires: EXHIBIT C TO SUPPLEMENTAL INDENTURE NO. 2 [Schedule A-1 to Appendix A (Definitions)] EXHIBIT A-1 TO SUPPLEMENTAL INDENTURE NO. 2 FORM OF REFUNDING BOND THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT WATERFORD 3 SECURED LEASE OBLIGATION BOND, __% SERIES [B/C] DUE ____ (DUE __________ 2, ____) Issue Date: ________ No. R-__ FOR VALUE RECEIVED, FIRST NATIONAL BANK OF COMMERCE, not in its individual capacity, but solely as trustee ("Owner Trustee") under Trust Agreement No. [2/3], dated as of September 1, 1989, with ESSL 2, Inc. (the "Owner Participant"), hereby promises to pay to _______________________, or registered assigns, the principal sum of _________________________________ DOLLARS ($________), such payment to be made in the amounts and on the dates specified in Schedule 1 hereto, as such Schedule 1 may be revised in accordance herewith, and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the aggregate amount of such principal sum remaining unpaid from time to time from the date of issuance of this Bond until due and payable, semiannually in arrears on ________ 2 and ________ 2 in each year, commencing ________ 2, 199_, at the rate of _____% per annum, until the principal amount hereof is paid in full. Capitalized terms used in this Bond and not defined herein have the respective meanings ascribed thereto in Supplemental Indenture No. 2 to the Original Indenture (as hereinafter defined). In the event that any payment to be made hereunder is stated to be due on a day that is not a Business Day, then such payment shall be due and payable on the next succeeding Business Day with the same force and effect as if made on the date on which such payment was stated to be due, and no interest in respect of such payment shall accrue for the period from and after such stated due date. All payments of principal, premium, if any, and interest to be made by the Owner Trustee hereon and under the Indenture of Trust and Deed of Mortgage No. [2/3], dated as of September 1, 1989 (the "Original Indenture"), as supplemented by Supplemental Indenture No. 1, dated as of September 1, 1989, and Supplemental Indenture No. 2, dated as of October 1, 1994 (the Original Indenture as so supplemented, and as it may be further amended or supplemented from time to time in accordance with the provisions thereof, being hereinafter referred to as the "Indenture"), between the Owner Trustee and Bankers Trust Company and Stanley Burg, as successor Corporate and Individual Indenture Trustee, respectively (together, the "Indenture Trustee"), shall be made only from the Indenture Estate and the Trust Estate, and the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have sufficient income or proceeds from the Indenture Estate to make such payments in accordance with the terms of Article Three of the Indenture. The Holder hereof, by its acceptance of this Bond, shall be deemed to have agreed that such Holder will look solely to the Trust Estate and the income and proceeds from the Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as otherwise expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Bond or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; provided, however, that in the event that the Lessee, or the Lessee and an Affiliate thereof, shall have assumed all the obligations of the Owner Trustee hereunder and under the Indenture in accordance with Section 2.16 of the Indenture, the Holder hereof, by its acceptance hereof, is deemed further to have agreed that all payments to be made hereunder and otherwise under the Indenture shall be made by the Lessee (or the Lessee and such Affiliate, as the case may be) and from the Indenture Estate, and in such event the Holder hereof will look solely to the Indenture Estate and the Lessee (and, if applicable, such Affiliate) for such payment. All principal, premium, if any, and interest in respect of this Bond shall be payable in immediately available funds in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts upon presentation of this Bond at the Corporate Trust Office or as otherwise contemplated by and in accordance with Section 2.11 of the Indenture. In the manner and to the extent provided in Section 2.17 of the Indenture, Schedule 1 hereto may be adjusted at the discretion of the Owner Trustee in connection with certain recalculations of Basic Rent pursuant to the Facility Lease. In the event of any partial redemption of this Bond (the installment payments of principal in accordance with Schedule 1 hereto not being considered for such purpose a redemption), the installment payments of principal on this Bond thereafter shall be adjusted in the manner provided in Section 6.03(b) of the Indenture. The Holder hereof, by its acceptance of this Bond, agrees that each payment received by it hereunder shall be applied in the manner provided in Section 3.08 of the Indenture. The Holder of this Bond, by its acceptance hereof, further agrees that it will duly note by appropriate means all payments made to it of principal of, premium, if any, and interest on this Bond, and that it will not in any event transfer or otherwise dispose of this Bond unless and until all such notations have been duly made and the other requirements of the Indenture have been complied with. This Bond is one of the Bonds referred to in the Indenture. The Indenture permits the issuance of additional series of Bonds, and the several series may be for varying aggregate principal amounts and may have different maturity dates, interest rates, redemption provisions and other terms. The properties of the Owner Trustee included in the Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Bond and all other Bonds issued and outstanding from time to time under the Indenture. Reference is hereby made to the Indenture for a complete statement of the rights of the Holders of, and the nature and extent of the security for, this Bond and of the rights of, and the nature and extent of the security for, the Holders of the other Bonds and of certain rights of the Owner Trustee, as well as for a statement of the terms and conditions of the trust created by the Indenture, to all of which terms and conditions the Holder hereof agrees by its acceptance of this Bond. This Bond is subject to purchase by the Owner Trustee as provided in Section 7.16 of the Indenture. This Bond is also subject to redemption in full, at the unpaid principal amount hereof plus accrued interest to the date fixed for redemption, in the event of the termination of the Facility Lease pursuant to Section 13(f) or (g) or Section 14 thereof, or Section 16(d)(5) of the Participation Agreement, subject, however, except in the case of a termination pursuant to Section 14 of the Facility Lease, to the right of the Lessee (or the Lessee and an Affiliate thereof, as the case may be) to assume this Bond in accordance with Section 2.16 of the Indenture (in which event there shall be no redemption of this Bond as a consequence of such termination). In addition, this Bond may be redeemed, in whole or in part, at any time at the redemption price of 100% of the unpaid principal amount of this Bond to be so redeemed, together with interest accrued to the date fixed for redemption, plus the Lessor Bond Make-Whole Premium, if any. "Lessor Bond Make-Whole Premium" shall mean an amount equal to the "Make-Whole Premium" due on such redemption date on the Refunding Collateral Bonds (as defined in the Indenture of the series correlative to this Bond which are in an unpaid principal amount equal to the unpaid principal to be so redeemed on this Bond. If an Indenture Event of Default shall occur and be continuing, the unpaid balance of the principal of this Bond and any other Bonds, together with all accrued but unpaid interest hereon and thereon, may, subject to certain rights of the Owner Trustee and the Owner Participant contained or referred to in the Indenture, be declared or may become due and payable in the manner and with the effect provided in the Indenture. The obligation of the Owner Trustee to pay the principal of and premium, if any, and interest on this Bond, and the lien of the Indenture or the Indenture Estate, is subject to being legally discharged prior to the maturity of this Bond upon the deposit with the Indenture Trustee of cash or certain securities sufficient to pay this Bond when due in accordance with the terms of the Indenture. There shall be maintained at the Corporate Trust Office a register for the purpose of registering transfers and exchanges of this and the other Bonds in the manner provided in the Indenture. Subject to the legend at the head of this Bond and satisfaction of the conditions provided in Section 2.09(b) of the Indenture, this Bond is transferable upon surrender hereof for registration of transfer at the Corporate Trust Office. The Owner Trustee and the Indenture Trustee shall treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving all payments of the principal of and premium, if any, and interest on this Bond and for all other purposes whatsoever, and neither the Owner Trustee nor the Indenture Trustee shall be affected by notice to the contrary. This Bond shall be governed by, and construed in accordance with, the law of the State of New York. IN WITNESS WHEREOF, the Owner Trustee has caused this Bond to be duly executed as of the date hereof. FIRST NATIONAL BANK OF COMMERCE, not in its individual capacity but solely as Owner Trustee By: _______________________________ Title: This Bond is one of the Waterford 3 Secured Lease Obligation Bonds, _____% Series [B/C] Due ___________ referred to in the within-mentioned Indenture. BANKERS TRUST COMPANY, as Corporate Indenture Trustee Dated:__________________ By: _______________________________ Title: SCHEDULE 1 TO EXHIBIT A-1 SCHEDULE OF PRINCIPAL AMORTIZATION Payment Date Principal Amount Payable Principal Balance EXHIBIT A-2 TO SUPPLEMENTAL INDENTURE NO. 2 FORM OF REFUNDING BOND THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT WATERFORD 3 SECURED LEASE OBLIGATION BOND, __% SERIES [B/C] DUE ____ (DUE __________ 2, ____) Issue Date: ________ No. R-__ FOR VALUE RECEIVED, FIRST NATIONAL BANK OF COMMERCE, not in its individual capacity, but solely as trustee ("Owner Trustee") under Trust Agreement No. [2/3], dated as of September 1, 1989, with ESSL 2, Inc. (the "Owner Participant"), hereby promises to pay to _______________________, or registered assigns, the principal sum of _________________________________ DOLLARS ($________), such payment to be made in the amounts and on the dates specified in Schedule 1 hereto, as such Schedule 1 may be revised in accordance herewith, and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the aggregate amount of such principal sum remaining unpaid from time to time from the date of issuance of this Bond until due and payable, semiannually in arrears on ________ 2 and ________ 2 in each year, commencing ________ 2, 199_, at the rate of _____% per annum, until the principal amount hereof is paid in full. Capitalized terms used in this Bond and not defined herein have the respective meanings ascribed thereto in Supplemental Indenture No. 2 to the Original Indenture (as hereinafter defined). In the event that any payment to be made hereunder is stated to be due on a day that is not a Business Day, then such payment shall be due and payable on the next succeeding Business Day with the same force and effect as if made on the date on which such payment was stated to be due, and no interest in respect of such payment shall accrue for the period from and after such stated due date. All payments of principal, premium, if any, and interest to be made by the Owner Trustee hereon and under the Indenture of Trust and Deed of Mortgage No. [2/3], dated as of September 1, 1989 (the "Original Indenture"), as supplemented by Supplemental Indenture No. 1, dated as of September 1, 1989, and Supplemental Indenture No. 2, dated as of October 1, 1994 (the Original Indenture as so supplemented, and as it may be further amended or supplemented from time to time in accordance with the provisions thereof, being hereinafter referred to as the "Indenture"), between the Owner Trustee and Bankers Trust Company and Stanley Burg, as successor Corporate and Individual Indenture Trustee, respectively (together, the "Indenture Trustee"), shall be made only from the Indenture Estate and the Trust Estate, and the Indenture Trustee shall have no obligation for the payment thereof except to the extent that the Indenture Trustee shall have sufficient income or proceeds from the Indenture Estate to make such payments in accordance with the terms of Article Three of the Indenture. The Holder hereof, by its acceptance of this Bond, shall be deemed to have agreed that such Holder will look solely to the Trust Estate and the income and proceeds from the Indenture Estate to the extent available for distribution to the Holder hereof as above provided, and that neither the Owner Participant nor, except as otherwise expressly provided in the Indenture, the Owner Trustee nor the Indenture Trustee is or shall be personally liable to the Holder hereof for any amounts payable under this Bond or for any performance to be rendered under the Indenture or any other Transaction Document or for any liability thereunder; provided, however, that in the event that the Lessee, or the Lessee and an Affiliate thereof, shall have assumed all the obligations of the Owner Trustee hereunder and under the Indenture in accordance with Section 2.16 of the Indenture, the Holder hereof, by its acceptance hereof, is deemed further to have agreed that all payments to be made hereunder and otherwise under the Indenture shall be made by the Lessee (or the Lessee and such Affiliate, as the case may be) and from the Indenture Estate, and in such event the Holder hereof will look solely to the Indenture Estate and the Lessee (and, if applicable, such Affiliate) for such payment. All principal, premium, if any, and interest in respect of this Bond shall be payable in immediately available funds in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts upon presentation of this Bond at the Corporate Trust Office or as otherwise contemplated by and in accordance with Section 2.11 of the Indenture. In the manner and to the extent provided in Section 2.17 of the Indenture, Schedule 1 hereto may be adjusted at the discretion of the Owner Trustee in connection with certain recalculations of Basic Rent pursuant to the Facility Lease. In the event of any partial redemption of this Bond (the installment payments of principal in accordance with Schedule 1 hereto not being considered for such purpose a redemption), the installment payments of principal on this Bond thereafter shall be adjusted in the manner provided in Section 6.03(b) of the Indenture. The Holder hereof, by its acceptance of this Bond, agrees that each payment received by it hereunder shall be applied in the manner provided in Section 3.08 of the Indenture. The Holder of this Bond, by its acceptance hereof, further agrees that it will duly note by appropriate means all payments made to it of principal of, premium, if any, and interest on this Bond, and that it will not in any event transfer or otherwise dispose of this Bond unless and until all such notations have been duly made and the other requirements of the Indenture have been complied with. This Bond is one of the Bonds referred to in the Indenture. The Indenture permits the issuance of additional series of Bonds, and the several series may be for varying aggregate principal amounts and may have different maturity dates, interest rates, redemption provisions and other terms. The properties of the Owner Trustee included in the Indenture Estate are pledged to the Indenture Trustee to the extent provided in the Indenture as security for the payment of the principal of and premium, if any, and interest on this Bond and all other Bonds issued and outstanding from time to time under the Indenture. Reference is hereby made to the Indenture for a complete statement of the rights of the Holders of, and the nature and extent of the security for, this Bond and of the rights of, and the nature and extent of the security for, the Holders of the other Bonds and of certain rights of the Owner Trustee, as well as for a statement of the terms and conditions of the trust created by the Indenture, to all of which terms and conditions the Holder hereof agrees by its acceptance of this Bond. This Bond is subject to purchase by the Owner Trustee as provided in Section 7.16 of the Indenture. This Bond is also subject to redemption in full, at the unpaid principal amount hereof plus accrued interest to the date fixed for redemption, in the event of the termination of the Facility Lease pursuant to Section 13(f) or (g) or Section 14 thereof, or Section 16(d)(5) of the Participation Agreement, subject, however, except in the case of a termination pursuant to Section 14 of the Facility Lease, to the right of the Lessee (or the Lessee and an Affiliate thereof, as the case may be) to assume this Bond in accordance with Section 2.16 of the Indenture (in which event there shall be no redemption of this Bond as a consequence of such termination). In addition, this Bond may be redeemed, in whole or in part, at any time at the redemption price of 100% of the unpaid principal amount of this Bond to be so redeemed, together with interest accrued to the date fixed for redemption, plus the Lessor Bond Make-Whole Premium, if any. "Lessor Bond Make-Whole Premium" shall mean an amount equal to the "Make-Whole Premium" due on such redemption date on the Refunding Collateral Bonds (as defined in the Indenture) of the series correlative to this Bond which are in an unpaid principal amount equal to the unpaid principal to be so redeemed on this Bond. If an Indenture Event of Default shall occur and be continuing, the unpaid balance of the principal of this Bond and any other Bonds, together with all accrued but unpaid interest hereon and thereon, may, subject to certain rights of the Owner Trustee and the Owner Participant contained or referred to in the Indenture, be declared or may become due and payable in the manner and with the effect provided in the Indenture. The obligation of the Owner Trustee to pay the principal of and premium, if any, and interest on this Bond, and the lien of the Indenture or the Indenture Estate, is subject to being legally discharged prior to the maturity of this Bond upon the deposit with the Indenture Trustee of cash or certain securities sufficient to pay this Bond when due in accordance with the terms of the Indenture. There shall be maintained at the Corporate Trust Office a register for the purpose of registering transfers and exchanges of this and the other Bonds in the manner provided in the Indenture. Subject to the legend at the head of this Bond and satisfaction of the conditions provided in Section 2.09(b) of the Indenture, this Bond is transferable upon surrender hereof for registration of transfer at the Corporate Trust Office. The Owner Trustee and the Indenture Trustee shall treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving all payments of the principal of and premium, if any, and interest on this Bond and for all other purposes whatsoever, and neither the Owner Trustee nor the Indenture Trustee shall be affected by notice to the contrary. This Bond shall be governed by, and construed in accordance with, the law of the State of New York. IN WITNESS WHEREOF, the Owner Trustee has caused this Bond to be duly executed as of the date hereof. FIRST NATIONAL BANK OF COMMERCE, not in its individual capacity but solely as Owner Trustee By: _______________________________ Title: This Bond is one of the Waterford 3 Secured Lease Obligation Bonds, _____% Series [B/C] Due ___________ referred to in the within-mentioned Indenture. BANKERS TRUST COMPANY, as Corporate Indenture Trustee Dated:__________________ By: _______________________________ Title: SCHEDULE 1 TO EXHIBIT A-2 SCHEDULE OF PRINCIPAL AMORTIZATION Payment Date Principal Amount Payable Principal Balance EX-4 6 Exhibit 4(e)-4 CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE AS SUPPLEMENTED BY THIS LEASE SUPPLEMENT NO. 1 HAVE BEEN ASSIGNED TO, AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF, THE INDENTURE TRUSTEE UNDER INDENTURE OF MORTGAGE AND DEED OF TRUST NO. [1/2/3], DATED AS OF SEPTEMBER 1, 1989, AS SUPPLEMENTED. THIS LEASE SUPPLEMENT NO. 1 HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS. SEE SECTION 3(c) OF THIS LEASE SUPPLEMENT NO. 1 FOR INFORMATION CONCERNING THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF. THIS COUNTERPART IS NOT THE ORIGINAL COUNTERPART. LEASE SUPPLEMENT NO. 1 dated as of ____________, 19__ to FACILITY LEASE NO. [1/2/3] dated as of September 1, 1989 between FIRST NATIONAL BANK OF COMMERCE, not in its individual capacity, but solely as Owner Trustee under Trust Agreement No. [1/2/3], dated as of September 1, 1989, with the Owner Participant, Lessor and LOUISIANA POWER & LIGHT COMPANY, Lessee Original Facility Lease Recorded on [September 28, 1989] at __________ CERTAIN RIGHTS OF THE LESSOR UNDER THE FACILITY LEASE AS SUPPLEMENTED BY THIS LEASE SUPPLEMENT NO. 1 HAVE BEEN ASSIGNED TO, AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF, THE INDENTURE TRUSTEE UNDER INDENTURE OF MORTGAGE AND DEED OF TRUST NO. [1/2/3], DATED AS OF SEPTEMBER 1, 1989, AS SUPPLEMENTED. THIS LEASE SUPPLEMENT NO. 1 HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS. SEE SECTION 3(c) OF THIS LEASE SUPPLEMENT NO. 1 FOR INFORMATION CONCERNING THE RIGHTS OF HOLDERS OF VARIOUS COUNTERPARTS HEREOF. THIS COUNTERPART IS THE ORIGINAL COUNTERPART. INDENTURE TRUSTEE'S RECEIPT Receipt of this Original Counterpart is acknowledged. BANKERS TRUST COMPANY Indenture Trustee as Aforesaid By Authorized Officer LEASE SUPPLEMENT NO. 1 dated as of ____________, 19__ to FACILITY LEASE NO. [1/2/3] dated as of September 1, 1989 between FIRST NATIONAL BANK OF COMMERCE, not in its individual capacity, but solely as Owner Trustee under Trust Agreement No. [1/2/3], dated as of September 1, 1989, with the Owner Participant, Lessor and LOUISIANA POWER & LIGHT COMPANY, Lessee Original Facility Lease Recorded on [September 28, 1989] at _________________ THIS LEASE SUPPLEMENT NO. 1, dated as of __________, 19__ ("Lease Supplement No. 1"), to FACILITY LEASE NO. [1/2/3], dated as of September 1, 1989 (the "Facility Lease"), between FIRST NATIONAL BANK OF COMMERCE, a national banking association, not in its individual capacity but solely as Corporate Owner Trustee (the "Lessor"), under the Trust Agreement (such term, and all other capitalized terms used herein without definition, being defined as provided in Section 1 below), and LOUISIANA POWER & LIGHT COMPANY, a Louisiana corporation (the "Lessee"), W I T N E S S E T H: WHEREAS, the Lessee and the Lessor have heretofore entered into the Facility Lease providing for the lease by the Lessor to the Lessee of the Undivided Interest; and WHEREAS, the Lessee, the Lessor, the Owner Participant, the Funding Corporation, Collateral Trust Trustee and the Indenture Trustee have entered into a Refunding Agreement No. [ ], dated as of ___________, 199___, providing for the issuance by the Owner Trustee of Additional Bonds, including Refunding Bonds ("Lessor Bonds") to refund the Outstanding Initial Series Bonds and to pay certain other costs incurred in connection therewith; and WHEREAS, the Owner Trustee and the Indenture Trustee have entered into Supplemental Indenture No. 2, dated as of _______, 199_, to the Lease Indenture creating the "Lessor Bonds" for such purpose and establishing the terms, conditions and designations of such Lessor Bonds; and WHEREAS, Section 3(e) of the Facility Lease provides for an adjustment to Basic Rent and to the Value Schedules in order to preserve the Net Economic Return in the event, among other things, of the issuance of the Lessor Bonds; NOW, THEREFORE, in consideration of the premises and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1. Definitions. For purposes hereof, capitalized terms used herein and not otherwise defined herein or in the recitals shall have the meanings assigned to such terms in Appendix A to the Facility Lease. SECTION 2. Amendments; Schedules. (a) Section 3(d)(ii) of the Facility Lease is hereby amended by replacing the words "sinking fund" with "payment". (b) Section 3(e)(ii) of the Facility Lease is hereby amended by adding thereto after the words "Participation Agreement" the following: or if the expenses paid by the Lessor in connection with the issuance of any Additional Bonds or Collateral Bonds are not equal to the amounts set forth in the Pricing Assumptions (c) Section 22 of the Facility Lease is hereby amended by adding a new paragraph (k) thereto as follows: (k) Personal Property. The Lessee and the Lessor agree for purposes of this Lease that it is their intent that, to the extent permitted by Applicable Law, the Undivided Interest and every part thereof shall be considered as personal and not real property. (d) As of the date first written above and until and unless further amended, Schedules 1 through 5 of the Facility Lease are hereby amended as follows: (i) Schedule 1 to the Facility Lease entitled "Basic Rent Percentages" is deleted in its entirety and is hereby replaced with Schedule 1 hereto. (ii) Schedule 2 to the Facility Lease entitled "Schedule of Casualty Values" is deleted in its entirety and is hereby replaced with Schedule 2 hereto. (iii) Schedule 3 to the Facility Lease entitled "Schedule of Special Casualty Values" is deleted in its entirety and is hereby replaced with Schedule 3 hereto. (iv) Schedule 4 to the Facility Lease entitled "Schedule of Net Casualty Values" is deleted in its entirety and is hereby replaced with Schedule 4 hereto. (v) Schedule 5 to the Facility Lease entitled "Schedule of Net Special Casualty Values" is deleted in its entirety and is hereby replaced with Schedule 5 hereto. (e) Schedule U3S to the Facility Lease is attached hereto. (f) Appendix A to the Facility Lease is hereby amended as set forth in Schedule A-1 to Appendix A attached hereto. SECTION 3. Miscellaneous. (a) Counterpart Execution. This Lease Supplement No. 1 may be executed in any number of counterparts and by each of the parties hereto or thereto on separate counterparts, all such counterparts together constituting but one and the same instrument. (b) Execution as Lease Supplement. This Lease Supplement No. 1 is executed and shall be construed as a supplement and amendment to the Facility Lease and shall form a part thereof. On and from the delivery of this Lease Supplement No. 1, any reference in any Transaction Document to the Facility Lease shall be deemed to refer to the Facility Lease as supplemented and amended by this Lease Supplement No. 1. (c) Original Counterpart. The single executed original of this Lease Supplement No. 1 marked "THIS COUNTERPART IS THE ORIGINAL COUNTERPART" and containing the receipt of the Indenture Trustee thereon shall be the "Original" of this Lease Supplement No. 1. To the extent that the Facility Lease, as supplemented by this Lease Supplement No. 1, constitutes chattel paper, as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction, no security interest in the Facility Lease, as so supplemented, may be created or continued through the transfer or possession of any counterparts of the Facility Lease and supplements thereto other than the "Originals" of any thereof. IN WITNESS WHEREOF, each of the parties hereto has caused this Lease Supplement No. 1 to be duly executed by an officer thereunto duly authorized, as of the date set forth above. FIRST NATIONAL BANK OF COMMERCE, not in its individual capacity but solely as Owner Trustee ATTEST: By: Name: [SEAL] Title: Vice President LOUISIANA POWER & LIGHT COMPANY ATTEST: By: [SEAL] Name: Title: ACKNOWLEDGMENT STATE OF LOUISIANA ) ) ss.: PARISH OF ________________ ) On this ______ day of _______________, 199__, before me, the undersigned Notary Public, duly commissioned and qualified within the State and County aforesaid, and in the presence of the undersigned competent witnesses, personally came and appeared ________________________, to me personally known, who being by me duly sworn did say that [he] is a Vice President and Trust Officer of FIRST NATIONAL BANK OF COMMERCE, a national banking association, Owner Trustee under the Trust Agreement, and that the seal affixed to the foregoing instrument is the seal of said national banking association and that said instrument was signed and sealed on behalf of said national banking association by authority of its Board of Directors and that [he] acknowledged said instrument to be the free act and deed of said national banking association. [signature of appearer] WITNESSES: Notary Public My Commission Expires: ACKNOWLEDGMENT STATE OF LOUISIANA ) ) ss.: PARISH OF ________________ ) On this ______ day of _______________, 199__, before me, the undersigned Notary Public, duly commissioned and qualified within the State and County aforesaid, and in the presence of the undersigned competent witnesses, personally came and appeared ________________________, to me personally known, who being by me duly sworn did say that [he] is the Treasurer of LOUISIANA POWER & LIGHT COMPANY, a Louisiana corporation, and that the seal affixed to the foregoing instrument is the corporate seal of said corporation, and that said instrument was signed and sealed on behalf of said corporation by authority of its Board of Directors and that [he] acknowledged said instrument to be the free act and deed of said corporation. [signature of appearer] WITNESSES: Notary Public My Commission Expires: Schedule 1 BASIC RENT PERCENTAGES Schedule 2 SCHEDULE OF CASUALTY VALUES Schedule 3 SCHEDULE OF SPECIAL CASUALTY VALUES Schedule 4 SCHEDULE OF NET CASUALTY VALUES Schedule U3S Appendix A EX-4 7 Exhibit 4(f)-4 AMENDMENT NO. 1 dated as of ______ __, 199_ to PARTICIPATION AGREEMENT NO. [1/2/3] dated as of September 1, 1989 among ESSL 2, INC., as Owner Participant W3A FUNDING CORPORATION, as Funding Corporation FIRST NATIONAL BANK OF COMMERCE, as Owner Trustee BANKERS TRUST COMPANY, as [successor] Corporate Indenture Trustee under Indenture of Mortgage and Deed of Trust No. [1/2/3], dated as of September 1, 1989, as supplemented, with the Owner Trustee, and as Collateral Trust Trustee under Collateral Trust Indenture dated as of _________________, 199__ with the Lessee and Funding Corporation, STANLEY BURG, as [successor] Individual Indenture Trustee under Indenture of Mortgage and Deed of Trust No. [1/2/3], dated as of September 1, 1989, as supplemented, with the Owner Trustee, and LOUISIANA POWER & LIGHT COMPANY, as Lessee THIS AMENDMENT NO. 1, dated as of _____ ___, 199_ ("PA Amendment No. 1"), to PARTICIPATION AGREEMENT NO. [1/2/3], dated as of September 1, 1989, among ESSL 2, Inc., as Owner Participant (such term and all other capitalized terms used herein and not defined herein having the respective meanings specified in Appendix A to the Participation Agreement, as modified by Schedule A-1 thereto), W3A FUNDING CORPORATION, as Funding Corporation, FIRST NATIONAL BANK OF COMMERCE, not in its individual capacity but solely as Owner Trustee, BANKERS TRUST COMPANY, as [successor] Corporate Indenture Trustee under the Indenture and as Collateral Trust Trustee under the Collateral Trust Indenture, STANLEY BURG, not in his individual capacity but solely as [successor] Individual Indenture Trustee under the Indenture, and LOUISIANA POWER & LIGHT COMPANY, as Lessee. W I T N E S S E T H: WHEREAS, the parties to this PA Amendment No. 1, other than Funding Corporation and the Collateral Trust Trustee, are parties to Participation Agreement No. [1/2/3], dated as of September 1, 1989 (the "Participation Agreement"), among the Owner Participant, the Owner Trustee, the Corporate Indenture Trustee, the Individual Indenture Trustee and the Lessee; and WHEREAS, the Initial Series Bonds were issued by the Owner Trustee in connection with the acquisition of the Undivided Interest; and WHEREAS, Section 2(b) of the Participation Agreement provides for a refunding of outstanding Bonds upon the satisfaction of the conditions set forth in Sections 2 and 10(c) of the Participation Agreement and Section 2.05 of the Indenture; and WHEREAS, the Lessee, the Owner Participant, the Owner Trustee, Funding Corporation, the Indenture Trustee and the Collateral Trust Trustee have entered into the Refunding Agreement, dated as of ________ __, 199_, providing for the issuance by the Owner Trustee of Additional Bonds, including Refunding Bonds, to provide funds to redeem the Outstanding Initial Series Bonds and to pay certain other costs incurred in connection therewith; and WHEREAS, the Lessee and the Owner Participant have agreed for the Owner Participant to make an additional equity investment and to cause the refinancing of the Outstanding Initial Series Bonds through the issuance of Additional Bonds (including Refunding Bonds) and Collateral Bonds in amounts sufficient to finance certain transaction expenses associated with the refinancing and the premium on the Initial Series Bonds, and accordingly have agreed that the refunding contemplated by the Refunding Agreement will require certain amendments to the Transaction Documents; and WHEREAS, the parties hereto wish (x) to amend the Participation Agreement to provide for the utilization of Funding Corporation in connection with the refunding of Bonds, and (y) to effect the refunding of the Outstanding Initial Series Bonds through a refunding transaction in which, among other things, Funding Corporation will issue Collateral Bonds to the public and will apply a portion of the proceeds thereof as a Refunding Loan for the account of the Owner Trustee for the refunding in whole of the Outstanding Initial Series Bonds, such loan to be evidenced by Additional Bonds issued by the Owner Trustee to or upon the order of Funding Corporation; WHEREAS, Basic Rent and the Value Schedules, as set forth in Lease Supplement No. 1, have been adjusted to take into effect, among other things, the additional Tax Assumptions set forth in TIA Amendment No. 1 and the additional Pricing Assumptions set forth in Schedule 2 hereto; NOW, THEREFORE, in consideration of the premises and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE ONE AMENDMENTS Section 1.01. Amendments. (a) The Participation Agreement is hereby amended by adding Funding Corporation and the Collateral Trust Trustee as parties thereto. The Participation Agreement is further amended in the following respects: (b) The first sentence of Section 1 is deleted and the following inserted in lieu thereof: "For the purposes hereof, capitalized terms used herein shall have the meanings assigned to such terms in Appendix A hereto as modified by Schedule A-1 thereto." (c) Section 2 is amended as follows: (1) Paragraphs (b), (c) and (d) are deleted and the following inserted in lieu thereof: "(b) Refunding of Bonds. (1) Subject to satisfaction of the conditions set forth in this Section 2 and Section 10(c), Section 2.05 of the Indenture and the terms of the Refunded Bonds (as defined below), the Lessee shall have the right to request the Owner Trustee to, and upon any such request the Owner Trustee shall, take such steps as may be necessary to refund in whole or in part any Bonds then Outstanding (the "Refunded Bonds"), including the issuance on any Refunding Date of one or more series of Additional Bonds (any such Additional Bonds with respect to which the proceeds are used to refund the Refunded Bonds being hereinafter referred to as the "Refunding Bonds") to or upon the order of Funding Corporation in an aggregate principal amount equal to such Refunded Bonds; provided, however, that unless the Owner Participant shall have consented thereto, the Lessee shall not exercise the right granted in this Section 2(b) on more than six occasions. In addition, subject to the terms of the Indenture and Section 10(c), the Lessee may require the Owner Trustee to issue Additional Bonds and to use the proceeds thereof to finance (x) all fees, expenses, disbursements and costs (including legal and other professional fees and expenses) incurred by the Owner Participant, the Owner Trustee, the Indenture Trustee and the Collateral Trust Trustee (to the extent that the Lessee is liable therefor pursuant to Section 13(c)) in connection with any refunding pursuant to this Section 2(b)[,][and] (y) all fees, expenses, disbursements and costs incurred by the Lessee in connection with any such refunding pursuant to this Section 2(b), including, without limitation, the costs of preparing any related underwriting agreement and registration statement, all filing fees relating to any such registration statement, the fees, expenses and disbursements of counsel to any underwriters of the Additional Bonds, rating agency fees, and the fees and commissions of the underwriters of such Additional Bonds (including the Refunding Bonds) [and (z) any premium payable on the Refunded Bonds]. (2) Subject to satisfaction of the conditions set forth in this Section 2 and Section 10(c) and Section 2.04 of the Collateral Trust Indenture, the Lessee shall have the right to request Funding Corporation to issue Collateral Bonds in connection with the issuance of Additional Bonds pursuant to this Section 2(b), and upon such request, on any Refunding Date, Funding Corporation shall issue and sell Collateral Bonds and lend a portion of the proceeds thereof for the account of the Owner Trustee in an amount (a "Refunding Loan") equal to the aggregate principal amount of the related Additional Bonds, provided, however, that unless the Owner Participant shall have consented thereto, the Lessee shall not exercise the right granted in this Section 2(b) on more than six occasions. Funding Corporation shall pay the proceeds of any Refunding Loan directly to the Indenture Trustee in immediately available funds at the Corporate Trust Office. The Owner Trustee's obligation to repay a Refunding Loan shall be evidenced by one or more Additional Bonds, issued to or upon the order of Funding Corporation and pledged to the Collateral Trust Trustee as security for the related Collateral Bonds, which Additional Bonds shall be in an aggregate principal amount equal to the Refunding Loan, shall bear interest at the rate per annum, and shall be payable as set forth in, or determined under, the Indenture. Not less than three Business Days prior to the Refunding Date, Funding Corporation shall deliver to the Owner Participant and the Lessee a certificate setting forth the information necessary to complete the Additional Bond or Bonds to be issued in exchange for such Refunding Loan (including any schedule or schedules thereto). Upon such delivery, and upon approval by the Lessee and the Owner Participant of the terms thereof, the Owner Participant and the Lessee shall cause the form of each such Additional Bond to be completed and forwarded to the Owner Trustee for execution. Anything herein to the contrary notwithstanding, the Lessee shall be under no obligation whatsoever to utilize Funding Corporation or cause the issuance of Collateral Bonds in connection with any refundings contemplated by this Section 2(b). (3) The refundings contemplated by this Section 2(b) shall be effected at the request of the Lessee given in writing to the Owner Participant at least 20 Business Days prior to the Refunding Date; provided, however, that (i) no such request shall be made or refunding shall occur while an Event of Default shall have occurred and be continuing, (ii) except as contemplated in Sections 3(d), 3(e) and 3(f) of the Facility Lease, Net Economic Return shall not be adversely affected thereby (or appropriate adjustments shall have been made or shall be made on the Refunding Date pursuant to Sections 3(e) and 3(f) of the Facility Lease to preserve Net Economic Return), and (iii) any modifications of the Transaction Documents (after giving effect to any adjustments pursuant to clause (ii) above) shall not, in the opinion of the Owner Participant's Special Tax Counsel, adversely affect the tax benefits contemplated by the Owner Participant in entering into the transactions contemplated by this Participation Agreement and the other Transaction Documents; and provided, further, that any notice of refunding given by the Lessee to the Owner Participant as contemplated by this sentence shall be revocable by the Lessee and shall be sufficient if such notice sets forth an approximate date on which a particular refunding is to occur; and provided, further, that the Lessee shall give the Owner Participant at least three Business Days' irrevocable notice prior to the Refunding Date of those terms of the Additional Bonds which the Lessee may determine as provided below. Subject to the conditions of this Section 2(b) and Section 10(c), the Owner Participant agrees to cooperate with the Lessee in order to accomplish the refundings requested by the Lessee. (4) In setting the terms of the Additional Bonds issued in connection with a refunding (including the Refunding Bonds), the Lessee, in its sole discretion, may determine the number of tranches of debt, the interest rates applicable thereto (reflective of actual market conditions) and the final maturities thereof (which shall be no later than July 2, 2017) and, based on such determination, the Owner Participant shall determine the principal amount, the sinking fund or amortization schedules and the average life applicable to all tranches of such Additional Bonds (provided that unless the Lessee shall have consented thereto the aggregate average life of all such Additional Bonds, together with the other Bonds which shall remain Outstanding, shall not vary from the aggregate average life reflected in the sinking fund schedule for the Initial Series Bonds by more than 18 months), so as to minimize the net present value of the Basic Rent payments by the Lessee over the Basic Lease Term, discounted on a semi-annual basis at an annual interest rate of 11 percent, while preserving Net Economic Return. (c) Reoptimization. Upon the occurrence of a Tax Law Change of the type referred to in subclause (C) of Section 3(e)(v) of the Facility Lease or any Tax Rate Change (and in addition to the reoptimization of any of the sinking fund or amortization schedules for the Bonds in connection with a refunding pursuant to Section 2(b)), subject to the satisfaction of the conditions set forth in Section 10(c) and this Section 2, the Owner Trustee, at the written request of the Lessee (with copies to be given to the Owner Participant and the Indenture Trustee), in the case of a Tax Law Change of the type referred to in this subsection (c), or at the written request of the Owner Participant (with copies to be given to the Lessee and the Indenture Trustee), in the case of a Tax Rate Change, given within two years after the date of such Tax Law Change or Tax Rate Change, as the case may be, shall reoptimize or cause the reoptimization of the sinking fund or amortization schedules for the Bonds of any series to the extent not inconsistent with the provisions, if any, of the Indenture and such Bonds and in accordance with, and in the manner contemplated by, Section 3 of the Facility Lease. Upon the receipt from the Owner Participant of the reoptimized sinking fund or amortization schedule for such Bonds and the other information referred to in Article Six of the Indenture, together with verification thereof if requested by the Lessee pursuant to Section 3(f)(ii) of the Facility Lease, the Owner Trustee shall deliver to the Indenture Trustee an Owner Trustee Request pursuant to said Article Six. The Owner Trustee, the Indenture Trustee, the Collateral Trust Trustee and Funding Corporation may rely on any reoptimized sinking fund or amortization schedules and other information furnished by the Owner Participant. (d) Cooperation. Subject to the applicable conditions to their obligations herein provided, each of the Lessee, the Owner Trustee, the Owner Participant and Funding Corporation agrees that it will cooperate in connection with any refunding or reoptimization contemplated herein and enter into such additional agreements and such supplements or amendments to or consents under the Transaction Documents as may reasonably be requested to effectuate the transactions contemplated in connection with any such refunding or reoptimization." (d) The following is added to the end of Section 6(b): "(6) No-Petition Agreement. Following the issuance of any Additional Bonds to or upon the order of Funding Corporation and prior to the 181st day following the payment in full of such Bonds and the discharge of the Collateral Trust Indenture in accordance with its terms, the Owner Participant agrees that it will not file a petition, or join in the filing of a petition, seeking reorganization, arrangement, adjustment or composition of, or in respect of, Funding Corporation under the Bankruptcy Code or any other applicable Federal or state law or the law of the District of Columbia." (e) Section 7(b) is amended as follows: (1) The introductory text of Section 7(b) is deleted and the following inserted in lieu thereof: "(b) Agreements of FNBC and the Owner Trustee. FNBC agrees, in its individual capacity as set forth in clauses (1), (3), (4) (as to FNBC) and (6), (7) and (8) (as to FNBC), and the Owner Trustee agrees as set forth in clauses (2) and (4) (as to the Owner Trustee) and (5), (6), (7) and (8) (as to the Owner Trustee) below, that:" (2) The following is added to the end of Section 7(b): "(8) No-Petition Agreement. Following the issuance of any Additional Bonds to or upon the order of Funding Corporation and prior to the 181st day following the payment in full of such Bonds and the discharge of the Collateral Trust Indenture, in accordance with its terms, each of FNBC and the Owner Trustee agrees that it will not file a petition, or join in the filing of a petition, seeking reorganization, arrangement, adjustment or composition of, or in respect of, Funding Corporation under the Bankruptcy Code or any other applicable Federal or state law or the law of the District of Columbia." (f) The following is added to the end of Section 8(b): "(3) No-Petition Agreement. Following the issuance of any Additional Bonds to or upon the order of Funding Corporation and prior to the 181st day following the payment in full of such Bonds and the discharge of the Collateral Trust Indenture in accordance with its terms, each of the Corporate Indenture Trustee and the Individual Indenture Trustee agrees that it will not file a petition, or join in the filing of a petition, seeking reorganization, arrangement, adjustment or composition of, or in respect of, Funding Corporation under the Bankruptcy Code or any other applicable Federal or state law or the law of the District of Columbia." (g) The following is added immediately following Section 8: "SECTION 8A. Representations, Warranties and Agreements of Funding Corporation. (a) Representations and Warranties. Funding Corporation represents and warrants that: (1) Due Organization. Funding Corporation is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware and has the corporate power and authority to carry on its business as presently conducted, own its properties, and enter into and perform its obligations under this Participation Agreement and each other Transaction Document to which it is, or is to become on or before the Refunding Date, a party. Funding Corporation has not failed to qualify to do business or be in good standing in any jurisdiction where failure to so qualify or be in good standing would materially and adversely affect its ability to perform any of its obligations under this Participation Agreement or any Transaction Document to which it is, or is to become on or before the Refunding Date, a party. (2) Due Authorization; Enforceability. The execution, delivery and performance by Funding Corporation of this Participation Agreement and each other Transaction Document to which it is, or is to become on or before the Refunding Date, a party have been duly authorized by all necessary corporate action on the part of Funding Corporation and do not require the consent or approval of the stockholders of Funding Corporation. Each of this Participation Agreement and each other Transaction Document to which it is, or is to become on or before the Refunding Date, a party has been duly executed and delivered by Funding Corporation and constitutes a legal, valid and binding agreement of Funding Corporation enforceable against it in accordance with its terms. (3) No Violation. Neither the execution, delivery or performance by Funding Corporation of this Participation Agreement or the other Transaction Documents to which it is a party, nor the consummation by Funding Corporation of the transactions contemplated hereby and thereby, nor compliance by Funding Corporation with the provisions hereof and thereof, conflicts or will conflict with, or results or will result in the breach of any provision of, the Certificate of Incorporation or By-Laws of Funding Corporation or any indenture, mortgage or agreement to which Funding Corporation is a party or by which it or its property is bound, or contravenes any Federal, Delaware or New York law applicable to it or requires any Governmental Action with respect to Funding Corporation under any Federal, Delaware or New York law applicable to it. Funding Corporation is not an "investment company", or a company "controlled" by an "investment company", within the meaning of the Investment Company Act. (4) No Other Business. Except as contemplated by this Participation Agreement and the other Transaction Documents, Funding Corporation has not engaged in any business or activity of any type or kind whatsoever. (5) Investment Representations. Funding Corporation will acquire each Bond to be acquired by it hereunder and under the Indenture solely for purposes of pledging such Bond to the Collateral Trust Trustee to secure Collateral Bonds issued from time to time under the Collateral Trust Indenture. Funding Corporation understands that no Bond to be acquired by it hereunder or under the Indenture will have been registered under the Securities Act and that each such Bond will bear the legend set forth in Section 2.08 of the Indenture. (6) ERISA. Funding Corporation will not acquire any Bond with the "plan assets" (within the meaning of regulations of the United States Department of Labor) of any "employee benefit plan" within the meaning of Section 3(3) of ERISA or any "plan" within the meaning of Section 4975(e)(1) of the Code. (b) Agreements. Funding Corporation agrees that: (1) Transfers of Bonds. Any transfer or assignment of any Bond acquired by it or of all or any part of Funding Corporation's interest hereunder or under any other Transaction Document shall be effected in compliance with the registration requirements of the Securities Act, or pursuant to an exemption therefrom, and on the express condition that the transferee, assignee or participant shall agree to be bound by the terms and provisions hereof and thereof. Funding Corporation will not sell, exchange or transfer any Bond to any other Person (other than to the Collateral Trust Trustee) unless such transferee delivers to the Lessee, the Owner Participant, the Owner Trustee and the Indenture Trustee a representation and warranty (and an opinion of counsel satisfactory to each such Person) to the effect that neither the transfer of such Bond to, nor the ownership of such Bond by, such transferee will cause such transferee, or any such Person, to be engaged in a "prohibited transaction", as defined in Section 406 of ERISA or Section 4975 of the Code, which is not at such time subject to an exemption contained in ERISA or in the rules, regulations, releases or bulletins adopted thereunder. (2) Redemption of Collateral Bonds. Except as provided in the Transaction Documents, Funding Corporation will not refinance or optionally redeem any Collateral Bond issued in connection with any Bond without the consent of the Lessor and Lessee. (3) Quiet Enjoyment. Funding Corporation acknowledges Section 6(a) of the Facility Lease. (4) No Other Business. During such time as any Bond acquired by it is Outstanding and held by the Collateral Trust Trustee as security for its obligations, Funding Corporation will not (i) engage in any business or activity other than in connection with the Transaction Documents, or (ii) amend or engage in any activity or take any action not permitted by Article THIRD, FOURTH or SIXTH of its Certificate of Incorporation, as in effect on the date of execution and delivery hereof, without, in each case, the consent of the Lessee, the Owner Participant, the Owner Trustee and the Indenture Trustee. (c) Agreements with the Indenture Trustee. Funding Corporation hereby (i) acknowledges and agrees that, in connection with this Participation Agreement, the Indenture Trustee shall have the benefits and protections of Article Eight of the Indenture and (ii) agrees that, to the extent it becomes a Holder, in the event of a conflict between the provisions of this Participation Agreement and the Indenture, the Indenture Trustee shall, as between the Indenture Trustee and Funding Corporation, be fully protected in relying on the express terms of the Indenture. (h) The following is added immediately following Section 8A: "SECTION 8B. Representations and Warranties of Collateral Trust Trustee. Collateral Trust Trustee represents and warrants that: (1) Due Organization. Collateral Trust Trustee is duly organized and validly existing in good standing under the laws of the state of New York and has the power and authority and legal right to enter into and perform its obligations under the Collateral Trust Indenture, this Participation Agreement, the Refunding Agreement and each other Transaction Document to which it is, or is to become on or before the Refunding Date, a party. (2) Due Authorization. The execution, delivery and performance by Collateral Trust Trustee of the Collateral Trust Indenture, this Participation Agreement, the Refunding Agreement and each other Transaction Document to which Collateral Trust Trustee is, or is to become on or before the Refunding Date, a party have been, or on or before the Refunding Date will have been, duly authorized by all necessary corporate action of Collateral Trust Trustee and each has been, or on or before the Refunding Date will have been, duly executed and delivered by Collateral Trust Trustee and do not and will not require the consent or approval of any stockholder or any trustee or holder of any of its indebtedness or other obligations, except such as have been, or on or before the Refunding Date will have been, duly obtained, given or accomplished. (3) Execution; Authentication of Bonds. (i) Each of the Collateral Trust Indenture, this Participation Agreement, the Refunding Agreement and each other Transaction Document to which Collateral Trust Trustee is, or is to become on or before the Refunding Date, a party has been, or on or before the Refunding Date will have been, duly executed and delivered by Collateral Trust Trustee and constitutes, or upon execution and delivery thereof will constitute, the legal, valid and binding agreement of Collateral Trust Trustee, enforceable against Collateral Trust Trustee in accordance with its terms; and (ii) each officer of Collateral Trust Trustee who shall authenticate any Refunding Collateral Bond to be issued pursuant to the Collateral Trust Indenture shall be, at the time of such authentication, an Authorized Officer. (4) No Violation. None of the execution and delivery by Collateral Trust Trustee of the Collateral Trust Indenture, this Participation Agreement, the Refunding Agreement or any other Transaction Document, the authentication by the Collateral Trust Trustee of any Refunding Collateral Bond, the consummation by Collateral Trust Trustee of the transactions contemplated hereby or thereby, and the compliance by Collateral Trust Trustee with the provisions hereof or thereof, contravenes or will contravene any Applicable Law governing Collateral Trust Trustee's banking or trust powers, or contravenes or results in a breach of, or constitutes a default under, Collateral Trust Trustee's Articles of Incorporation or By-laws or similar organizational documents, or requires any Governmental Action under any Federal law or law of its state of organization, except such as has been, or on or before the Refunding Date will have been, duly obtained, given or accomplished." (i) Section 9 is amended as follows: (1) 9(a)(5) is amended by deleting clause (ii) of the first paragraph thereof and inserting the following in lieu thereof: "(ii) as, on or before any Refunding Date or Reoptimization Date, in the case of Governmental Actions required in connection with the issuance of Bonds and Collateral Bonds on any such date, will have been duly obtained, given or accomplished, with true copies thereof delivered to the Owner Participant and the Indenture Trustee;" (2) Section 9(b)(1) is amended by adding the words "and the Collateral Trust Trustee" after the words "the Owner Trustee" in the first parenthetical thereof. (3) Section 9(b)(2) is amended by adding the words "the Collateral Trust Trustee" immediately after the words "Owner Participant" after each place where the words "Owner Participant" appear. (4) Section 9(b)(3) is amended by (A) deleting subparagraph (iv) and inserting the following in lieu thereof: "(iv) Bonds and Collateral Bonds. The Lessee will not, nor will it permit any of its Affiliates to, acquire any of the Bonds or Collateral Bonds without the written consent of the Owner Participant; provided, however, that the Lessee may purchase Bonds or Collateral Bonds without such consent so long as (A) the amount of Bonds or Collateral Bonds held at any time by the Lessee (and any Affiliates) does not exceed 25% in aggregate principal amount of the Bonds or Collateral Bonds, as the case may be, outstanding, (B) no such Bonds or Collateral Bonds are so acquired prior to 18 months following the date of the initial authentication and delivery of the Collateral Bonds, and (C) the Lessee shall have notified the Indenture Trustee or Collateral Trust Trustee, as the case may be, that it holds such Bonds or Collateral Bonds and, in determining whether or not the Holders of the requisite principal amount of the Bonds or Collateral Bonds outstanding under the Indenture or Collateral Trust Indenture, or the outstanding Bonds or Collateral Bonds of any series, have given any request, demand, authorization, direction, notice, consent or waiver under the Indenture or Collateral Trust Indenture or whether or not a quorum is present at a meeting of holders, all such Bonds and Collateral Bonds shall be disregarded and deemed not outstanding." and (B) adding the following to the end thereof: "(xviii) No-Petition Agreement. Following the issuance of any Additional Bonds to or upon the order of Funding Corporation and prior to the 181st day following the payment in full of such Bonds and the discharge of the Collateral Trust Indenture in accordance with its terms, the Lessee agrees that it will not file a petition, or join in the filing of a petition, seeking reorganization, arrangement, adjustment or composition of, or in respect of, Funding Corporation under the Bankruptcy Code or any other applicable Federal or state law or the law of the District of Columbia." (j) Section 10(c) is amended as follows: (1) The introductory text of Section 10(c) is deleted and the following inserted in lieu thereof: "(c) Conditions to Refunding or Reoptimization. In addition to the limitations set forth in Section 2(b) or 2(c), as the case may be, the obligation of the Owner Participant and, if Funding Corporation is being utilized in connection therewith, Funding Corporation to participate in a refunding or reoptimization of any Outstanding Bonds shall be subject to the fulfillment on or before the applicable Refunding Date or Reoptimization Date of the following conditions precedent (but in the case of a reoptimization, only the conditions specified in clauses (3), (5), (6) and (8) below) (each instrument, document, certificate, opinion or other writing to be in form and substance satisfactory to the Owner Participant and, if applicable, Funding Corporation):" (2) Paragraph (2) of Section 10(c) is deleted and the following inserted in lieu thereof: "(2) Bonds and Collateral Bond Transactions. (A) If Funding Corporation is being utilized in connection with such refunding, Funding Corporation shall have received proceeds from the sale of Refunding Collateral Bonds in an amount sufficient to make the Refunding Loan; (B) the Indenture Trustee shall have received (x) the proceeds from the sale of Refunding Bonds or, if Funding Corporation is being utilized in connection with such refunding, the proceeds of the Refunding Loan, in either case in an amount sufficient to provide for payment in full of the principal of, premium, if any, and interest on the Refunded Bonds, together with any other amounts then due and owing pursuant to the Indenture and (y) from the Lessee (as a special payment of Basic Rent, if the Refunding Date shall be a date other than January 2 or July 2 of any year), an amount equal to the accrued interest on the Refunded Bonds from, and including, the later of the date thereof or the date to which interest thereon shall have been paid to, but excluding, the applicable Refunding Date; (C) the Owner Trustee shall have received the Bonds to be executed by it in accordance with Section 2(b) of this Participation Agreement together with instructions from the Owner Participant to execute and deliver the same, and the Owner Trustee shall have executed, and the Indenture Trustee shall have authenticated and delivered, the Refunding Bonds; and (D) if Funding Corporation is being utilized in connection with such refunding, the Collateral Trust Trustee, as pledgee of such Refunding Bonds issued to or upon the order of Funding Corporation, shall have accepted the applicable supplemental indenture to the Collateral Trust Indenture subjecting such Refunding Bonds to the lien thereof." (3) Paragraph (4) of Section 10(c) is deleted and the following inserted in lieu thereof: "(4) Registration Statement. If the Additional Bonds or Refunding Collateral Bonds will be sold in a public offering, the Owner Participant and the Owner Trustee shall have received an Officers' Certificate of the Lessee, dated the applicable Refunding Date, to the effect that, on the date it becomes effective and on the Refunding Date, the Registration Statement relating to such Additional Bonds or Collateral Bonds did not and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading." (4) Paragraph (5) of Section 10(c) is deleted and the following inserted in lieu thereof: "(5) Opinions of Counsel. If Funding Corporation is being utilized in connection with such refunding, the Owner Participant, the Owner Trustee and the Indenture Trustee shall have received a favorable opinion of Reid & Priest LLP, as counsel for Funding Corporation, dated the Refunding Date or Reoptimization Date, as the case may be, and addressed to the Owner Participant, Owner Trustee, and the Indenture Trustee, addressing such matters relating to the transactions in connection with the Refunding Bonds to be issued on such date, or, in the case of a reoptimization, the adjustments to the sinking fund or amortization schedules of Outstanding Bonds to take place on such date, as the Owner Participant, the Owner Trustee or the Indenture Trustee may reasonably request. The Owner Participant, the Owner Trustee and the Indenture Trustee shall have received favorable opinions of the Owner Participant's Special Counsel, Owner Trustee's Counsel, Owner Participant's Special Louisiana Counsel, Lessee's Counsel and Lessee's Special Counsel, each dated the applicable Refunding Date or Reoptimization Date, and addressing such matters relating to the transactions in connection with the Refunding Bonds to be issued on such date, or, in the case of a reoptimization, the adjustments to the sinking fund or amortization schedules of Outstanding Bonds to take place on such date, as the Owner Participant, the Owner Trustee or the Indenture Trustee may reasonably request. The Owner Participant shall have also received an opinion of Owner Participant's Special Tax Counsel, dated the applicable Refunding Date or Reoptimization Date, and addressed to the Owner Participant, that the issuance of the Refunding Bonds to be issued and the consummation of the other transactions to be consummated on such date shall not result in any adverse tax consequences to the Owner Participant. Notwithstanding the foregoing provisions of this Section 10(c)(5), on any Reoptimization Date which is not a Refunding Date, the opinions of Owner Trustee's Counsel and Owner Participant's Special Louisiana Counsel" shall not be required. (5) Paragraph (6) of Section 10(c) is amended by inserting the words "or Collateral Bond" immediately after the word "Bond". (6) Paragraphs (7) and (8) of Section 10(c) are deleted and the following inserted in lieu thereof: "(7) Receipt of Documents. The Owner Participant and the Owner Trustee shall have received copies of, and shall be entitled to rely upon, all documents, certificates, agreements and opinions furnished by or on behalf of the Lessee and, if applicable, Funding Corporation pursuant to the Underwriting Agreement. If Funding Corporation is being utilized in connection with such refunding, Funding Corporation and the Collateral Trust Trustee shall have received copies of all documents previously delivered to the Indenture Trustee pursuant to Section 10(a). (8) Representations and Warranties. In the case of Funding Corporation, the representations and warranties of the Owner Participant, FNBC and the Owner Trustee, and the Lessee set forth in subclauses (1) through (4) and (9) of Section 6(a), subclauses (1) through (10) of Section 7(a), and subclauses (1) through (5), (10), (11), (12), (15), (16) and (19) of Section 9(a), respectively, shall be true and correct on and as of the applicable Refunding Date with the same effect as though made on and as of such applicable Refunding Date (with all references to the Closing Date in such representations and warranties being deemed to refer to the applicable Refunding Date); in the case of the Owner Participant, the representations and warranties of FNBC and the Owner Trustee, Funding Corporation, if applicable, and the Lessee set forth in Sections 7(a), 8A(a) and subclauses (1) through (6), (15), (16) and (19) of Section 9(a), respectively, shall be true and correct on and as of the applicable Refunding Date with the same force and effect as though made on and as of such Refunding Date (with all references to the Closing Date being deemed to refer to the applicable Refunding Date); the Owner Participant and, if Funding Corporation is being utilized in connection with such refunding, Funding Corporation shall have received appropriate certificates, dated the Refunding Date, to such effect (and, with respect to paragraph (3) above, from the Lessee); and the Owner Participant, FNBC and the Owner Trustee, the Indenture Trustee, the Lessee and, if applicable, Funding Corporation shall provide such additional representations and warranties as of the applicable Refunding Date as the Owner Participant or Funding Corporation shall reasonably request. (9) Satisfaction of Underwriting Agreement Conditions. The conditions to the obligations of Funding Corporation or the Owner Trustee, as the case may be, under the related Underwriting Agreement shall have been met or waived by Funding Corporation or the Owner Trustee, as the case may be." (k) Section 12 is amended as follows: (1) The first paragraph of Section 12(a) is amended by (A) deleting clause (i) and inserting the following in lieu thereof: "(i) Unit 3, the Undivided Interest, the Unit 3 Site, the Waterford Plant or the Waterford Plant Site or any part of any thereof, the Operating Agreement, the issuance or payment of the Bonds or the Collateral Bonds, this Participation Agreement or any other Transaction Document or Underwriting Agreement (including, without limitation, the performance, nonperformance or enforcement of any of the obligations and terms hereunder or thereunder)," ; (B) deleting subclause (E) from the parenthetical immediately preceding the proviso and inserting the following in lieu thereof: "(E) any claim of any Indemnitee incurred in the administration of this Participation Agreement or any other Transaction Document and not paid as Transaction Expenses or Refunding Expenses or included in Facility Cost and, if not included in Transaction Expenses or Refunding Expenses, the reasonable fees and disbursements of counsel and other professionals incurred in connection therewith." ; (C) deleting clause (3) in the proviso and inserting the following in lieu thereof: "(3) for any Transaction Expense to be paid by the Owner Trustee pursuant to Section 13(a) or Refunding Expenses to be paid by the Owner Trustee pursuant to the Refunding Agreement," ; and (D) deleting clause (5) in the proviso and inserting the following in lieu thereof: "(5) in the case of the Indenture Trustee, the Collateral Trust Trustee or Funding Corporation, for any Claim based upon an untrue statement or alleged untrue statement or omission or alleged omission in the Registration Statement or any document or agreement in connection with the sale of Additional Bonds or Collateral Bonds which is based upon information furnished to the Lessee or its agents by such party expressly for use therein," (2) The second paragraph of Section 12(a) is amended by deleting the second sentence and inserting the following in lieu thereof: "Nothing contained in this Participation Agreement shall be construed as constituting a guaranty by the Lessee of the principal of or premium, if any, or interest on the Bonds or the Collateral Bonds or of the residual value or useful life of the Undivided Interest." (3) Section 12(b)(1) is amended by deleting clauses (iv) through (vii) in the second paragraph thereof and inserting the following in lieu thereof: "(iv) the Transaction Documents or the issuance, refunding or refinancing of the Bonds or the Collateral Bonds pursuant to the Indenture or the Collateral Trust Indenture, or any other document executed and delivered in connection with the consummation or confirmation of the transactions contemplated by the Transaction Documents or any Indemnitee's interest in any of the foregoing, or the execution, issuance, delivery, acquisition or subsequent transfer of any of the foregoing (other than with respect to a reoptimization of the Bonds at the request of the Owner Participant pursuant to Section 2(c)), (v) the Indenture Estate or the property, or the income or other proceeds received with respect to the property, held by the Indenture Trustee under the Indenture, (vi) Franchise Taxes imposed on the Owner Participant or the Lessor to the extent provided in Section 12(b)(3), (vii) any Taxes imposed on Funding Corporation, or (viii) otherwise with respect to or in connection with the transactions contemplated by the Transaction Documents." (4) Section 12(b)(2) is amended by (a) adding the words "or Refunding Expenses" immediately after the words "Transaction Expenses" in clause (xi) thereof, and (b) by substituting "," for the word "or" between "Lessor" and "Indenture Trustee" and by adding "or the Collateral Trust Trustee" after "Indenture Trustee" in clause (vi) thereof. (5) The following is added to the end of Section 12: "(e) Funding Corporation. Section 12(b)(2) and (5) shall not apply to any Tax imposed on Funding Corporation or the trust estate under the Collateral Trust Indenture." (l) Paragraph (c) of Section 13 is deleted and the following inserted in lieu thereof: "(c) Post-Closing Expenses. The Lessee will pay (in addition to any amounts payable by it pursuant to Section 13(b)), as Supplemental Rent, (i) the ongoing fees, expenses, disbursements, administrative costs and other costs (including legal, accounting, pricing and other professional fees and expenses) of or incurred by the Owner Trustee, the Indenture Trustee, the Collateral Trust Trustee and the Owner Participant, including in connection with the issue, sale and purchase of Bonds and Collateral Bonds after the Closing Date, and (ii) all reasonable fees, expenses, disbursements and costs (including legal and other professional fees and expenses) incurred by the Owner Participant, the Owner Trustee, the Indenture Trustee and the Collateral Trust Trustee in connection with (a) any Default, Event of Default, Indenture Default or Indenture Event of Default, (b) the entering into or giving or withholding of any amendment, modification, supplement, waiver, consent or other action with respect to any Transaction Document or Financing Document, (c) any Event of Loss, Deemed Loss Event, Financial Event or Inchoate Financial Event, (d) any transfer of all or any part of the right, title and interest of the Indenture Trustee in, to and under the Transaction Documents (except to the extent arising from any transfer by the Owner Participant of its right, title and interest in, to and under any of the Transaction Documents or the Trust Estate pursuant to Section 14), (f) any Special Transfer, (g) any refunding or reoptimization pursuant to Section 2(b) or 2(c) (except to the extent (i) constituting Transaction Expenses, (ii) that the fees, expenses, disbursements and costs of the Owner Participant in connection with any refunding or reoptimization shall exceed $50,000, or (iii) arising from any reoptimization in connection with a Tax Rate Change), (h) any removal or replacement of the Owner Trustee and (i) any amendment to a Decommissioning Trust Agreement." (m) Section 19 is amended and restated as follows: "SECTION 19. Notices, etc. All communications, notices and consents provided for herein shall be in writing, including telex, telecopy or other wire transmission containing a request for assurance of receipt in a manner typical with respect to communications of that type, or mailed by registered or certified mail, and shall be addressed (i) if to the Owner Participant, at the address for notices set forth on Schedule 1; (ii) if to FNBC or the Owner Trustee, at 210 Baronne Street, New Orleans, Louisiana, 70112, Attention: Corporate Trust Department; (iii) if to IT or the Indenture Trustee, at _______________; (iv) if to Funding Corporation, c/o National Corporate Research, Ltd., 19 East Loockerman Street, Dover, Delaware 19901; (v) if to the Collateral Trust Trustee, _______________________; and (vi) if to the Lessee, at 317 Baronne Street, New Orleans, Louisiana 70112, Attention: Treasurer, or at such other address as any party (or its successors or permitted assigns hereunder) hereto may from time to time designate by notice duly given in accordance with the provisions of this Section to the other parties hereto. All such communications, notices and consents given in the manner provided above shall be effective (x) if sent by telex, telecopy or other wire transmission, on the date of transmission thereof, or (y) if sent by mail, three Business Days after being mailed." (n) Schedule 5 to the Participation Agreement is amended to include the additional Pricing Assumptions set forth in Schedule 1 hereto. (o) Appendix A to the Participation Agreement is hereby amended as set forth in Schedule A-1 to Appendix A attached hereto. ARTICLE TWO MISCELLANEOUS Section 2.01. Execution. This PA Amendment No. 1 may be executed in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. Section 2.02. Governing Law. This PA Amendment No. 1 has been negotiated and delivered in the State of New York and shall be governed by, and be construed in accordance with, the laws of the State of New York. Section 2.03. Concerning the Owner Trustee. FNBC is entering into this PA Amendment No. 1 solely as Owner Trustee under the Trust Agreement and not in its individual capacity. Anything herein to the contrary notwithstanding, all and each of the agreements and obligations herein made or undertaken on the part of the Owner Trustee are made or undertaken not as personal agreements of FNBC, but are made and undertaken solely for the purpose of binding only the Trust Estate and nothing contained in this Participation Agreement shall entitle any person to any claim against FNBC in its individual capacity or any of its assets. IN WITNESS WHEREOF, the parties hereto have caused this PA Amendment No. 1 to be duly executed by their respective officers thereunto duly authorized. ESSL 2, INC., as Owner Participant By Name: Title: W3A FUNDING CORPORATION By Name: Title: FIRST NATIONAL BANK OF COMMERCE, not in its individual capacity, but solely as Owner Trustee under the Trust Agreement By Name: Title: BANKERS TRUST COMPANY, as Corporate Indenture Trustee and Collateral Trust Trustee By Name: Title: STANLEY BURG, not in his individual capacity but solely as Individual Indenture Trustee LOUISIANA POWER & LIGHT COMPANY, as Lessee By Name: Title: Schedule 1 Pricing Assumptions Basic Rent, Casualty Values and Special Casualty Values, as set forth in the Facility Lease, as amended by Lease Supplement No. 1, dated as of _________ __, 1996, for dates occurring after the Refunding Date set forth below, have been computed on the basis of the following additional Pricing Assumptions which hereby supplement and amend Schedule 5 to the Participation Agreement: 1. Refunding Date: ___________________ __, 199_ 2. Interest Rate and Amortization of 199_ Bonds: See Supplemental Indenture No. 2, dated as of _____________, 199_ 3. Refunding Expenses: $____________ paid by the Owner Trustee on the Refunding Date from funds provided by the Owner Participant (amortized on a straight-line basis during the period commencing on the Refunding Date and ending on the last day of the Basic Lease Term). 4. Accrued Interest: $____________ paid by the Owner Trustee on the Refunding Date as interest from _________ _, 199_ to the Refunding Date on the Initial Series Bonds which are redeemed on the Refunding Date. 5. Premium: $____________ paid by the Owner Trustee on the Refunding Date in respect of the premium on the Initial Series Bonds redeemed on the Refunding Date. 6. ____ Bonds: $_____________ issued by the Owner Trustee in accordance with the Refunding Agreement, Supplemental Indenture No. 2, dated as of ________ _, 199_, and other Transaction Documents and not in excess of 105% of the outstanding principal amount of the Initial Series Bonds as of the Refunding Date. 7. Additional Equity Investment: $____________ funded by the Owner Trustee or the Owner Participant, as the case may be, on the Refunding Date. 8. Supplemental Rent: $_____________ paid by the Lessee on the Refunding Date. 9. Owner Participant's Marginal State Tax Rate(s): 9.5281%; 9%, beginning in fiscal year 1991. 10. Owner Participant's Marginal Federal Tax Rate(s): 34%; 35%, beginning in fiscal year 1991. 11. Tax Payment Method(s): 90/10; 93/7, beginning in fiscal year 1992; 97/3, beginning in fiscal year 1993; 100/0, beginning in fiscal year 1994. SCHEDULE A-1 TO APPENDIX A (Definitions) Appendix A ("Definitions") to the Participation Agreement and the other Transaction Documents (as defined therein) is hereby amended as follows: (a) The following definitions are deleted from Appendix A: "Authenticating Agent", "Authorized Agent", "Bond Registrar", "Initial Interest Payment Date", "Paying Agent", "Place of Payment", "Predecessor Bonds", "Regular Record Date" and "Special Record Date". (b) The following definitions are added to Appendix A: (1) "Collateral Bonds" shall mean all bonds, notes and other evidences of indebtedness from time to time issued and outstanding under the Collateral Trust Indenture. (2) "Collateral Trust Indenture" shall mean (x) in respect of the refunding of the Initial Series Bonds, the Collateral Trust Indenture, dated as of __________ __, 199_, among the Lessee, Funding Corporation and the Collateral Trust Trustee, and (y) in respect of any refunding from time to time of Additional Bonds pursuant to Section 2(b) of the Participation Agreement, the related collateral trust indenture, in form and substance satisfactory to the Owner Participant, among the Lessee, Funding Corporation and the Collateral Trust Trustee. (3) "Collateral Trust Trustee" shall mean (x) in respect of the Collateral Trust Indenture entered into in connection with the refunding of the Initial Series Bonds, ____ and its successors or assigns, and (y) in respect of any Collateral Trust Indenture utilized in connection with the refunding of Additional Bonds pursuant to Section 2(b) of the Participation Agreement, the bank or trust company acting as trustee thereunder and its successors or assigns. (4) "Funding Corporation" shall mean (x) in respect of the refunding of the Initial Series Bonds, W3A Funding Corporation, a Delaware corporation, and (y) in respect of any refunding of Additional Bonds pursuant to Section 2(b) of the Participation Agreement, any special-purpose entity that issues Collateral Bonds to provide funds to refund such Additional Bonds. (5) "Refunding Agreement" shall mean the Refunding Agreement No. __, dated as of __________, among the Owner Participant, the Owner Trustee, Funding Corporation, the Indenture Trustee, the Collateral Trust Trustee and the Lessee. (6) "Refunding Collateral Bonds" shall mean any one or more series of Collateral Bonds issued and sold by Funding Corporation, a portion of the proceeds of which will be applied to the refunding of the Initial Series Bonds or any Additional Bonds. (7) "Refunding Expenses" shall have the meaning set forth in the Refunding Agreement. (8) "Refunding Loan" shall have the meaning set forth in Section 2(b) of the Participation Agreement. (c) The following definitions in Appendix A are revised as set forth below: (1) The definition of "Indemnitees" is amended and restated as follows: "Indemnitees" shall mean FNBC, the Owner Trustee, the Corporate Indenture Trustee, the Individual Indenture Trustee and the Collateral Trust Trustee, each in their individual and fiduciary capacities, the Owner Participant, Funding Corporation, the Trust, the Trust Estate, the Indenture Estate, the indenture estate under the Collateral Trust Indenture, any Affiliate of any of the foregoing and the respective successors, assigns, agents, shareholders, officers, directors or employees of any of the foregoing. (2) The definition of "Net Economic Return" is hereby amended and restated to be as follows: "Net Economic Return" shall mean: (i) the net after-tax economic yield expected by the Owner Participant as of the date of the initial authentication and delivery of the 199_ Bonds (as defined in the Indenture) with respect to the Undivided Interest, calculated using the Assumptions and the computations of Basic Rent, Casualty Values and Special Casualty Values derived therefrom (the "Schedules and Assumptions") as such yield shall be adjusted pursuant to and in accordance with Section 3 of the Facility Lease and as agreed between the Lessee and the Owner Participant; and (ii) the sum of after-tax cash flow over the Basic Lease Term at least equal to that expected by the Owner Participant as of the date of the initial authentication and delivery of the 199_ Bonds calculated using the Schedules and Assumptions (the "Original After-Tax Cash Flow"); and (iii) the same general pattern of after-tax Earnings originally expected by the Owner Participant as of the date of the initial authentication and delivery of the 199_ Bonds calculated using the Schedules and Assumptions. Notwithstanding the above, nothing in this definition shall be construed to obligate the Lessee to restore any portion of a reduction in Earnings where such portion of the reduction is due to events other than changes in Basic Rent provided for in the Transaction Documents, including, by example, changes in Financial Accounting Standards Board Statement No. 13 occurring after the date of the initial authentication and delivery of the ______ Bonds. For the purposes of this definition, the Assumptions shall be deemed to include the assumptions that (i) the Owner Participant is fully taxable during the entire Basic Lease Term (provided, however, that nothing in this definition or the Participation Agreement shall be construed to be a representation by the Owner Participant as to the actual residual value assumed by the Owner Participant for purposes of calculating its earnings according to Financial Accounting Standards Board Statement No. 13 accounting or for any other purpose) and (ii) none of the equity investment is comprised of borrowed funds. (3) The definition of "Officers' Certificate" is amended and restated as follows: "Officers' Certificate" shall mean a certificate signed by the President or any Vice President and by the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Person with respect to which such term is used. (4) The definition of "Registration Statement" is amended and restated as follows: "Registration Statement" shall mean a registration statement, including all exhibits and all documents incorporated in such registration statement by reference, filed with the SEC under the Securities Act with respect to (x) in the case of the transactions contemplated to occur on the Closing Date, the offer, issue and sale of the Initial Series Bonds, and (y) in the case of the transactions contemplated to occur on any Refunding Date, the offer, issue and sale of any Refunding Collateral Bonds or Additional Bonds. (5) The definition of "Responsible Officer" is amended by adding the following after the words "shall mean" in the first line thereof: (i) when used with respect to the Trustee, any officer within the Corporate Trust Office including any Vice President, Assistant Vice President, Secretary, Assistant Secretary, Managing Director or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge and familiarity with the particular subject, and (ii) and by adding word "other" after the words "agreement or obligation of any" in the second line thereof. (6) The definition of "Transaction Documents" is amended by adding the words" and the Collateral Trust Indenture, the Refunding Agreement and the Collateral Bonds" after the word "Bonds". (7) The definition of "Underwriting Agreement" is amended and restated as follows: "Underwriting Agreement" shall mean (x) with respect to the Initial Series Bonds, Underwriting Agreement No. [See Additional Information], dated September 21, 1989, among the Owner Trustee, the Lessee, and the underwriter or underwriters for the Initial Series Bonds, and (y) with respect to any Refunding Collateral Bonds or Additional Bonds, the underwriting agreement among the Lessee, Funding Corporation or the Owner Trustee (as the case may be), and the underwriter or underwriters for such Collateral Bonds or Additional Bonds relating to the purchase, sale and delivery thereof. EX-4 8 Exhibit 4(i)-4 AMENDMENT NO. 1 dated as of , 1996 to TAX INDEMNIFICATION AGREEMENT No. [1,2,3] dated as of September 1, 1989 Between ESSL 2, INC. Beneficiary under Trust Agreement No. [1/2/3,] dated as of September 1, 1989 with FIRST NATIONAL BANK OF COMMERCE AS OWNER TRUSTEE, Lessor, and LOUISIANA POWER & LIGHT COMPANY Lessee SALE AND LEASEBACK OF AN UNDIVIDED INTEREST IN UNIT NO. 3 OF THE WATERFORD STEAM ELECTRIC GENERATING STATION AMENDMENT NO. 1, dated as of , 1996 ("TIA Amendment No. 1"), to TAX INDEMNIFICATION AGREEMENT No. [1/2/3,] dated as of September 1, 1989, between ESSL 2 INC., a Delaware corporation (the "Owner Participant"), beneficiary under the Trust Agreement, with FIRST NATIONAL BANK OF COMMERCE, a national banking association, not in its individual capacity, but solely as Owner Trustee under the Trust Agreement (the "Lessor") and LOUISIANA POWER & LIGHT COMPANY, a Delaware corporation (the "Lessee"). Capitalized terms not otherwise defined herein shall have the respective meanings specified in Appendix A to Facility Lease No. [1/2/3,] dated as of September 1, 1989, between the Lessor and the Lessee, as amended by Lease Supplement No. 1 thereto, dated as of the date hereof and as otherwise modified, amended or supplemented pursuant to the terms thereof (the "Facility Lease") or the Refunding Agreement, dated as of , 1996, among the Owner Participant, the Lessor, W3A FUNDING CORPORATION, as Funding Corporation, Banker's Trust Company, not in its individual capacity but solely as successor Corporate Indenture Trustee under Indenture No. [1/2/3] and Stanley Burg, not in his individual capacity but solely as successor Individual Indenture Trustee under Indenture No. [1/2/3,] and the Lessee (the "Refunding Agreement"). WHEREAS, pursuant to Participation Agreement No. [1/2/3], the Lessor agreed to purchase the Undivided Interest with funds provided by the Owner Participant and by the issuance of the Initial Series Bonds; WHEREAS, the Lessor executed the Facility Lease pursuant to which the Lessor has leased the Undivided Interest to the Lessee; WHEREAS, the Lessee and the Owner Participant have agreed (a) for the Owner Participant [to make an additional equity investment and] to cause the refinancing of the Initial Series Bonds through the issuance of the 1996 Bonds in amounts which, when added to [the equity investment made by the Owner Participant and] any Supplemental Rent paid by the Lessee, will be sufficient to redeem the Initial Series Bonds, including any premium and accrued interest thereon and (b) [for the Owner Participant to provide funds to the Lessor to permit the Lessor to pay the Refunding Expenses]; and WHEREAS, the Owner Participant and the Lessee have heretofore executed Tax Indemnification Agreement No. [1/2/3] and desire to amend Tax Indemnification Agreement No. [1/2/3] as hereinafter provided to clarify their respective rights and obligations arising from the transactions contemplated by Refunding Agreement No. [1/2/3] (the "Refunding"); NOW, THEREFORE, THIS AGREEMENT WITNESSETH: Tax Indemnification Agreement No. [1/2/3] is hereby amended, effective upon the execution and delivery of this Agreement, as follows: 1. Section l.1(h) thereof is amended by (i) deleting the word "and" before "(vii)" and (ii) inserting the words ", and (viii) any Supplemental Rent paid in connection with the Refunding" immediately after the words "retained by the Owner Participant". 2. Section 1.1(i) thereof is amended by (i) inserting the words "through 1992 and 35% for each taxable year" immediately after the words "each taxable year" and immediately before the word "thereafter". 3. Section 1.1(o) thereof is amended by inserting the words ", Retirement Premium Deduction, Refunding Amortization Deductions" immediately after the words "the Amortization Deductions" and immediately before the words "and the Interest Deductions". 4. Section 1.1(p) thereof is amended by inserting the words "and the Refunding Date will be the date set forth in Schedule 1 to PA Amendment No. 1" immediately after the words "Participation Agreement" and immediately before the period ending the sentence. 5. Section 1.1 thereof is amended by adding the following tax assumptions after Section 1.1(p): "(q) The Owner Participant will be allowed a deduction for the premium paid with respect to the Refunded Bonds in the taxable year of the Owner Participant in which such premium is paid or accrued (the "Retirement Premium Deduction"); and the Owner Participant will be entitled to take the Retirement Premium Deduction into account in computing its consolidated federal income tax liability in accordance with the accrual method of tax accounting. (r) The Owner Participant will be allowed deductions for amortization of an amount equal to the Refunding Expenses to the extent payable by the Lessor pursuant to Section 5 of the Refunding Agreement computed on a straight- line basis over a term from the Refunding Date to the end of the Basic Lease Term (the "Refunding Amortization Deductions"); and the Owner Participant will be entitled to take the Refunding Amortization Deductions into account in computing its consolidated federal income tax liability." 6. The last sentence of section 1.1 thereof is amended by replacing "(p)" immediately after the words "The foregoing clauses (a) through" with "(r)". 7. Section 1.2(1)(d) thereof is amended by inserting the words "the Retirement Premium Deduction, the Refunding Amortization Deductions" immediately after the words "the Amortization Deductions," and immediately before the words "or any corresponding deduction or credit". 8. Section 1.2(1) is amended by adding the following representation after Section 1.2(1)(e): "(f) The Owner Participant will be entitled to deduct the Retirement Premium Deduction and the Refunding Amortization Deductions." 9. Section 3.1(a)(1)(A) thereof is amended by inserting the words "(except the Refunding Agreement and any related amendments to the Transaction Documents)" (i) immediately after the words "the Transaction Documents" and immediately before the words "or an act", (ii) immediately after the words "the Transaction Documents" and immediately before the words ") by (i)" and (iii) immediately after the words "the Transaction Documents" and immediately before words ", shall each be an act". 10. Section 3.1(a)(1) thereof is amended by deleting the word "or" at the end of paragraph (F) thereof, inserting the word "or" at the end of paragraph (G) thereof and adding the following paragraph after paragraph (G) thereof: "(H) the presence of Funding Corporation, or any successor or assign thereof, in the transactions contemplated by the Transaction Documents," 11. Section 3.1(a)(2)(A) thereof is amended by inserting the words "the Retirement Premium Deduction, the Refunding Amortization Deductions", immediately after the words "the Amortization Deductions," and immediately before the words "or the Interest Deductions". 12. Section 6(a) thereof is amended by inserting the words ", the Retirement Premium Deduction, the Refunding Amortization Deductions" immediately after the words "the Amortization Deductions" and immediately before the words "or the Interest Deductions". 13. Section 6(b) thereof is amended by inserting the words ", the Retirement Premium Deduction, the Refunding Amortization Deductions" immediately after the words "the Amortization Deductions" and immediately before the words "or the Interest Deductions". IN WITNESS WHEREOF, the Owner Participant and the Lessee have each caused this TIA Amendment No. 1 to be duly executed in New York, New York by their respective officers thereunto duly authorized as of the date first set forth above. LOUISIANA POWER & LIGHT COMPANY Name: Title: ATTEST: ESSL 2 INC. Name: Name: Title: Title: ACKNOWLEDGMENT STATE OF NEW YORK ) ) SS.: COUNTY OF NEW YORK ) On this ____ day of _________, ____, before me, the undersigned Notary Public, duly commissioned and qualified within the State and County aforesaid, personally came and appeared _____________________, who being by me duly sworn did say that he is a ___________________ of ESSL 2 INC., a Delaware corporation, and that said instrument was signed on behalf of said corporation by authority of its Board of Directors and that he acknowledged said instrument to be the free act and deed of said corporation. Notary Public My Commission Expires: _________ __, ____ ACKNOWLEDGMENT STATE OF NEW YORK ) ) SS.: COUNTY OF NEW YORK ) On this ____ day of _________, ____, before me, the undersigned Notary Public, duly commissioned and qualified within the State and County aforesaid, personally came and appeared _____________________, who being by me duly sworn did say that he is a ___________________ of LOUISIANA POWER & LIGHT COMPANY, a Delaware corporation, and that said instrument was signed on behalf of said corporation by authority of its Board of Directors and that he acknowledged said instrument to be the free act and deed of said corporation. Notary Public My Commission Expires: _________ __, ____ EX-4 9 Exhibit 4(k) REFUNDING AGREEMENT NO. [1/2/3] dated as of ____________ __, 199_ among ESSL 2, INC., as Owner Participant, W3A FUNDING CORPORATION, as Funding Corporation, FIRST NATIONAL BANK OF COMMERCE, as Owner Trustee, BANKERS TRUST COMPANY, as [successor] Corporate Indenture Trustee under Indenture of Mortgage and Deed of Trust No. [1/2/3], dated as of September 1, 1989, as supplemented, with the Owner Trustee, and as Collateral Trust Trustee under Collateral Trust Indenture dated as of , , with the Lessee and Funding Corporation, STANLEY BURG, as successor Individual Indenture Trustee under Indenture of Mortgage and Deed of Trust No. [1/2/3], dated as of September 1, 1989, as supplemented, with the Owner Trustee, and LOUISIANA POWER & LIGHT COMPANY, as Lessee THIS REFUNDING AGREEMENT NO. [1/2/3], dated as of _________ __, 199_, among ESSL 2, INC., as Owner Participant (such term and all other capitalized terms used herein and not defined herein having the respective meanings specified in Appendix A to the Participation Agreement referred to below, as modified by Schedule A-1 thereto), W3A FUNDING CORPORATION, as Funding Corporation, FIRST NATIONAL BANK OF COMMERCE, not in its individual capacity but solely as Owner Trustee, BANKERS TRUST COMPANY, as [successor] Corporate Indenture Trustee under the Indenture and as Collateral Trust Trustee under the Collateral Trust Indenture, STANLEY BURG, not in his individual capacity but solely as [successor] Individual Indenture Trustee under the Indenture, and LOUISIANA POWER & LIGHT COMPANY, as Lessee. W I T N E S S E T H: WHEREAS, the parties to this Refunding Agreement, other than Funding Corporation and the Collateral Trust Trustee, are parties to Participation Agreement No. [1/2/3], dated as of September 1, 1989 (the "Participation Agreement"), among the Owner Participant, the Owner Trustee, the Corporate Indenture Trustee, the Individual Indenture Trustee and the Lessee; and WHEREAS, the Initial Series Bonds were issued by the Owner Trustee in connection with the acquisition of the Undivided Interest; and WHEREAS, Section 2(b) of the Participation Agreement provides for a refunding of Outstanding Bonds upon satisfaction of the conditions set forth in Sections 2 and 10(c) of the Participation Agreement and Section 2.05 of the Indenture; and WHEREAS, the Lessee has requested such a refunding; and WHEREAS, Section 3(e) of the Facility Lease provides for an adjustment to Basic Rent and the Value Schedules in connection with the issuance of any Refunding Bonds; and WHEREAS, the Lessee and the Owner Participant have agreed for the Owner Participant to make an additional equity investment and to cause the refinancing of the Outstanding Initial Series Bonds through the issuance of Refunding Bonds and other Additional Bonds in amounts sufficient to redeem such Outstanding Initial Series Bonds and finance certain transaction expenses associated therewith and the premium thereon, and accordingly have agreed that the refunding contemplated by this Agreement will require certain amendments to the Transaction Documents; and WHEREAS, on ________ __, 199__, at the direction of the Lessee and the Owner Participant, the Owner Trustee gave the Indenture Trustee notice of redemption of the Initial Series Bonds on ______, 199__ (the "Refunding Date"), and the Indenture Trustee gave notice of such redemption to the Holders of such Bonds on ___, 199__, which notice provided, in accordance with Section 5.05 of the Indenture, that such redemption is conditional upon the receipt by the Indenture Trustee, on or prior to the Refunding Date, of money sufficient to pay the principal of, premium, if any, and interest on the Initial Series Bonds then outstanding and that, if such money shall not have been so received, said notice shall be of no force and effect and the Owner Trustee shall not be required to redeem such Outstanding Initial Series Bonds; and WHEREAS, the parties hereto wish to effect the refunding of the Outstanding Initial Series Bonds through a refunding transaction in which, among other things, Funding Corporation will issue Collateral Bonds to the public and will apply a portion of the proceeds thereof as a Refunding Loan for the account of the Owner Trustee for the refunding in whole of, the Outstanding Initial Series Bonds, such loan to be evidenced by Additional Bonds ("199_ Bonds") issued by the Owner Trustee to or upon the order of Funding Corporation; and WHEREAS, the Lessee proposes to enter into an Underwriting Agreement, dated _________ (the "Refunding Underwriting Agreement"), with Funding Corporation, Morgan Stanley & Co. Incorporated and Citicorp Securities, Inc. (the "Refunding Underwriters"); and WHEREAS, in connection with the aforesaid, it will be necessary for the Owner Participant, the Lessee, Funding Corporation, the Owner Trustee, the Indenture Trustee and the Collateral Trust Trustee, subject to the conditions set forth herein, to enter into Amendment No. 1, dated as of _______, 199_, to the Participation Agreement ("PA Amendment No. 1"), to make certain amendments and add certain provisions thereto; and WHEREAS, Section 10.01 of the Indenture provides, among other things, that the parties to the Indenture may, without consent of the Holders of any Bonds, execute a Series Supplemental Indenture in order to evidence the issuance of and to provide the terms of Additional Bonds and to make certain changes to the Indenture; and WHEREAS, subject to the conditions set forth herein, the Owner Trustee and the Indenture Trustee will execute Supplemental Indenture No. 2 to the Indenture, dated as of _________ __, 199_ ("Supplemental Indenture No. 2"), providing, among other things, for the issuance of 199_ Bonds with the respective terms and conditions specified therein; and WHEREAS, Section 10.03 of the Indenture provides, among other things, that without the consent of the Holders of any Bonds, the Indenture Trustee (x) shall, upon receipt of a written instruction from the Lessee and the Owner Trustee, consent to certain amendments of the Facility Lease and (y) may join in certain amendments of the Participation Agreement; and WHEREAS, subject to the conditions set forth herein, the Owner Trustee and the Lessee intend to execute Lease Supplement No. 1 to the Facility Lease, dated as of _________ __, 199_ ("Lease Supplement No. 1"), to make certain amendments to the Facility Lease; and WHEREAS, subject to the conditions set forth herein, the Owner Participant and the Lessee intend to execute Amendment No. 1, dated as of _________ __, 199_ to the Tax Indemnification Agreement ("TIA Amendment No. 1") to amend certain provisions of the Tax Indemnification Agreement; and WHEREAS, Basic Rent and the Value Schedules, as set forth in Lease Supplement No. 1, will be adjusted to take into effect, among other things, the additional Tax Assumptions set forth in TIA Amendment No. 1 and the additional Pricing Assumptions set forth in Schedule 1 to PA Amendment No. 1; NOW, THEREFORE, in consideration of the premises and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE ONE REFUNDING TRANSACTIONS Section 1.01. Agreement of Funding Corporation. Subject to the satisfaction or written waiver of the terms and conditions hereof and of Section 2 and 10(c) of the Participation Agreement, on the Refunding Date, Funding Corporation shall make a Refunding Loan by paying to the Indenture Trustee for the account of the Owner Trustee immediately available funds in an amount equal to $__________, and shall receive the Owner Trustee's 199_ Bonds to evidence such Refunding Loan, as described in Section 1.02. The proceeds of the Refunding Loan shall be paid directly to a special account established by the Owner Trustee with the Indenture Trustee and shall be applied as set forth in Section 1.02. Section 1.02. Issuance of Refunding Bonds; Application of Proceeds. Subject to the satisfaction or written waiver of the terms and conditions hereof and of Sections 2 and 10(c) of the Participation Agreement and Section 2.05 of the Indenture, on the Refunding Date: (a)(i) the Lessee, the Owner Participant, Funding Corporation, the Owner Trustee, the Indenture Trustee, the Individual Indenture Trustee and the Collateral Trust Trustee shall enter into PA Amendment No. 1, (ii) the Lessee and the Lessor shall enter into Lease Supplement No. 1, (iii) the Owner Trustee, the Indenture Trustee and the Individual Indenture Trustee shall enter into Supplemental Indenture No. 2, (iv) the Lessee, Funding Corporation and the Collateral Trust Trustee shall enter into the Collateral Trust Indenture and, subject to satisfaction of the conditions therein set forth, Supplemental Indenture No. 1 thereto ("Collateral Trust Supplement"), and (v) the Lessee and the Owner Participant shall enter into TIA Amendment No. 1; (b)(i) the Owner Participant shall pay to the Owner Trustee an additional equity investment of $_________ (the "Additional Equity Investment"); (ii) the Lessee shall make a Supplemental Rent payment in the amount of $____________; and (iii) the Owner Trustee, on behalf of the Owner Participant, shall issue the 199_ Bonds in the principal amount of $ and apply the Refunding Loan, the Additional Equity Investment and the Supplemental Rent to redeem the Initial Series Bonds then Outstanding maturing in 2005 ("Series 2005 Bonds") for an amount equal to % of the outstanding principal amount thereof (such outstanding principal amount being $ ) plus accrued interest thereon and to redeem the Initial Series Bonds then Outstanding maturing in 2017 ("Series 2017 Bonds") for an amount equal to % of the outstanding principal amount thereof (such outstanding principal amount being $ ) plus accrued interest thereon. The Owner Participant shall pay the Additional Equity Investment and the Lessee shall pay the Supplemental Rent payment directly to the special account established by the Owner Trustee with the Indenture Trustee. Upon receipt of the Refunding Loan in the aggregate principal amount of $ and the payments of the Owner Participant and the Lessee described above, the Indenture Trustee, at the direction of the Owner Trustee shall (i) authenticate and deliver the 199_ Bonds of the series and in the aggregate principal amount of the Refunding Loan, and bearing interest at the rates per annum and having such other terms and conditions as set forth in Supplemental Indenture No. 2 and (ii) apply the Refunding Loan and the payments of the Owner Participant and the Lessee pursuant to clause (b) of this paragraph to the redemption of the Series 2005 Bonds and Series 2017 Bonds then outstanding. Upon issuance of the 199_ Bonds to Funding Corporation, Funding Corporation shall pledge such 199_ Bonds in accordance with the terms of the Collateral Trust Indenture. Section 1.03. Implementation. (a) Forms. The forms of PA Amendment No. 1, Supplemental Indenture No. 2, Lease Supplement No. 1, the Collateral Trust Indenture, the Collateral Trust Supplement and TIA Amendment No. 1 are attached hereto as Exhibits A, B, C, D, E and F, respectively. (b) Obligations of the Owner Participant. The Owner Participant hereby directs the Owner Trustee to execute and deliver this Refunding Agreement and, subject to the terms and conditions of Sections 2(b) and 10(c) of the Participation Agreement and Section 2.05 of the Indenture, the Owner Participant hereby agrees that, on the Refunding Date, it will execute and deliver TIA Amendment No. 1 and PA Amendment No. 1 and make the payments described in Section 1.02 and direct the Owner Trustee to (i) execute and deliver PA Amendment No. 1, Supplemental Indenture No. 2 and Lease Supplement No. 1 (collectively, with this Refunding Agreement and TIA Amendment No. 1, the "Refunding Documents") in substantially the forms of Exhibits A, B and C hereto, respectively, (ii) instruct the Indenture Trustee to consent to Lease Supplement No. 1, (iii) execute the 199_ Bonds as contemplated by the Refunding Documents and to request the Indenture Trustee (x) to authenticate and deliver the 199_ Bonds pursuant to Section 2.05 of the Indenture and (y) in view of the fact that Funding Corporation is to pledge such 199_ Bonds to the Collateral Trust Trustee, to cause such 199_ Bonds to be delivered directly to, and registered in the name of, the Collateral Trust Trustee, and (iv) execute and deliver all other agreements, instruments and certificates contemplated by the Transaction Documents and the Refunding Documents. (c) Instruction and Consent. Subject to satisfaction of the terms and conditions of Sections 2(b) and 10(c) of the Participation Agreement and Section 2.05 of the Indenture, (x) in accordance with Section 10.03(a) of the Indenture, the Lessee and the Owner Trustee hereby instruct the Indenture Trustee to consent, effective as of the Refunding Date, to Lease Supplement No. 1, and the Indenture Trustee hereby so consents, and (y) in accordance with Section 10.01 and 10.03 of the Indenture, the Owner Trustee and the Indenture Trustee hereby consent and agree to execute and deliver PA Amendment No. 1 and Supplemental Indenture No. 2 on the Refunding Date. The Lessee consents to the execution and delivery of Supplemental Indenture No. 2 by the Owner Trustee and the Indenture Trustee on the Refunding Date. (d) Recordations and Filings. The Lessee shall cause to be made the recordations and filings set forth in Schedule 1 hereto on or prior to the Refunding Date and represents that such filings and recordations are all the recordations and filings necessary to preserve, protect and perfect the Owner Trustee's right, title and interest in and to the Undivided Interest, the Ground Lease Property and under the Facility Lease, as amended by Lease Amendment No. 1, and the security interest of the Indenture Trustee in the Lease Indenture Estate under the Indenture, as amended by Supplemental Indenture No. 2. (e) Funding Corporation Consent. Pursuant to the Collateral Trust Indenture, Funding Corporation shall assign to the Collateral Trust Trustee on the Refunding Date all of Funding Corporation's right, title and interest in and to the 199_ Bonds, as security for Funding Corporation's obligations under the related Refunding Collateral Bonds and under the Collateral Trust Indenture. Accordingly, Funding Corporation hereby consents to the Owner Trustee's issuance of the 199_ Bonds directly to the Collateral Trust Trustee. [(f) Promissory Note; First Mortgage Bonds. The Lessee and the Owner Participant agree that a replacement Promissory Note dated the Refunding Date and reflecting the revisions to the Value Schedules contemplated by Lease Supplement No. 1 shall be delivered to the Owner Participant in exchange for the Promissory Note dated September 28, 1989 as contemplated by the last sentence of Section 16(a)(3) of the Participation Agreement. In addition, the Owner Participant shall surrender to the Lessee for retirement and cancellation First Mortgage Bonds in the principal amount of $ , as contemplated by the last sentence of Section 16(e)(4) of the Participation Agreement.] (g) Terms of 199_ Bonds. In accordance with Section 2(b) of the Participation Agreement, the Lessee hereby gives the Owner Participant irrevocable notice that the terms of the 199_ Bonds shall be as set forth in Exhibit B hereto. The Owner Participant hereby agrees to accept a notice period of fewer than five Business Days as contemplated by Section 2(b) of the Participation Agreement. ARTICLE TWO CONDITIONS TO REFUNDING TRANSACTIONS Section 2.01. Conditions to Obligations of Funding Corporation and Lessee. The respective obligations of Funding Corporation and the Lessee to take the actions specified in Sections 1.01 and 1.02 are subject to the satisfaction on or before the Refunding Date of the following conditions: (i) the Refunding Underwriting Agreement relating to the offer and sale to the public of $___________ aggregate principal amount of Secured Lease Obligation Bonds of Funding Corporation (the "Refunding Collateral Bonds") shall have been executed and delivered; (ii) the Refunding Underwriters shall have purchased the Refunding Collateral Bonds pursuant to the Refunding Underwriting Agreement; and (iii) the conditions set forth in Sections 2 and 10(c) of the Participation Agreement and in the Refunding Underwriting Agreement shall have been satisfied or waived in writing. Section 2.02. Conditions Precedent to Obligations of Owner Participant and Lessee. The obligations of the Owner Participant and the Lessee to take the actions specified in Article One hereof on the Refunding Date shall be subject to the following conditions precedent: (i) each of the representations and warranties set forth in Section 9(a)(1), (2), (3), (4), (5), (10), (11), (12), (15), (16), (19) and (20) of the Participation Agreement shall be true and correct as of the Refunding Date, provided that (a) all references therein to Closing Date shall be deemed to mean the Refunding Date, (b) the term Disclosure Documents shall be deemed to mean Lessee's latest Annual Report on Form 10-K filed with the SEC and all documents subsequently filed by the Lessee with the SEC pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act prior to the date of the execution and delivery of the Refunding Agreement, and (c) the references in clause (10) to June 30, 1989 shall be deemed to mean the last day of the fiscal quarter for which the most recent Quarterly Report on Form 10-Q has been filed with the SEC; and Lessee shall have delivered a certificate to such effect to the Owner Participant; and (ii) each of the representations and warranties of the Owner Participant set forth in Section 6(a)(1), (2), (3), (4) and (9) of the Participation Agreement shall be true and correct as of the Refunding Date, provided that all references therein to Closing Date shall be deemed to mean the Refunding Date; and the Owner Participant shall have delivered a certificate to such effect to the Lessee; (iii) each of the representations and warranties of FNBC and Owner Trustee set forth in Section 7(a)(1), (2), (3), (4), (5), (6), (7), (8), (9) and (10) of the Participation Agreement shall be true and correct as of the Refunding Date, provided that all references therein to Closing Date shall be deemed to mean the Refunding Date; and FNBC and the Owner Trustee shall have delivered a certificate to such effect to the Owner Participant and the Lessee; (iv) each of the representations and warranties of IT and the Indenture Trustee set forth in Section 8(a) of the Participation Agreement shall be true and correct as of the Refunding Date, provided that all references therein to Closing Date shall be deemed to mean the Refunding Date; and IT and the Indenture Trustee shall have delivered a certificate to such effect to the Owner Participant and the Lessee; (v) each of the representations and warranties of Funding Corporation in Section 8A of the Participation Agreement shall be true and correct and Funding Corporation shall have delivered a certificate to such effect to the Owner Participant and the Lessee. (vi) each of the representations and warranties of the Collateral Trust Trustee in Section 8B of the Participation Agreement shall be true and correct and the Collateral Trust Trustee shall have delivered a certificate to such effect to the Owner Participant and the Lessee. (vii) the Refunding Underwriting Agreement shall have been executed and delivered; (viii) the Refunding Underwriters shall have purchased the Refunding Collateral Bonds pursuant to the Refunding Underwriting Agreement; and (ix) the conditions set forth in Sections 2(b) and 10(c) of the Participation Agreement shall have been satisfied or waived in writing; provided, however, that the obligations of the Lessee shall not be subject to the conditions set forth in clause (i) above and the obligations of the Owner Participant shall not be subject to the conditions set forth in clause (ii) above. Section 2.03.Conditions to Obligation of Owner Trustee. The obligation of the Owner Trustee to issue and deliver the 199_ Bonds on the Refunding Date to the Collateral Trust Trustee, as assignee of Funding Corporation, in consideration of the Refunding Loan is subject to (x) the simultaneous performance by Funding Corporation of its obligations under Article One and the payment by the Owner Participant and the Lessee of the amounts provided in Section 1.02, (y) the satisfaction on or before the Refunding Date of the conditions set forth in Sections 2 and 10(c) of the Participation Agreement and Section 2.05 of the Indenture to the obligation of the Owner Trustee to participate in the transactions contemplated by this Refunding Agreement, and (z) receipt of a direction from the Owner Participant in conformance with Section 1.03. Section 2.04.Conditions to Obligation of Indenture Trustee. The obligation of the Indenture Trustee to take the action specified in Section 1.02 is subject to the satisfaction on or before the Refunding Date of the conditions set forth in Section 2.05 of the Indenture. ARTICLE THREE REFUNDING EXPENSES Section 3.01.Refunding Expenses. (a) Subject to the provisions of this Section 3.01, solely from funds provided by the Owner Participant, the Owner Trustee hereby agrees that it will pay when due, or reimburse any Person who has previously paid, the following costs and expenses ("Refunding Expenses"): (i) the reasonable legal fees and disbursements of the Owner Participant's Special Counsel (not to exceed $_______), the Owner Participant's Tax Counsel (not to exceed $______), the Owner Participant's Special Louisiana Counsel (not to exceed $ ), the Owner Trustee's Counsel (Louisiana and New York) and the Indenture Trustee's Counsel for their services rendered in connection with the execution and delivery of this Refunding Agreement and the other Refunding Documents and Financing Documents; (ii) all stenographic, printing, reproduction, and other reasonable out-of-pocket expenses (other than investment banking or brokerage fees) incurred in connection with the transactions contemplated by the Refunding Documents and Financing Documents and all other agreements, documents or instruments prepared in connection therewith (including all structuring computations and computerized lease analysis and travel related costs); (iii) all costs of issuance of the Refunding Collateral Bonds, including, without limitation, the costs of preparing the Refunding Underwriting Agreement, and all filing fees relating to any Registration Statement for the Refunding Collateral Bonds and the fees, expenses and disbursements of the law firms referred to in clause (i) above, and of counsel to the Refunding Underwriters, rating agency fees and the fees and commissions of the Refunding Underwriters; (iv) all fees of the Owner Trustee and the Indenture Trustee in connection with the review, execution and delivery of this Refunding Agreement and the other Refunding Documents; and (v) any other fees, expenses, disbursements and costs as the Lessee and the Owner Participant shall have agreed are payable pursuant to this Section 3.01(a). Subject to the provisions of paragraphs (b) and (c) below, funds for the payment of Refunding Expenses will be provided by the Owner Participant to the Owner Trustee and the Owner Trustee will promptly disburse such funds upon written authorization from the Owner Participant. The amount of Refunding Expenses payable by the Owner Trustee shall not exceed $____________. (b) Payments or reimbursements of Refunding Expenses shall be made (i) on the Refunding Date to the extent invoiced and approved by the Owner Participant on or prior to the Refunding Date, and (ii) to the extent not previously paid pursuant hereto as promptly as practicable, and in any event not later than 10 Business Days after being invoiced. Each party hereto shall use its best efforts to prepare, and cause any Person acting for it to prepare, and submit as soon as practicable and in any event not later than 30 days after the Refunding Date any invoice of such Person in respect of Refunding Expenses. Promptly after the payment of such Refunding Expenses, such adjustments to Basic Rent and the Value Schedules as are required by Section 3(e)(ii) of the Facility Lease shall be made. (c) Notwithstanding anything in this Section 3.01 to the contrary, in the event the transactions contemplated by this Refunding Agreement shall not be consummated, the Lessee shall pay or cause to be paid, and shall indemnify and hold harmless the Indenture Trustee, the Owner Trustee, Funding Corporation, the Owner Participant and the Collateral Trust Trustee with respect to all losses, costs and expenses whatsoever incurred by them as a result of the pursuit of such transactions, including, without limitation, all Refunding Expenses (which shall, in such an instance, be deemed to include, without limitation, all losses, costs and expenses whatsoever incurred by the Owner Participant pursuant to this Agreement and Section 7.01 of the Trust Agreement) unless, in the case of the Owner Participant, such failure to consummate shall result solely from the Owner Participant's default in making its investment as contemplated in Article One hereunder. Furthermore, in the event that the Refunding Expenses shall exceed the funds available to the Owner Trustee pursuant to paragraph (a) for the payment of Refunding Expenses, the Lessee shall pay or cause to be paid, and shall indemnify and hold harmless the Indenture Trustee, the Owner Trustee, Funding Corporation, the Owner Participant and the Collateral Trust Trustee with respect to, all such excess Refunding Expenses. ARTICLE FOUR MISCELLANEOUS Section 4.01.Execution. This Refunding Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. Section 4.02.Governing Law. This Refunding Agreement shall be governed by, and be construed in accordance with, the laws of the State of New York. Section 4.03.Concerning the Owner Trustee. FNBC is entering into this Refunding Agreement solely as Owner Trustee under the Trust Agreement and not in its individual capacity. Anything herein to the contrary notwithstanding, all and each of the agreements and obligations herein made or undertaken on the part of the Owner Trustee are made or undertaken not as personal agreements of FNBC, but are made or undertaken solely for the purpose of binding only the Trust Estate, and nothing contained in this Refunding Agreement shall entitle any person to any claim against FNBC in its individual capacity or any of its assets. IN WITNESS WHEREOF, the parties hereto have caused this Refunding Agreement to be duly executed by their respective officers thereunto duly authorized. ESSL 2, INC. as Owner Participant By Name: Title: W3A FUNDING CORPORATION By Name: Title: FIRST NATIONAL BANK OF COMMERCE, not in its individual capacity but solely as Owner Trustee under the Trust Agreement By Name: Title: BANKERS TRUST COMPANY, not in its individual capacity but solely as Corporate Indenture Trustee and Collateral Trust Trustee By Name: Title: STANLEY BURG, not in his individual capacity but solely as Individual Indenture Trustee LOUISIANA POWER & LIGHT COMPANY, as Lessee By Name: Title: SCHEDULE 1 Recordations and Filings EXHIBIT A Form of PA Amendment No. 1 EXHIBIT B Form of Supplemental Indenture No. 2 EXHIBIT C Form of Lease Supplement No. 1 EXHIBIT D Form of Collateral Trust Indenture EXHIBIT E Form of Collateral Trust Supplement EXHIBIT F Form of TIA Amendment No. 1 EX-5 10 Exhibit 5(a) February 29, 1996 Louisiana Power & Light Company 639 Loyola Avenue New Orleans, Louisiana 70113 Ladies and Gentlemen: We refer to the Registration Statement on Form S-3 to be filed with the Securities and Exchange Commission (the "Commission") on or about the date hereof by Louisiana Power & Light Company (the "Company") for the registration under the Securities Act of 1933, as amended, of $322,526,000 aggregate principal amount of Waterford 3 Secured Lease Obligation Bonds (the "Bonds") to be issued, in one or more series, by W3A Funding Corporation ("Funding Corporation") and for the qualification under the Trust Indenture Act of 1939, as amended, of the Collateral Trust Indenture, as proposed to be supplemented ("Collateral Trust Indenture"), under which the Bonds are to be issued. We are of the opinion that Funding Corporation is a corporation duly organized and validly existing under the laws of the State of Delaware. We are further of the opinion that all action necessary to make valid the proposed issuance and sale by Funding Corporation of the Bonds to the purchasers thereof will have been taken when: (a) the Company's said Registration Statement on Form S-3, as it may be amended, shall have become effective in accordance with the applicable provisions of the Securities Act of 1933, as amended, and a supplement or supplements to the prospectus specifying certain details with respect to the offering or offerings of the Bonds shall have been filed with the Commission, and the Collateral Trust Indenture shall have been qualified under the Trust Indenture Act of 1939, as amended; (b) an appropriate order or orders shall have been issued by the Commission under the Public Utility Holding Company Act of 1935 in respect of the related Application-Declaration on Form U-1 (File No. 70-8771), as amended and as it may be further amended; (c) appropriate action shall have been taken by the Boards of Directors of the Company and of Funding Corporation for the purpose of authorizing the consummation of the issuance and sale of the Bonds; (d) the proposed Collateral Trust Indenture, under which the Bonds are to be issued, shall have been appropriately executed and delivered; and (e) the Bonds shall have been appropriately issued and delivered for the consideration contemplated by, and otherwise in conformity with, the acts, proceedings and documents referred to above. We are further of the opinion that when the foregoing steps have been taken, the Bonds will be legal, valid and binding obligations of Funding Corporation enforceable in accordance with their terms, except as limited by bankruptcy, insolvency, reorganization, moratorium, liquidation or other laws affecting the enforcement of creditors' rights, by fraudulent conveyance and transfer laws and by general equitable principles and the exercise of judicial discretion in applying remedies for the enforcement of the rights and security provided for therein, including the remedy of specific enforcement and otherwise. This opinion does not pass upon the matter of compliance with "blue sky" laws or similar laws relating to the sale or distribution of the Bonds by underwriters. We are members of the New York Bar and do not hold ourselves out as experts on the laws of any other state. As to matters of Delaware law, we have examined or caused to be examined such documents and satisfied ourselves as to such matters as we have deemed necessary in order to render this opinion. As to all matters of Louisiana law, we have relied upon an opinion of even date addressed to you by Monroe & Lemann (A Professional Corporation), of New Orleans, Louisiana. We have not examined into and are not passing upon matters relating to the incorporation of the Company. We hereby consent to the use of this opinion as an exhibit to the Company's said Registration Statement on Form S-3, as it may be amended, and consent to such references to our firm as may be made in such Registration Statement and in the Prospectus constituting a part thereof. Very truly yours, /s/ Reid & Priest LLP REID & PRIEST LLP EX-5 11 Exhibit 5(b) February 29, 1996 Louisiana Power & Light Company 639 Loyola Avenue New Orleans, Louisiana 70113 Ladies and Gentlemen: We refer to the Registration Statement on Form S-3 to be filed with the Securities and Exchange Commission (the "Commission") on or about the date hereof by Louisiana Power & Light Company (the "Company") for the registration under the Securities Act of 1933, as amended, of $322,526,000 aggregate principal amount of Waterford 3 Secured Lease Obligation Bonds ("the Bonds") to be issued, in one or more series, by W3A Funding Corporation ("Funding Corporation") and for the qualification under the Trust Indenture Act of 1939, as amended, of the Collateral Trust Indenture, as proposed to be supplemented ("Collateral Trust Indenture"), under which the Bonds are to be issued. We are of the opinion that the Company is a corporation validly organized, existing and in good standing under the laws of the State of Louisiana. We are further of the opinion that all action necessary to make valid the proposed issuance and sale by Funding Corporation of the Bonds to the purchasers thereof will have been taken when: (a) the Company's said Registration Statement on Form S-3, as it may be amended, shall become effective in accordance with the applicable provisions of the Securities Act of 1933, as amended, and a supplement or supplements to the prospectus specifying certain details with respect to the offering or offerings of the Bonds shall have been filed with the Commission, and the Collateral Trust Indenture shall have been qualified under the Trust Indenture Act of 1939, as amended; (b) an appropriate order or orders shall have been issued by the Commission under the Public Utility Holding Company Act of 1935 in respect of the related Application-Declaration on Form U-1 (File No. 70-8771), asamended and as it may be further amended; (c) appropriate action shall have been taken by the Boards of Directors of the Company and of Funding Corporation for the purpose of authorizing the consummation of the issuance and sale of the Bonds; (d) the proposed Collateral Trust Indenture, under which the Bonds are to be issued, shall have been appropriately executed and delivered; and (e) the Bonds shall have been appropriately issued and delivered for the consideration contemplated by, and otherwise in conformity with, the acts, proceedings and documents referred to above. We are further of the opinion that when the foregoing steps have been taken, the Bonds will be legal, valid and binding obligations of Funding Corporation enforceable in accordance with their terms, except as limited by bankruptcy, insolvency, reorganization, moratorium, liquidation or other laws affecting the enforcement of creditors' rights, by fraudulent conveyance and transfer laws and by general equitable principles and the exercise of judicial discretion in applying remedies for the enforcement of the rights and security provided for therein, including the remedy of specific enforcement and otherwise. This opinion does not pass upon the matter of compliance with "blue sky" laws or similar laws relating to the sale or distribution of the Bonds by underwriters. We are members of the Louisiana Bar and do not hold ourselves out as experts on the laws of any other state. In giving this opinion, we have relied, as to all matters of Delaware and New York law, upon the opinion of even date addressed to you by Reid & Priest LLP. We have not examined into and are not passing upon matters relating to the incorporation of Funding Corporation. We hereby consent to the use of this opinion as an exhibit to the Company's said Registration Statement on Form S-3, as it may be amended, and consent to such references to our firm as may be made in such Registration Statement and in the Prospectus constituting a part thereof. Very truly yours, /s/ Monroe & Lemann Monroe & Lemann EX-12 12
Exhibit 12 Louisiana Power and Light Company Computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined Fixed Charges and Preferred Dividends Twelve Months Ended December 31, September 30, 1990 1991 1992 1993 1994 1995 Fixed charges, as defined: Interest on long-term debt $154,357 $158,816 $128,672 $124,633 $124,820 $124,992 Interest on notes payable 87 -- 150 898 1,948 1,729 Other interest charges 6,378 5,924 5,591 5,706 4,546 5,230 Amortization of expense and premium on debt 3,397 3,282 7,100 5,720 5,130 5,387 - net(cr) Interest applicable to rentals 12,906 11,381 9,363 8,519 8,332 9,088 Total fixed charges, as defined 177,125 179,403 150,876 145,476 144,776 146,426 Preferred dividends, as defined (a) 42,365 41,212 42,026 40,779 29,171 28,777 Combined fixed charges and preferred $219,490 $220,615 $192,902 $186,255 $173,947 $175,203 dividends, as defined Earnings as defined: Net Income $155,049 $166,572 $182,989 $188,808 $213,839 $243,325 Add: Provision for income taxes: Federal and State 62,236 8,684 36,465 70,552 79,260 152,648 Deferred Federal and State - net (9,655) 67,792 51,889 43,017 21,580 (27,948) Investment tax credit adjustment - net 26,646 8,244 (1,317) (2,756) (37,552) (36,721) Fixed charges as above 177,125 179,403 150,876 145,476 144,776 146,426 Total earnings, as defined $411,401 $430,695 $420,902 $445,097 $421,903 $477,730 Ratio of earnings to fixed charges, as 2.32 2.40 2.79 3.06 2.91 3.26 defined Ratio of earnings to combined fixed charges and preferred dividends, as defined 1.87 1.95 2.18 2.39 2.43 2.73 - ------------------------ (a) "Preferred dividends," as defined by SEC regulation S-K, are computed by dividing the preferred dividend requirement by one hundred percent (100%) minus the income tax rate.
EX-25 13 Exhibit 25(a) UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ____________________ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ___________ BANKERS TRUST COMPANY (Exact name of trustee as specified in its charter) NEW YORK 13-4941247 (Jurisdiction of Incorporation or (I.R.S. Employer organization if not a U.S. national bank) Identification no.) FOUR ALBANY STREET NEW YORK, NEW YORK 10006 (Address of principal (Zip Code) executive offices) Bankers Trust Company Legal Department 130 Liberty Street, 31st Floor New York, New York 10006 (212) 250-2201 (Name, address and telephone number of agent for service) Louisiana Power & Light Company (Exact name of obligor as specified in its charter) LOUISIANA 72-0245590 (State or other jurisdiction of (I.R.S. employer Incorporation or organization) Identification no.) 639 Loyola Avenue New Orleans, Louisiana 70113 (Address of principal executive offices) (Zip Code) Waterford 3 Secured Lease Obligation Bonds (Title of the indenture securities) Item 1. General Information. Furnish the following information as to the trustee. (a) Name and address of each examining or supervising authority to which it is subject. Name Address Federal Reserve Bank (2nd District) New York, NY Federal Deposit Insurance Corporation Washington, D.C. New York State Banking Department Albany, NY (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with Obligor. If the obligor is an affiliate of the Trustee, describe each such affiliation. None. Item 3.-15. Not Applicable Item 16. List of Exhibits. Exhibit 1 - Restated Organization Certificate of Bankers Trust Company dated August 7, 1990 and Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated March 28, 1994 - Incorporated herein by reference to Exhibit 1 filed with Form T-1 Statement, Registration No. 33- 79862. Exhibit 2 - Certificate of Authority to commence business - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33- 21047. Exhibit 3 - Authorization of the Trustee to exercise corporate trust powers - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. Exhibit 4 - Existing By-Laws of Bankers Trust Company, dated as amended on September 21, 1993. - Incorporated herein by reference to Exhibit 4 filed with Form T-1 Statement, Registration No. 33-52359. Exhibit 5 - Not applicable. Exhibit 6 - Consent of Bankers Trust Company required by Section 321(b) of the Act. - Incorporated herein by reference to Exhibit 4 filed with Form T-1 Statement, Registration No. 22-18864. Exhibit 7 - A copy of the latest report of condition of Bankers Trust Company dated as of September 30, 1995. Exhibit 8 - Not Applicable. Exhibit 9 - Not Applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bankers Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 8th day of February, 1996. BANKERS TRUST COMPANY By:_______________________________ Scott Thiel Assistant Vice President SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bankers Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 8th day of February, 1996. BANKERS TRUST COMPANY By: Scott Thiel Scott Thiel Assistant Vice President Legal Title of Bank: Bankers Trust Company Call Date: 9/30/95 ST-BK: 36-4840 FFIEC 031 Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1 City, State ZIP: New York, NY 10006 11 FDIC Certificate No.: 0 0 6 2 3 Consolidated Report of Condition for Insured Commercial and State-Chartered Savings Banks September 30, 1995 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, reported the amount outstanding as of the last business day of the quarter. Schedule RC--Balance Sheet Dollar Amounts in Thousands RCFD Bil Mil Thou ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): a. Noninterest-bearing balances and currency and coin(1) 0081 1,690,000 1.a. b. Interest-bearing balances(2) 0071 1,531,000 1.b. 2. Securities: a. Held-to-maturity securities (from Schedule RC-B, column A) 1754 0 2.a. b. Available-for-sale securities (from Schedule RC-B, column D) 1773 4,104,000 2.b. 3. Federal funds sold and securities purchased under agreements to resell in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: a. Federal funds sold 0276 3,475,000 3.a. b. Securities purchased under agreements to resell 0277 792,000 3.b. 4. Loans and lease financing receivables: a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 21,152,000 4.a. b. LESS: Allowance for loan and lease losses RCFD 3123 981,000 4.b. c. LESS: Allocated transfer risk reserve RCFD 3128 0 4.c. d. Loans and leases, net of unearned income, allowance, and reserve (item 4.a minus 4.b and 4.c) 2125 20,171,000 4.d. 5. Trading assets (from Schedule RC-D) 3545 37,469,000 5. 6. Premises and fixed assets (including capitalized leases) 2145 839,000 6. 7. Other real estate owned (from Schedule RC-M) 2150 257,000 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) 2130 243,000 8. 9. Customers' liability to this bank on acceptances outstanding 2155 461,000 9. 10. Intangible assets (from Schedule RC-M) 2143 10,000 10. 11. Other assets (from Schedule RC-F) 2160 10,351,000 11. 12. Total assets (sum of items 1 through 11) 2170 81,393,000 12. __________________________ (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held in trading accounts. Legal Title of Bank: Bankers Trust Company Call Date: 9/30/95 ST-BK: 36-4840 FFIEC 031 Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2 City, State Zip: New York, NY 10006 12 FDIC Certificate No.: 0 0 6 2 3 Schedule RC--Continued Dollar Amounts in Thousands Bil Mil Thou LIABILITIES 13. Deposits: a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) RCON 2200 7,445,000 13.a. (1) Noninterest-bearing (1) RCON 6631 3,025,000 13.a.(1) (2) Interest-bearing RCON 6636 4,420,000 13.a.(2) b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E part II) RCFN 2200 20,135,000 13.b. (1) Noninterest-bearing RCFN 6631 533,000 13.b.(1) (2) Interest-bearing RCFN 6636 19,602,000 13.b.(2) 14. Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: a. Federal funds purchased RCFD 0278 4,021,000 14.a. b. Securities sold under agreements to repurchase RCFD 0279 1,472,000 14.b. 15. a. Demand notes issued to the U.S. Treasury RCON 2840 0 15.a. b. Trading liabilities RCFD 3548 20,282,000 15.b. 16. Other borrowed money: a. With original maturity of one year or less RCFD 2332 10,242,000 16.a. b. With original maturity of more than one year RCFD 2333 3,196,000 16.b. 17. Mortgage indebtedness and obligations under capitalized leases RCFD 2910 35,000 17. 18. Bank's liability on acceptances executed and outstanding RCFD 2920 461,000 18. 19. Subordinated notes and debentures RCFD 3200 1,226,000 19. 20. Other liabilities (from Schedule RC-G) RCFD 2930 8,663,000 20. 21. Total liabilities (sum of items 13 through 20) RCFD 2948 77,178,000 21. 22. Limited-life preferred stock and related surplus RCFD 3282 0 22. EQUITY CAPITAL 23. Perpetual preferred stock and related surplusRCFD 3838 400,000 23. 24. Common stock RCFD 3230 852,000 24. 25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 528,000 25. 26. a. Undivided profits and capital reserves RCFD 3632 2,794,000 26.a. b. Net unrealized holding gains (losses) on available-for-sale securities RCFD 8434 6,000 26.b. 27. Cumulative foreign currency translation adjustments RCFD 3284 (365,000)27. 28. Total equity capital (sum of items 23 through 27) RCFD 3210 4,215,000 28. 29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, and 28) RCFD 3300 81,393,000 29. Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank by independent external Number auditors as of any date during 1994 RCFD 6724 N/A M.1 1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank 2 = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately) 3 = Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 4 = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority) 5 = Review of the bank's financial statements by external auditors 6 = Compilation of the bank's financial statements by external auditors 7 = Other audit procedures (excluding tax preparation work) 8 = No external audit work ______________________ (1) Including total demand deposits and noninterest-bearing time and savings deposits. -----END PRIVACY-ENHANCED MESSAGE-----